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Home :  Federal Budget & Tax : 
Federal Budget & Tax:      News     Blog     Background    



Thursday, November 30, 2006

Contractors, FEMA Still Bungling Hurricane Relief

Louisiana officials are fed up with a company contracted to administer a fund for rebuilding hurricane-damaged homes. The fund, called the Road Home Project, has $8 billion in it. But as of Wednesday last week, only 39 applicants had received anything from it- 8 weeks after the fund got up and running. Governor Blanco has given ICF -the contractor in charge of managing the fund- until the end of month to issue payments to at least 10,000 applicants.

Despite the slow pace, ICF can earn a maximum of $756 million on the project. Given the nearly 80,000 applicants, ICF could make around $9,000 on each grant!

The old adage "You get what you pay for" doesn't seem to apply here.

In other news, a federal judge ruled that FEMA wrongfully denied housing aid to tens of thousands of Hurricane Katrina victims. The judget ordered that FEMA resume payments immediately, but how soon FEMA will comply is anybody's guess.

New Orleans City Business: ICF Seeks Road Home Fast Lane

The Washington Post: FEMA Told to Resume Storm Aid

Posted by Matt Lewis, 10:27:55 AM



Thursday, November 09, 2006

Something Stinks at the IRS

We have previously reported (see here, here, and here) on the IRS's bizarre plans to outsource some of its tax collection responsibilities to private companies. The plan has received strong opposition from many in Congress and ended up costing taxpayers money the last time the IRS tried it. But they are pushing forward, nonetheless, and even talking about expanding the program before it has even been tried.

Now the Government Accountability Office has weighed in on the program and they seem to think something doesn't smell quite right:

IRS has not documented criteria that it will use to determine whether the limited implementation performance warrants program expansion. IRS officials indicated that they are considering criteria that could trigger a go/no go decision, such as the amount of taxes collected and indications of PCAs [private collection agencies] abusing taxpayers or misusing taxpayer data. IRS has not decided on whether these targets will include comparing the taxes collected to program costs, which was a key reason for canceling a 1996 PCA pilot program.

GAO goes on to say that the IRS is planning a comparative study to determine whether the private collection agencies are doing a better job than the IRS could do if it invested its resources in collecting the taxes itself. But get this - under the design of the study, the IRS will exclude the fees paid to the private agencies (up to a quarter of the revenue collected) in their analysis comparing the two different approaches. Because of this strange exclusion, GAO concludes:

[The study] will not compare the results of using PCAs with the results IRS could get if given the same amount of resources, including the fees to be paid to PCAs, to use in what IRS officials would judge to be the best way to meet tax collection goals. Adequately designing and implementing the study is important to ensure policymakers are aware of the true costs of contracting with PCAs and know whether PCAs offer the best use of federal funds.

So not only has IRS rushed forward with plans to implement this program despite heavy criticism, it has also skimpted on designing the process to guage the program's success, and then in order to stack the deck, decided to exclude the actual costs from its lone study - thereby rendering the evaluation essentially useless? This definitely smells fishy.



Posted by Adam Hughes, 02:44:42 PM



Friday, November 03, 2006

Spending Investigators Speak After Dismissal

You may recall that the House Appropriations Committee decided that the sixty-year-old team in charge of conducting oversight of government spending was no longer "good." CQ reports today that some of those fired investigators are now defending themselves from Committee spokesperson John Scofield’s charge that "the work [they’ve] been getting as of late has not been that good."

CQ ($):

The investigators said they identified billions of dollars in potential savings every year, particularly in the Defense budget, and that they heard no complaints until Chairman Jerry Lewis, R-Calif., dismissed 60 contractors on Oct. 16.

Joseph Stehr, a retired FBI agent who had been a member of the team off and on since 1985, said he remains stunned by Lewis’ action. "It just amazes me that after 60 some years, that just with the swipe of a pencil the thing could all go away," he said.



Posted by Craig Jennings, 04:52:55 PM



Thursday, November 02, 2006

GAO to Investigate Interior's Royalty Program

Some good news: The Government Accountability Office (GAO) will be investigating the Interior Department's decision to drop claims that Chevron has been cooking the books, as well as the entire program for oil royalty collection. And let's give credit where it's due, as the Republican leader of the House Government Reform Committee, Darrel Issa (R-CA), ordered the investigation.

As a former student of Latin American history, it doesn't surprise me much that an oil company would try to defraud a government. Heck, they've been doing it in Latin America (and all over the world) for ages. But for U.S. companies to do it in the U.S.? It doesn't make it any more wrong to do it here, but come on! Show a little loyalty!



Posted by Matt Lewis, 11:43:36 AM




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