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If one were to listen to most conservative politicians and pundits these days, you'd come away with the impression that the Recovery Act has failed. It hasn't created any jobs and it hasn't helped the economy, so the narrative goes. For instance, here are a few quotes from the past couple weeks:

"All this 'stimulus' spending has gotten us nowhere." -House Minority Leader John Boehner (R-OH)

"[The stimulus] is simply not working." -Greta Van Susteren

"Everyone understands it was a payoff, not a jobs-creator." -Charles Krauthammer

"More people believe that Elvis Presley is alive than the stimulus created jobs." -Rep. Kevin McCarthy (R-CA)

"[The Recovery Act] increased the number of full-time-equivalent jobs by 2.0 million to 4.8 million compared with what would have occurred otherwise." -Congressional Budget Office

Whoops, sorry, that last one was actually a quote from the CBO's new report on the Act's effects on the economy. The independent, non-partisan institution reported that, contrary to what many seem to think, the Recovery Act raised real GDP by between 1.7 and 4.5 percent, lowered unemployment by between .7 and 1.8 percentage points, and increased the number of people employed by between 1.4 million and 3.3 million. And that was just looking at what happened between April and June 2010.

In other words, the Recovery Act hasn't failed; on the contrary, it's had an immense effect on the nation's economy. The fact that we're still plagued by high unemployment and a faltering economy indicates that the Act wasn't nearly big enough, not that it hasn't worked.

Oh, and for those keeping score at home, the CBO report also revised downwards the cost of the Recovery Act. The total price tag will be about $814 billion, down from the CBO's earlier estimate of $867 billion.

Image by Flickr user calamity1 used under a Creative Commons license.

In Wednesday's New York Times, there was an interesting coda to one of our recent Watcher articles: despite receiving large amounts of money from the recently passed state aid bill, school districts are not acting quickly to rehire fired teachers. The worry is next fiscal year might see even larger budget gaps, necessitating another, larger, round of firings. So the school districts would rather save the money, to try to stave off what could be an even worse FY 2011, and in the process, are potentially hamstringing any positive effects of the state aid bill.

Interestingly, this is the same problem facing the nation at a larger level. The future is as uncertain as ever, with many worried about their job security. The American people, as a whole, are guarding against that uncertainty by spending less and saving more. If you're worried you're not going to have a job in six months, you're definitely not going to be going out and buying that new car, or going out to the movies as often. This trend is borne out by looking at the nation's personal savings rate, measured as a share of disposable income, which is currently at its highest level since the early 1990s. In essence, then, the school districts aren't doing anything different than the rest of the nation. Everyone's saving to prepare to a bleak tomorrow.
This lower level of spending, or lower aggregate demand, is what is keep the nation's economy depressed. That's why we need significant federal investment in the economy, through stimulus bills like the Recovery Act, to make up for the lower consumer spending. And that's why we need a second stimulus. Clearly, half-hearted spending bills like the state aid bill are not enough to kick start this economy.

Testifying before a Senate subcommittee last week about efforts to deploy a sophisticated fraud-prevention tool developed through the Recovery Act across all federal agencies, a government official told senators that the "biggest impediment" to successful utilization of the technology is "the lack of a...governmentwide award number system." Adoption of such a system, which would provide a universal code to government contract awards, could transform federal contracting oversight.
In June, the Obama administration announced that in combination with creating a master "do not pay" list, the Office of Management and Budget (OMB) would roll out the Recovery Act anti-fraud tool at the Centers for Medicare and Medicaid Services to test its effectiveness on reducing improper payments. The tool uses "crowd sourcing," data mapping techniques, and regression-based analysis to show potential fraud.

