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Deloitte Survey: Almost Half of Company Respondents Expect Stimulus Plan to Improve Economic Conditions by End of 2010

Antifraud provisions signal government’s intent to combat stimulus-related fraud


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NEW YORK, November 11, 2009 — Although only 32 percent of management respondents reported that the Economic Stimulus Program had improved economic conditions to date, almost half (49 percent) expect improvement by the end of 2010, according to a recent Deloitte survey.

“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 David Williams, leader, Deloitte Financial Advisory Services. “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.”

Two-thirds (67 percent) of survey respondents indicated they did not believe the fraud prevention requirements associated with Stimulus Program funds will be effective in increasing transparency and preventing fraud.

However, when 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)
  • Federal inspectors general ability to examine contractor or subcontractor records and interview any contractor officer or employee (56 percent)
  • 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)

“Employees are often the first line of defense any company has against wrong doing, so it’s reassuring to see that survey respondents generally appreciate how effective whistle-blower hotlines can be in increasing transparency and preventing fraud,” continued Williams.

When asked if the size of the stimulus program was appropriate, 71 percent said it should have been smaller and 50 percent felt the program should have been designed to spend funds more quickly. Almost half (49 percent) indicated that it is unlikely that the United States will need additional economic stimulus funding in the next one to two years, while 28 percent believed it was somewhat likely and 23 percent felt it was very likely.

About the Survey
Deloitte contracted Bayer Consulting to conduct a survey of management in companies regarding their views of the Economic Stimulus Program from Sept. 10 to Oct. 12, 2009 and 343 were responsive. Respondents were from manufacturing (21 percent), financial services (17 percent), technology and telecommunications (12 percent), energy and resources (8 percent) and life sciences and healthcare (7 percent).

Annual revenues for respondents’ employers were more than $1 billion (34 percent), $100 million to less than $1 billion (34 percent) and less than $100 million (32 percent). Survey participants held positions in general management (29 percent), finance (24 percent) and compliance (15 percent).

Learn more by accessing the survey results attached below.

About Deloitte
As used in this document, “Deloitte” means Deloitte Financial Advisory Services LLP and Deloitte Services LP, separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte & Touche USA LLP and its subsidiaries.

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Contacts

Name:
Lauren Mistretta
Company:
Deloitte
Job Title:
Public Relations
Phone:
+1 312 486 4259
Email
lmistretta@deloitte.com

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