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 emergency funds, such as the Fiscal Recovery Fund, creates intense pressure for rapid spending, which can erode compliance standards—a process we term “compliance drift.” During crisis conditions, administrators are required to balance speed, flexibility, and political responsiveness against statutory requirements and internal control expectations. This tension systematically reshapes how compliance is interpreted and operationalized, increasing fiscal risk and complicating post hoc accountability. Despite repeated audit findings across disaster and stimulus programs, existing oversight models remain largely reactive and ill-suited to detecting these shifts as they occur.The central gap addressed by this paper lies in the absence of a governance framework capable of explaining how compliance drift emerges under administrative pressure and of tracking its progression in real time. Traditional audit and monitoring approaches focus on rule adherence after expenditures are made, offering limited insight into the behavioral, procedural, and institutional dynamics that produce risk-laden decisions during emergencies.This study employs theory-building grounded in qualitative analysis of case documentation drawn from state-level Fiscal Recovery Fund allocation processes, audit reports, internal guidance, and oversight memoranda. Through comparative forensic examination, the research identifies recurring patterns in budgeting workflows, documentation practices, and discretionary judgments that signal evolving compliance norms under crisis conditions.Based on this analysis, the paper develops a Forensic Governance Model to explain and track this phenomenon. The model integrates four core components: administrative pressure mapping, internal budget control configuration, documentation integrity assessment, and discretionary decision tracing. Together, these elements provide a structured lens for observing how compliance standards shift across decision points and over time.The principal finding is that the Forensic Governance Model functions as a diagnostic framework capable of identifying specific drift mechanisms, including documentation substitution, control compression, and normalization of exception-based decision-making. By making these mechanisms visible, the model enables agencies and oversight bodies to distinguish legitimate flexibility from emergent compliance failure.The paper concludes that the Forensic Governance Model represents a significant advancement in crisis governance. By repositioning oversight as a proactive, embedded function rather than a post-mortem exercise, the model strengthens transparent decision-making, reduces audit failures, and enhances the resilience and legitimacy of emergency funding programs under conditions of extreme administrative pressure
Keywords: Audit Risk, Public Financial Management, administrative discretion, compliance drift, crisis funding, fiscal recovery fund, forensic governance