Infrastructure Infrastructure Financing News & Reports

Fraudsters May Target $120B Infrastructure Funding

At least 10 percent (over $120 billion) of the total $1.2 trillion in federal infrastructure funding flowing to states and local governments for roads, bridges, broadband and other projects over the next five years could be targeted by fraudsters through methods including false documentation, being reimbursed for monies never spent, or phony records, reports Pew Stateline.

Even as watchdogs criticize Congress for failing to include sufficient oversight provisions in the legislation that created the program, some state and local agencies, as well as auditors and inspectors general, across the country may lack the staff or resources to oversee the flood of money and manage the increased workload from auditing all the federal programs related to pandemic funding.

Infrastructure fraud and abuse can range from bid rigging to phony invoices to kickbacks or even contractors using substandard materials, prompting state lawmakers to call for increased scrutiny of COVID-19 relief dollars and infrastructure funding in state capitols via required quarterly reports and quarterly public hearings before legislative committees.

And while the federal infrastructure law does include some oversight requirements, such as requiring grants be awarded on a competitive basis, federal agency reports to Congress on how programs are implemented, and funding to federal agencies’ inspector general offices, watchdogs say Congress should have demanded stronger oversight measures and zeroed in on fraud and abuse, as well as transparency about spending at the federal, state and local level.

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