Keeping Stimulus Funds Under Control

By Charles K. Trainor

The federal stimulus plan is expected to resuscitate our economy, but such a large, hastily developed, and complex program is inherently vulnerable to fraud, waste, and abuse. The Federal Special Inspector General, who oversees the financial bailout program, reports that 20 criminal probes already have been opened. Authorities expect that, as stimulus programs roll out, the risk of fraud will increase. It is likely that similar risks will accompany the federal spending plan targeting education.

Fortunately, district administrators can establish internal controls to ensure that compliance, cost controls, and loss prevention are monitored. While the design and maintenance of such systems is the responsibility of administration, board members are charged with verifying that internal controls are functioning.

As stewards of public monies, boards must consider the possibility, however unlikely, of administrative override of internal controls. When an administrator bypasses or overrides controls, the district is exposed to risk.

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