oversight

The Department's Process to Ensure Data Quality Under the Reporting Requirements of the American Recovery and Reinvestment Act of 2009

Published by the Department of Education, Office of Inspector General on 2009-10-29.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

           U.S. Department of Education
            Office of Inspector General

    American Recovery and
    Reinvestment Act of 2009
   The Department’s Process to Ensure Data Quality Under the
Reporting Requirements of the American Recovery and Reinvestment
                            Act of 2009

                      Final Audit Report




ED-OIG/A19J0004                            October 2009
                                         UNITED STATES DEPARTMENT OF EDUCATION
                                              OFFICE OF INSPECTOR GENERAL

                                                                                                THE INSPECTOR GENERAL



                                                         October 29, 2009


Tony Miller
Deputy Secretary
U.S. Department of Education
400 Maryland Avenue, S.W.
Washington, DC 20202

Dear Mr. Miller:

This final audit report presents the results of our audit to determine whether the Department of
Education had established a process to perform limited data quality reviews of recipient
reporting under the American Recovery and Reinvestment Act of 2009 to identify material
omissions and/or significant reporting errors, and notify the recipients of the need to make
appropriate and timely changes. We received your comments on the contents of our draft report.
The comments are summarized within the Results section of this report.

In accordance with the Freedom of Information Act (5 U.S.C. § 552), reports issued by the
Office of Inspector General are available to members of the press and general public to the
extent information contained therein is not subject to exemptions in the Act.

We appreciate the cooperation given to us during this review. If you have any questions, please
call Michele Weaver-Dugan at (202) 245-6941.

                                                                           Sincerely,


                                                                           Mary Mitchelson /s/
                                                                           Acting Inspector General




 The Department of Education's mission is to promote student achievement and preparation for global competitiveness by fostering educational
                                                   excellence and ensuring equal access.
Final Audit Report                                                                                          Page 3 of 5
ED-OIG/A19J0004


    The Department’s Process to Ensure Data Quality Under the Reporting Requirements of
                   the American Recovery and Reinvestment Act of 2009

                                     Control Number ED-OIG/A19J0004

                                                     PURPOSE

The American Recovery and Reinvestment Act of 2009 (ARRA) places a heavy emphasis on
accountability and transparency, including reporting requirements related to the awarding and
use of funds. Challenges associated with the new reporting requirements include developing the
systems and infrastructure for collecting and reporting the required information, educating
recipients about the reporting requirements, assessing the quality of the reported information, and
using the collected information effectively to monitor and oversee ARRA programs and
performance.

This final report presents the results of our audit to determine whether the Department of
Education (Department) had established a process to perform limited data quality reviews of
recipient reporting under ARRA to identify material omissions and/or significant reporting
errors, and notify the recipients of the need to make appropriate and timely changes.

                                                     RESULTS

Our audit found that the Department had established a process to perform limited data quality
reviews intended to identify material omissions and/or significant reporting errors and notify the
recipients of the need to make appropriate and timely changes. Specifically, the Department:

     Developed draft policy and procedures for reviewing quarterly ARRA data pursuant to
      Office of Management and Budget (OMB) Memorandum M-09-21, Implementing Guidance
      for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of
      2009, dated June 22, 2009, which emphasize the avoidance of material omissions and
      significant reporting errors1. The Department’s draft policy described procedures for
      conducting data quality reviews of information submitted by recipients of ARRA funding.
      These procedures included automated data checks to validate selected recipient reported data
      elements against data in the Department’s financial systems. The procedures also included
      manual reviews of the recipient reported data against specific grant programs or contract
      criteria to identify outliers in certain data elements. In addition, the Department published
      clarifying guidance that elaborates on OMB Memorandum M-09-21 guidance and prepared
      tip sheets for each ARRA grant program to assist recipients in completing the quarterly

1
  OMB M-09-21 defines material omissions as instances where required data are not reported, or reported
information is not otherwise responsive to the data requests resulting in significant risk that the public is not fully
informed as to the status of a Recovery Act project or activity. It further defines significant reporting errors as those
instances where required data are not reported accurately and such erroneous reporting results in significant risk that
the public will be misled or confused by the recipient report in question.
Final Audit Report                                                                       Page 4 of 5
ED-OIG/A19J0004

    report accurately. The clarifying guidance and tip sheets provided instructions to recipients
    on where to obtain source data and how to input the data into the reporting system.

   Developed plans to ensure that all prime recipients have filed the required quarterly reports
    pursuant to Section 1512 of ARRA and that the Department conducts the required review of
    the reported data. The Department developed processes to identify recipients that had not
    registered, as required, in the Central Contractor Registration database and/or the
    FederalReporting.gov system. Department officials stated that program offices used this
    information to provide outreach to recipients to ensure they registered prior to the end of the
    quarter. Once the recipients submit their quarterly reporting information, the Department
    plans to run automated data checks to identify recipients that received ARRA funds but did
    not report the required data.

