Nearly half the managers polled by Deloitte for a new survey expect the government’s economic stimulus plan to improve economic conditions by the end of 2010. However, only 32 percent believe the stimulus has improved economic conditions so far.

The anti-fraud provisions in the Recovery Act passed in February signal the government’s intent to combat stimulus-related fraud, but not all the anti-fraud measures are expected to prove effective, according to the executives polled. Two thirds of the survey respondents indicated they did not believe the fraud prevention requirements associated with stimulus program funds would be effective in increasing transparency and preventing fraud. However, some of the specific measures were believed to be at least somewhat effective.

“Through the economic stimulus program, the government has had and will have a more influential role in our economy than in recent decades, and it has made detecting and preventing fraud and abuse a priority,” said Deloitte Financial Advisory Services leader David Williams. “While it’s too soon to tell what the exact impact of stimulus program requirements related to fiscal transparency and fraud prevention will be on the broader economy, we’re seeing  more companies — whether they applied for stimulus support or not — focusing on tightening their fraud controls.”

When survey respondents were asked whether specific requirements of the stimulus program would be effective in increasing transparency and preventing fraud, the following measures were believed to be somewhat or very effective:

•    The use of competitive procedures and fixed price contracts for procurement (63 percent);
•    The expansion of federal whistle-blower protections and their application to state and local contracts funded under the program (58 percent);
•    The ability of federal inspectors-general to examine contractor or subcontractor records and interview any contractor officer or employee (56 percent); and,
•    Completion of quarterly contractor reports on stimulus-funded projects disclosing the amount of funds expended or obligated, completion status, an estimate of the number of jobs created and retained, and information on subcontracts awarded worth $25,000 or more (52 percent).

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