Grants Blog

Archive for November, 2009

President Obama’s most recent Executive Order aimed at reducing improper payments by federal agencies includes an interesting item. Not only does it direct OMB to examine the effectiveness of single audits in detecting and preventing improper payments, but it also asks for recommendations on how to “streamline or eliminate single audit requirements where their value is minimal.”

Most of the Executive Order is aimed at identifying which federal programs are most vulnerable to improper payments, setting targets and action plans for reducing those erroneous assistance awards, and establishing individual accountability responsibilities for federal agencies.

But in Section 4 of the order, Obama tells OMB to work with state and local governments to reduce improper payments. The agency is to establish two working groups that include representatives from state, local, and federal government entities. One will make recommendations for administrative actions designed to improve the incentives and accountability of state and local governments for reducing improper payments. The other group will focus on single audits.

Both working groups are to be established within one month and must submit their recommendations within six months.

Many of you may have been following the ACORN story with interest, but now I’m wondering if the actions of the beleaguered nonprofit might have a potentially broader impact on federal grants.

ACORN is a nonprofit social justice organization that conducts voter registration campaigns, offers free tax return preparation for low-income individuals, provides low-income housing counseling and similar community development projects. In recent months, however, the group and its affiliates have come under fire after hidden cameras allegedly captured ACORN employees giving advice on how to operate a prostitution ring, avoid federal taxes, and engage in other illegal activities.

As a result, among other things Congress stopped ACORN funding, and in turn, ACORN is suing the federal government. It is claiming that Congress is unconstitutionally convicting the organization of a crime without a trial.

So I asked one of our instructors, Ed Levin, a lawyer who teaches  many of our grants law classes, what he thought about the case and its impact. Here’s what he said:

“According to news accounts, the ACORN suit named as defendants a number of federal agencies (including OMB and HUD), in a case brought in Brooklyn federal court. As a result of the Congressional action, ACORN claimed, private funding and credit support has also been withheld, threatening the very survival of the organization.

“The suit alleges that resolutions passed in the U.S. House of Representatives declare ACTION guilty of a crime and punishes the organization without a trial. If proven, this action would be a “bill of attainder” forbidden under the U.S. Constitution (Art. I, sec. 9, cl. 3). Most legal commentators sugggest it will likely be difficult for ACORN to prevail, because the Constitutional prohibition is aimed at punitive measures and presmedly would not apply to the government’s discretionary grant programs.”

It will be interesting to see how this all turns out…