	Background

The American Recovery and Reinvestment Act of 2009 (Recovery Act)  created the Recovery Board composed of Inspectors General to promote  accountability by overseeing recovery-related funds. Subsequent legislation expanded the Recovery Board’s mandate to  include oversight of other federal spending, including those funds  appropriated for purposes related to the effects of Hurricane Sandy. The ROC Has Provided Valuable Analytic Capabilities to the Oversight Community

As we reported in our July 2015 testimony describing the progress made  in the initial implementation of the DATA Act, the ROC has provided  significant analytical services to its clients, including many OIGs, in  support of their antifraud and other activities. Specifically, on the basis of  the ROC’s client-service performance data that we reviewed, as part of  the ROC’s analysis supporting investigations and audits, the ROC  researched roughly 1.7 million entities associated with $36.4 billion in  federal funds during fiscal years 2013 and 2014 at the request of various  OIGs and other entities. 3). The ROC developed specialized data-analytic capabilities to better  ensure federal spending accountability. In another example, the Environmental Protection Agency OIG used the  ROC’s data visualizations of a link analysis that identifies relationships  among entities involved in activities such as collaborating to commit  fraud. Treasury Decided Not to Transfer the ROC’s Assets but Has an Opportunity to Transfer Additional Information That Could Benefit the Do Not Pay Center Business Center

		Treasury Decided Not to Transfer the ROC’s Assets, Citing Cost, Lack of Investigative Authority, and Other Reasons

In May 2015, Treasury officials told us that the department did not plan to  exercise its discretionary authority to establish a data-analysis center or  expand an existing service under the DATA Act. Such processes can  be time-consuming and lengthy. Treasury officials said they considered DNP as a possible host of the  ROC’s assets but ultimately concluded that the transfer of ROC assets to  Treasury would not be cost-effective or add value to Treasury’s efforts. The development of data-sharing agreements is  difficult and time-consuming. However, because Treasury  currently does not plan to transfer the assets of the ROC, the center’s  users will need to consider alternatives when the Recovery Board closes. Some large OIGs that previously used the ROC told us that they intend to  develop their own analytic capabilities. While OIGs with the financial resources to do so may pursue replication  of the ROC’s tools, the ROC’s termination may have more effect on the  audit and investigative capabilities of some small- and medium-sized  OIGs that do not have the resources to develop independent data  analytics or pay fees for a similar service, according to some OIG  officials. Through the DATA Act, Congress provided Treasury the option to transfer  the ROC’s assets. A legislative proposal that explicitly articulates the relative costs and  benefits of developing an analytics center with a mission and capabilities  similar to the ROC could help Congress decide whether to authorize and  fund such an entity. CIGIE officials stated that they have not developed such a proposal  absent specific direction from Congress, but these officials expressed  concerns about the effect of the September 30, 2015, sunset of the  Recovery Board on the OIG community and, as noted above, have  sought options within their current budget to increase analytic resources  available to OIGs. Conclusions

Agencies seeking to address improper payments and fraud, waste, and  abuse face challenging prospects, especially in an environment in which  estimated improper payments rose by $19 billion to $124.7 billion in fiscal  year 2014. Although  cost and other challenges may limit the viability of transferring certain of  the ROC’s assets to Treasury, other assets—especially information and  documentation that could serve as templates for data sharing or  developing the technical specifications for procuring additional software— may assist DNP as it expands its services and capabilities to address  improper payments. Matter for Congressional Consideration

To help preserve a proven resource supporting the oversight community’s  analytic capabilities, Congress may wish to consider directing CIGIE to  develop a legislative proposal to reconstitute the essential capabilities of  the ROC to help ensure federal spending accountability. We are sending copies of this report to relevant congressional  committees, the Secretary of the Treasury, the Chair of the Council of the  Inspectors General on Integrity and Efficiency (CIGIE), and the Chair of  the Recovery Accountability and Transparency Board (Recovery Board). We also  reviewed documentation from the Recovery Board on the ROC’s  resources, including hardware, software contracts, data sets, and human  capital, as well as information on its staffing levels over time, to develop a  complete picture of the capabilities that Treasury could obtain through a  transition.
Why GAO Did This Study