Now, OMB would like to utilize the tool across the federal government. But, as Earl Devaney, head of the Recovery Accountability and Transparency (RAT) Board, told members of a Senate Homeland Security and Governmental Affairs subcommittee, because "every government agency uses a unique alphanumeric coding system to label payouts," government employees have to "almost hand search...awards to make sure that they match up."
While adoption of a standard coding system would undoubtedly aid federal agencies in utilizing the Recovery Act's anti-fraud technology, it seems that there would be significant additional benefits for contracting oversight and accountability.
The focus of the administration's contracting reform efforts, which parallel its larger goal of improving government transparency and accountability, all hinge on linking information together to provide the fullest picture to the end user.
The difficulty of accomplishing this goal stems from information often being scattered across disparate repositories and the records in those repositories lacking a universal mark to link them together, both in terms of the contract and the contractor. Because of this, good government groups are constantly finding errors with data in USASpending.gov, the public's resource for federal government spending.
The Obama administration has begun to link those disparate repositories together, but it has yet to address the issue of better linking the records together. It seems that the government would theoretically solve one side of the difficult dilemma of linking contracting records together with adoption of a standard coding system for contract awards, which would only leave the creation of a unique, publically available identifier for contractors.
Image by Flickr user pasukaru76 used under a Creative Commons license.

Access to affordable broadband service is seen as vital to economic growth and improved quality of life. To extend broadband access and adoption, the American Recovery and Reinvestment Act (Recovery Act) provided $7.2 billion to the Department of Commerce's National Telecommunications and Information Administration (NTIA) and the Department of Agriculture's Rural Utilities Service (RUS) for grants or loans to a variety of program applicants. The agencies are awarding funds in two rounds and must obligate all funds by September 30, 2010. This report addresses the results of the first broadband stimulus funding round, the extent to which NTIA's and RUS's application reviews substantiated application information, the challenges facing NTIA and RUS in awarding the remaining funds, and actions taken to oversee grant and loan recipients. GAO analyzed program documentation, reviewed a judgmentally-selected sample of applications from first round award recipients, and interviewed agency officials and industry stakeholders. In the first round of broadband stimulus funding that began in July 2009 and ended in April 2010, NTIA and RUS received over 2,200 applications and awarded 150 grants, loans, and loan/grant combinations totaling $2.2 billion to a variety of entities in nearly every state and U.S. territory. This funding includes $1.2 billion for 82 projects awarded by NTIA and more than $1 billion for 68 projects awarded by RUS. NTIA primarily awarded grants to public entities, such as states and municipalities, whereas RUS made grants, loans, and loan/grant combinations primarily to private-sector entities, such as for-profit companies and cooperatives. NTIA and RUS consistently substantiated information in first round award recipients' applications. The agencies and their contractors reviewed financial, technical, environmental, and other documents and determined the feasibility and reasonableness of each project. GAO's review of 32 award recipient applications found that the agencies consistently reviewed the applications and substantiated the information as specified in the first funding notice. In each of the files, GAO observed written documentation that the agencies and their contractors reviewed and verified pertinent application materials, and requested additional documentation where necessary. To meet the Recovery Act's September 30, 2010, deadline for obligating broadband funds, NTIA and RUS must award approximately $4.8 billion--or more than twice the amount they awarded during the first round--in less time than they had for the first round. As the end of the Recovery Act's obligation deadline draws near, the agencies may face increased pressure to approve awards. NTIA and RUS also lack detailed data on the availability of broadband service throughout the country, making it difficult to determine whether a proposed service area is unserved or underserved, as defined in the program funding notices. To address these challenges, NTIA and RUS have streamlined their application review processes by, for example, eliminating joint reviews and reducing the number of steps in the due-diligence review process, and NTIA began using Census tract data to verify the presence of service. NTIA and RUS are putting oversight plans in place to monitor compliance and progress for broadband stimulus funding recipients, but some risks remain. The agencies will need to oversee far more projects than in the past and these projects are likely to be much larger and more diverse than projects funded under the agencies' prior broadband-related programs. Additionally, NTIA and RUS must ensure that the recipients construct the infrastructure projects in the entire project area, not simply the area where it may be most profitable for the company to provide service. Both NTIA and RUS face the risk of having insufficient resources to actively monitor Recovery Act funded broadband projects. Because of this, planning for a possible lack of resources for program oversight after September 30, 2010, can help the agencies mitigate the effect of limited resources on postaward oversight. The Secretaries of Agriculture and Commerce should incorporate into their risk-based monitoring plans, steps to address variability in funding levels for postaward oversight beyond September 30, 2010. Both agencies took no position on GAO's recommendation and noted steps being taken to complete their respective programs.

by Karen Weise

The Obama administration is on track to reach a self-imposed stimulus milestone: spending 70 percent of Recovery Act money by the end of September.

