Picture this: It's 2020, and the world is reeling from the impact of a global pandemic. Governments scramble to provide financial lifelines to businesses and individuals. The Paycheck Protection Program and Economic Injury Disaster Loans are rolled out at breakneck speed, pumping trillions of dollars into the economy. But in the rush to provide aid, something crucial is overlooked: Robust compliance and monitoring (C&M) practices.
Looking at the present day, we're witnessing the complex aftermath. While many businesses received critical support, reports of misuse have surfaced, and some organizations that received aid are navigating repayment processes. This situation has ignited important discussions about public policy, financial oversight, and economic resilience, serving as a valuable lesson for future crisis response efforts.
In today's intricate regulatory landscape, C&M isn't just about avoiding pitfalls; it's about proactively unlocking risk management and charting a course to operational excellence. Think of C&M as your organization's navigation system, offering real-time insights and opportunities for course corrections, rather than a rearview mirror showing you where you've been (i.e., retroactive audits).
C&M creates a culture of continuous improvement, accountability, budget surety, and financial resilience. Without it, what’s at stake? Public trust, resource resiliency, and a significant reduction in fiscal risk.
The COVID-19 pandemic triggered an unprecedented flood of federal aid, with trillions of dollars allocated to support communities across the United States. While this influx was a lifeline for many, the rapid rate of disbursement overwhelmed normal compliance procedures. The consequences were significant: Widespread fraud, misallocation of resources, federal clawbacks of spent dollars, and improper payments.
In fact, the Government Accountability Office (GAO) reported that in 2022 alone, 18 government agencies acknowledged improper payment estimates totaling a staggering $247 billion.
The GAO identified four key factors that left federal programs vulnerable to these issues when administering COVID-19 relief programs:
C&M offers a different path, helping programs:
If you answered yes to any of the above prompts, your organization would greatly benefit from C&M.
C&M directly supports your organization's primary mission: reducing risk for you and your stakeholders. By implementing effective C&M practices, you're not just fulfilling a regulatory requirement; you're actively protecting your organization's interests and ensuring the safety and security of all involved parties.
We’ve touched on the financial consequences of poor C&M practices, but most critically, poor C&M can stunt the intended impact of federal funds in your communities. These funds have been allocated to promote healthier, more prosperous communities. Without C&M, agencies may compromise their ability to disperse and utilize federal money correctly and efficiently.
Real-world application: We have partnered with multiple organizations to prevent this and help strategically implement C&M. In two Florida-based projects, for instance, our teams evaluated and improved the C&M processes for state agencies that each received over $1 billion in federal funds. In both cases, time was of the essence: Findings, recommendations, and necessary changes had to be gathered and deployed rapidly to ensure that funds were not only being used correctly, but that they were dispersed quickly. In both projects, the implementation of robust C&M practices resulted in meaningful gains for communities while positioning the state agencies for future federal funding opportunities.
Successful C&M activities result in a transformed state of operational excellence, enhanced public trust, and maximized program impact in service of the public good. Having strong and successful C&M activities in place will enable and empower your agency to make informed decisions, mitigate risks, and optimize the use of resources, ultimately leading to more effective and efficient public service delivery.
But how do you get there?
The answer lies in industry-acknowledged best practices. When implemented alongside C&M experts, these practices create a robust framework designed to ensure every dollar is utilized in accordance with federal regulations by:
Now that you’ve reviewed this list of best practices, ask yourself, “How many of these have I implemented in my program?”
Remember, C&M is more than a regulatory checkbox; it’s a powerful catalyst for organizational transformation. When implemented strategically, C&M fosters a culture of accountability and ethical behavior that permeates every level of your organization.
Imagine an environment where:
This is the transformative power of a well-executed C&M program. It's about creating a proactive approach that not only ensures compliance but also drives your organization toward excellence.
Whether you're new to C&M or looking to enhance your existing practices, embracing the principles discussed in this blog will empower you to contribute more effectively to your organization’s integrity and success. It's time to view C&M not as a burden, but as a strategic asset that can propel your organization to new heights of performance and public trust.
At North Highland, our team of C&M experts stands ready to support your compliance journey with tailored strategies and a collaborative approach designed to meet your specific needs. The journey to reduced risk, effective fund management, and a future-ready organization starts here.