Improper payments government-wide increased approximately $19 billion in fiscal year 2014, resulting in an estimated total of $124.7 billion. The DATA Act authorized Treasury to establish a data-analysis center or expand an existing service.
Congress included a provision in the DATA Act for GAO to review the implementation of the statute. This report addresses (1) the value of the ROC's capabilities provided to the oversight community; (2) Treasury's plans for transferring assets from the ROC, and (3) the potential effect, if any, of Treasury's plans on the ROC's users.
GAO reviewed documentation on the ROC's assets, a transition plan developed by the ROC, and its performance data from fiscal year 2012 through March 2015. On the basis of factors such as frequency of requests for assistance and agency size, GAO interviewed various ROC users about their views. GAO also interviewed Treasury and CIGIE officials to obtain their perspectives on the ROC's capabilities and its future status.

What GAO Found

The Recovery Accountability and Transparency Board's (Recovery Board) Recovery Operations Center (ROC) provided significant analytical services primarily to Offices of the Inspector General (OIG) to support antifraud and other activities. Congress initially established the Recovery Board to oversee funds appropriated by the American Recovery and Reinvestment Act of 2009. Subsequently, it expanded the Recovery Board's mandate to include oversight of other federal spending, and most recently through the Digital Accountability and Transparency Act of 2014 (DATA Act) authorized the Department of the Treasury (Treasury) to transfer ROC assets to Treasury by September 30, 2015, when the Recovery Board closes. On the basis of the ROC's client-service performance data that GAO reviewed, the center researched roughly 1.7 million entities associated with $36.4 billion in federal funds in fiscal years 2012 and 2013. The ROC developed specialized data-analytic capabilities that, among other things,
helped OIGs identify high-risk entities and target audit and investigative resources to those entities;
identified organizations with previous fraudulent activities that nevertheless received contracts during Hurricane Sandy; and
identified entities involved in activities such as collaborating to commit fraud, and visually depicted relationships among these entities for juries.
Treasury does not plan to transfer the ROC's assets, such as hardware and software, citing cost, lack of investigative authority, and other reasons. However, Treasury could transfer additional information to its Do Not Pay Center Business Center (DNP), which assists agencies in preventing improper payments. For instance, transferring documentation of data-sharing agreements, which can be difficult and time-consuming to establish, could serve as a template for DNP efforts to expand the number of data sets it uses to identify improper payments. Although cost and other challenges may limit the viability of transferring certain of the ROC's assets to Treasury, other assets—especially those that could serve as templates for negotiating access to and procuring additional data—may assist DNP as it expands its services and capabilities.
Because Treasury does not plan to transfer the ROC's assets, the ROC's users will need to consider alternatives when the Recovery Board closes. Specifically, officials from some large OIGs that have used the ROC told GAO they intend to develop their own analytical capabilities. However, officials from some small- and medium-sized OIGs said they do not have the resources to develop independent data analytics or pay for a similar service, thus foregoing the ROC's capabilities. The Council of the Inspectors General for Integrity and Efficiency (CIGIE) could reconstitute some of the ROC's analytic capabilities and has explored options to do so. However, CIGIE officials stated that CIGIE does not currently have the resources to accomplish this reconstitution. A legislative proposal that articulates for Congress the relative costs and benefits of developing an entity with a mission and capabilities similar to the ROC could be an appropriate first step in preserving the essence of the center's proven value to its users. CIGIE officials stated that they have not developed such a proposal absent congressional direction, but noted that they support Congress's expressed interest in preserving and expanding analytic resources for the oversight community.

What GAO Recommends

If Congress wants to maintain the ROC's analytic capabilities, it should consider directing CIGIE to develop a proposal to that effect to help ensure federal spending accountability. GAO also recommends that Treasury consider transferring additional information to enhance Treasury's DNP. Treasury concurred with GAO's recommendation, and CIGIE is supportive of assuming additional analytical functions for the OIG community with additional funding.