Agencies under Federal Jurisdiction Learning to Escape "Catch and Collect" Methods
In the financial year 2022 alone, federal agencies reported a staggering $247 billion in improper and unknown payments, highlighting the need for improved controls in federal grant programmes.
To combat this issue, grantors are being advised to leverage automated controls in critical processes such as determining applicant eligibility, validating entity and account information, and performing checks on publicly available databases. These controls can help detect errors in financial information, compare reported Adjusted Gross Incomes against other income documentation, and prevent fraudulent activities.
The National Institute of Standards and Technology (NIST) and the SP 800-53, "Security and Privacy Controls for Information Systems and Organizations," provide digital identity control guidance for government information systems that grantors should reference when developing these automated controls.
Standard Operating Procedures (SOPs) are being developed to include best practices from prior programmes, including validation against the Do Not Pay system for eligibility checks. These SOPs are intended to enable federal financial assistance staff to independently complete evaluation and compliance actions before awarding new funding.
The occurrence of "Pay and Chase" can be traced back to various factors, including structural, economic, and regulatory issues that create incentives for repetitive payment demands followed by subsequent pursuits for repayment. Analyzing financial behavior patterns, regulatory frameworks, and systemic inefficiencies that enable such practices is crucial in identifying these causes.
New rules, waivers, and requirements during the grant life cycle can revise previous eligibility and allowability standards, exacerbating Pay and Chase. Grantors are encouraged to evaluate their methods in conjunction with the U.S. Government Accountability Office Report "A Framework for Managing Improper Payments in Emergency Assistance Programs."
Training for federal financial assistance staff should focus on topics like emerging guidance, new grant requirements, corrective action plans, and the use of current agency technologies. This training will equip staff with the knowledge and tools necessary to review and verify eligibility prior to funding an award, reducing the likelihood of Pay and Chase scenarios.
The consequences of Pay and Chase are far-reaching, including awarded funds being used outside of the intended purpose, concerns about program integrity, increased administrative burden, and bad publicity. To mitigate these issues, a Standardized Risk and Control Matrix (RCM) can be established, which includes a set of standardized risk factors and internal controls.
Our website offers deep expertise in various sectors, a proven track record with federal awarding agencies, and a unique combination of technology, analytics, industry, risk, and compliance experience. Our team of grants experts can help address these challenges by implementing leading practices and technologies, increasing process automation, understanding governmentwide requirements, developing and executing assessments to manage risk, and providing analytics to measure program impact.
In the wake of the COVID-19 pandemic, the federal government provided approximately $4.6 trillion to respond to and recover from the crisis. With such a significant amount of funds distributed, it is crucial that measures are put in place to prevent Pay and Chase scenarios and ensure the integrity of federal grant programmes.
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