Federal investigators have received more than 730 allegations of waste or fraud in stimulus act funding so far, have canceled the contracts of some bad actors and have sent a couple of dozen cases to the FBI, the Internal Revenue Service and prosecutors.
As the pace of spending peaks, continuing to police the $862 billion will take a huge portion of investigators’ resources over the next year – as much as 60 percent of some inspector generals’ budgets, according to a report released Tuesday by Sen. Mark Pryor, Arkansas Democrat, who has taken a keen interest in weeding out fraud from stimulus spending.
One auditor warned that reports of fraud are expected to increase as the money continues to flow.
“HUD reports that they have obligated 98 percent of [stimulus] funds. However, the majority of these funds have not yet been received by grantees,” Kenneth M. Donohue, inspector general at the Department of Housing and Urban Development, said in a letter to Mr. Pryor. “While it is early in the process, we anticipate seeing trends of waste, fraud and abuse once the grants are received, especially in light of the results of our capacity reviews.”
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