Moving quickly and internal controls

I'm reading the GAO report released yesterday about the bailout. Several things jump out. "However, the rapid pace of implementation and evolving nature of the program have hampered efforts to put a comprehensive system of internal control in place." and "While OFS and PricewaterhouseCoopers are working to implement a comprehensive system of internal control, until such a system is fully developed and implemented, there is heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved in an efficient and effective manner." I know in a crisis you can't wait to act but protecting assets is also important, particularly when they are public assets at risk.

So far there is no system in place to monitor compliance of the financial institutions that receive aid. Institutions told the auditors that they intended to use the funds consistent with the goals of the bailout but stated that they would view this capital as no different from their other capital. Most institution officials noted that money is "fungible" and that they did not intend to track the funds received separately. The audit further notes that strong organization of the Office of Financial Stability will be critical. The OFS is relying on contractors and financial agents in the private sector which the audit notes will enhance flexibility but also requires oversight and protection against the risk of conflict of interest. Acknowledging that less than 60 days have passed since the bailout was created, the audit strongly urges the quick implementation of internal controls.

This echoes many local audits that I have been part of over the years. Certainly not of the magnitude and significance of this program, still they included the lack of planning about ensuring how goals will be accomplished. It is not enough to have a plan to address a problem. Government must also have a plan to ensure that the plan is implemented efficiently and effectively. That plan is one of internal controls. It's like planning a trip with a map but driving with your eyes closed.