A major component of the American Recovery and Reinvestment Act (ARRA) is the ability to monitor how funds are being spent and the number of jobs created. The House Appropriations Committee pledged that “a historic level of transparency, oversight, and accountability will help guarantee taxpayer dollars are spent wisely and Americans can see results for their investment.” All recipient reporting for first quarter activity for grants, loans, and contracts are currently available on Recovery.gov, which covers how stimulus funds are being spent, where work is occurring, and how many jobs are being created or saved as a direct result of the stimulus. (Read previous posts on recipient reporting in the blog.) CMAP will begin to analyze reported data for the region, and findings will be included in our Recovery blog and in future Economic Recovery Updates, which you can sign up to receive online.
This effort to achieve transparency has recently received significant media attention due to the discovery of inaccurate recipient reporting published on Recovery.gov. At the local level, Chicago Tribune reported on overestimations of education jobs created or saved in Illinois (in response, the Illinois State Board of Education was asked by the governor to verify numbers of jobs created). Based on reports by the Associated Press and other news outlets across the country, approximately 10 percent of the 640,329 of the jobs created or saved by the stimulus are “doubtful or imaginary,” according to the Washington Examiner (which also created a map to show where erroneous reported occurred). Additionally, some reports on stimulus funds were said to occur in congressional districts that are nonexistent, according to McClatchy.
Steps are being taken in government to correct these errors, and CMAP will be monitoring this process as we analyze reported data for the region. The Recovery Accountability and Transparency Board, at the request of the Office of Management and Budget (OMB), was able to correct reports from non-existent congressional districts on Wednesday, according to a press release. In many cases, recipients incorrectly recorded their congressional districts when filling reports.
Errors and corrections that should be made to correctly monitor job creation are covered in a report released November 19, 2009 by the Government Accountability Office (GAO). The report noted that the data collected from over 100,000 recipients was a “solid first step in moving toward more transparency and accountability for federal funds,” but analysis of recipient data indicated that “there are a range of significant reporting and quality issues that need to be addressed.” The areas of concern include almost 4,000 reports that showed no funding received by included over 50,000 jobs that were created or retained and over 9,000 reports that showed no jobs were created by accounted for nearly $1 billion in stimulus funds. Some reports also featured discrepancies between the amount of funds awarded verses the amount of funds reported as received. Despite much training and guidance from OMB, many recipients had differing interpretations of how the amount of jobs created or retained by the stimulus should be calculated.
GAO recommended that, to improve consistency in job creation/retention reporting, OMB should clarify the calculation process and continue to provide assistance to recipients of funding and federal agencies distributing funds. It was also recommended that OMB work with the Recovery Board and federal agencies to “reexamine review and quality assurance processes, procedures, and requirements,” according to the GAO report.
It is important to remember that only 22 percent, approximately $173 billion of the $787 billion of ARRA, have been paid out to date, according to the GAO report. The recipient reporting in question by the media and the GAO only account for $47 billion in stimulus funds so far. Recipient reported data only covers jobs created or retained, and does take into account “the employment impact on materials suppliers (“indirect” jobs) or on the local community (“induced” jobs), according to the GAO.
Still have questions about recipient reporting? ProPublica published a very helpful FAQ for Recovery.gov (with additional follow up) to help individuals understand the massive amounts of data online.
Click on the icon below to see a chart depicting the recipient reporting time frame (source: OMB).