Compliance Drift in Crisis Funding: A Forensic Governance Model for Tracking State-Level Fiscal Recovery Fund Allocation Decisions Under Administrative Pressure (Published)
The allocation of state-level fiscal recovery funds during systemic crises presents a critical paradox between the imperative for rapid operational velocity and the enduring necessity of fiduciary integrity within modern public institutions. Specifically within the context of the State-Level Fiscal Recovery Fund, this study investigates the complex phenomenon of compliance drift, defined as the gradual decoupling of formal policy from actual practice under intense administrative pressure. The primary research objective is to develop and validate a comprehensive forensic governance model capable of tracking these subtle shifts in real-time to prevent costly federal audit failures. Employing a sequential explanatory mixed-methods design, the research analyzes archival expenditure data from fifteen diverse states alongside semi-structured interviews with thirty-four key state budget officials. Purposive sampling ensured representation of varying audit outcomes. Data collection spanned the critical implementation period from 2021 to 2023, utilizing longitudinal regression analysis and thematic coding to ensure robust triangulation of evidence. This rigorous approach facilitates the deep triangulation of quantitative expenditure patterns with qualitative behavioral insights regarding discretionary decision-making processes. Key findings reveal a statistically significant correlation between disbursement velocity and documentation lag, identifying transaction speed as a primary predictor of subsequent audit risk. The study introduces a composite Drift Index, weighted by specific risk indicators such as approval bypasses and amendment frequencies, which successfully distinguished high-risk jurisdictions prior to formal audit notifications. The model incorporates detailed documentation integrity scores and specific discretion monitoring thresholds to flag anomalies. Comparative case analysis demonstrates that agencies utilizing proactive monitoring protocols maintained compliance despite facing similar pressure levels to non-compliant peers. The results highlight the normalization of deviance as a key behavioral driver, where minor procedural shortcuts evolve into systemic vulnerabilities over time. Theoretically, this research challenges static compliance frameworks prevalent in public administration, proposing a dynamic model grounded in institutional theory and forensic accounting principles. This effectively bridges the existing gap between behavioral public administration and forensic accounting disciplines. It redefines compliance as a continuum susceptible to erosion rather than a binary state of adherence. Practically, the forensic governance model offers actionable tools for mitigating risk exposure and strengthening public accountability mechanisms. The implications extend to significant and necessary policy reform, urging the integration of forensic indicators into standard financial management systems. This protects taxpayer value and reduces the likelihood of federal fund recapture. By shifting the paradigm from retrospective audit to prospective oversight, public administrators can safeguard public resources without compromising emergency response efficacy. This study ultimately provides a robust, empirically verified framework for enhancing fiscal stewardship in high-stakes environments, ensuring that crisis funding achieves intended societal outcomes while maintaining the integrity of democratic institutions. Future applications should focus on integrating advanced artificial intelligence for real-time drift detection capabilities.
Keywords: Audit Risk, Public Administration, administrative pressure, compliance drift, crisis funding, financial management, fiscal recovery fund, fiscal stewardship, forensic governance, public accountability