   Planned a process to remediate systemic or chronic reporting problems. The Department
    anticipates program offices will contact recipients that either do not respond to the first
    reporting quarter or whose data includes material omissions or significant errors. The
    Department plans that this contact will include technical assistance to help ARRA recipients
    identify and correct conditions that contributed to data quality problems. The Department
    also plans to review the quarterly data at a state level, in addition to reviewing each
    individual report, to determine whether there is a systemic problem with the recipient.
    Finally after the quarterly reporting cycle is complete, the Department plans to maintain
    contact with recipients to follow-up on any outstanding corrections, communicate lessons
    learned from the prior reporting periods, and reinforce the importance of data quality.

   Plans to use the reported information as a management tool. The Department’s Risk
    Management Service (RMS) Management Improvement Team (MIT) anticipates reviewing
    an analysis report, which will summarize the expenditures, infrastructure investments, and
    job creation/retention reported by the state agencies. The RMS MIT members plan to
    identify questionable expenditure patterns, job estimates, and other information that appear
    incorrect in the context of the states’ grant awards from the Department and its overall
    economic condition. This information will be referred to the Department’s program staff for
    further investigation.

The Office of the Deputy Secretary provided a response to the draft audit report emphasizing that
it plans to continue efforts to ensure data quality under ARRA.

                                        BACKGROUND

Section 1512 of ARRA requires recipients of ARRA funding to submit a report to the Federal
agency providing those funds no later than 10 days after the end of each calendar quarter
(beginning the quarter ending September 30, 2009). The report must include the total amount of
recovery funds received; the amount of recovery funds expended or obligated to projects and
activities; a list of those projects and activities funded by name including a description,
completion status, estimates of jobs created and retained; and detailed information on any
subcontracts or subgrants awarded by the recipient. The Federal agency must make the reports
publicly available no later than 30 days after the end of that quarter.
Final Audit Report                                                                     Page 5 of 5
ED-OIG/A19J0004


OMB issued Memorandum M-09-21 to provide governmentwide guidance for carrying out the
reporting requirements included in Section 1512 of ARRA. The guidance states Federal
agencies should develop internal policies and procedures for reviewing reported data and perform
limited data quality reviews intended to identify material omissions and/or significant reporting
errors and notify the recipients of the need to make appropriate and timely changes. The
guidance states Federal agencies should establish internal controls to ensure data quality,
completeness, accuracy, and timely reporting of all amounts funded by ARRA.

The Recovery Accountability and Transparency Board (Board) was established to coordinate and
conduct oversight of covered funds to prevent fraud, waste, and abuse. The Board requested that
the Office of the Inspector General (OIG) community conduct audits to ensure that Federal
agencies have a documented process for reviewing data quality and identifying whether there are
any material omissions or significant reporting errors. The Department of Education OIG
reviewed the Department’s plans for reviewing recipient ARRA reporting for the quarter ending
September 30, 2009.

                               SCOPE AND METHODOLOGY

Our review consisted of a determination of whether the Department had established a process to
perform limited data quality reviews intended to identify material omissions and/or significant
reporting errors, and notify recipients of the need to make appropriate and timely changes.
Accordingly, we reviewed applicable Federal laws and regulations and Department guidance
made available to ARRA funding recipients. We conducted interviews with appropriate
Department officials to obtain an understanding of the planned data quality review and recipient
notification processes. We also obtained and reviewed additional information, to include
Department draft internal policies and documentation relating to planned data checks, to gain a
further understanding of planned processes and controls. We did not rely on computer-processed
data to conduct this audit.

The scope of the audit was limited to the Department’s process for monitoring recipient reporting
of recovery funds for the quarter ending September 30, 2009. The fieldwork for the audit was
conducted at Department offices in Washington, D.C., during the period September 2009
through October 2009. We provided our audit results to Department officials via conference call
on October 15, 2009.

Our audit was performed in accordance with generally accepted government auditing standards
appropriate to the scope of the review with the following limitations. The standards require that
we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives. The audit’s objective,
scope, and procedures were provided by the Board in its Data Quality Review Guide. As such,
the Department of Education OIG did not perform work to plan the audit or assess audit risk.
However, we believe that the evidence obtained provides a reasonable basis for our findings and
conclusions based on the audit objectives.
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           The Department of Education’s mission is to promote
     student achievement and preparation for global competitiveness
      by fostering educational excellence and ensuring equal access.

                                    www.ed.gov
                                                                   Attachment

                      Acronyms/Abbreviations Used in this Report


ARRA         American Recovery and Reinvestment Act of 2009

Board        Recovery Accountability and Transparency Board

Department   U.S. Department of Education

MIT          Management Improvement Team

OIG          Office of Inspector General

OMB          Office of Management and Budget

RMS          Risk Management Service