The administration set the goal in February, on the first anniversary of the bill. According to our Stimulus Progress Bar that tracks spending, 62 percent of stimulus money has gone out the door, putting $490 billion into the economy. If the administration keeps spending at the same rate it has so far this year -- both in terms of direct spending and tax cuts -- it should easily meet the goal.

Last week, the White House released a blog post addressing criticism that more money hasn't gone out the door. Since two-thirds of stimulus money is tax cuts and unemployment checks -- which have already been allocated -- the post explained that the funds "aren't 'unspent' ... they just haven't been paid out yet." Got that?

Speed has been a priority for the stimulus as the administration tries to counter the highest unemployment rates since the early 1980s. The White House Council of Economic Advisers recently estimated that the stimulus has added 2.5 million to 3.6 million jobs to the economy.

Check out stimulus spending by agency on our interactive Stimulus Progress Bar, and how fast agencies are moving money out the door on our Stimulus Speed Chart.

by Philip Mattera, Good Jobs FirstMore...

The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides $70.3 billion for three education programs--the State Fiscal Stabilization Fund (SFSF), Title I of the Elementary and Secondary Education Act (Title I), and Individuals with Disabilities Education Act (IDEA). The Act requires recipients to be accountable for how these funds are being used and what is being achieved. To help attain the level of transparency needed for accountability, recipients are to report quarterly on their award activities and expected outcomes. This information is available to the public on Recovery.gov, the government's official Recovery Act Web site. This report covers three Education programs funded by the Recovery Act. It (1) describes what the Office of Management and Budget (OMB) and the Department of Education (Education) did to facilitate implementation of requirements for recipients to describe the use of funds and (2) assesses the extent to which award descriptions are transparent It also describes reported fund uses for a sample of subrecipients. GAO reviewed requirements for reporting in the Act as well as guidance provided by OMB and Education. GAO assessed the transparency of descriptions for the three education programs on Recovery.gov. Both OMB and Education provided guidance to recipients on how to meet the Recovery Act requirement that they report quarterly on the amount and use of the funds they have received. OMB's guidance was generic for all agencies and instructed recipients to report narrative information that captures the overall purpose of the award, describes projects or activities, and states the expected results. Education's guidance was supplemental and program specific to its formula grants that pass through states as the prime recipient to subrecipients, which are local educational agencies (LEA) and institutions of higher education. However, the Recovery Act reporting system does not provide specific narrative fields for collecting information on how each subrecipient is using the funds. Instead, the states are tasked with reporting on fund use throughout the state, and the reporting system limits the amount of narrative information states may enter. For states with many subrecipients, including detailed information on how each subrecipient is using the funds would be extremely challenging, if not impossible. To ease the reporting burden for prime recipients, Education's guidance provided recipients with suggested standard language for use in important narrative fields. GAO determined that 9 percent of the descriptions fully met our transparency criteria; that is, they had sufficiently clear and complete information on the award's purpose, scope and nature of activities, location, cost, outcomes, and status of work. Most descriptions did not include sufficient information on local fund use. Specifically, while 13 percent had most but not all information, the remaining 78 percent contained much less information and only partially met attributes for transparency. We did not find any descriptions that did not include at least some of the information needed to inform the public. Descriptions limited to Education's standard language were less transparent than those with specific information on the programs and activities subrecipients conducted in the state. For example, officials from seven Texas LEAs told us they used ESEA Title I Recovery Act funds for technology purchases for at-risk students, although the information in Texas' project description uses only the standard language. Guidance on reporting requirements for Recovery Act grants that pass through a prime recipient to a subrecipient should balance the need for transparency with the reporting burden and these system limitations. While most states cannot provide information on how each subrecipient is using its funds, providing more information than Education's standard language, such as an overview analysis of how localities are spending the funds, could help the public gain a better understanding of how the funds are being used. GAO recommends that the Secretary of Education, in consultation with OMB, remove the suggested language for the project description field from its guidance and instruct states to include information, to the extent possible, on how the funds are being used and potential project outcomes or results.

State and local governments work in partnership with the federal government to implement numerous intergovernmental programs. Fiscal pressures for state and local governments may exist when spending is expected to outpace revenues for the long term. GAO was asked to examine (1) the long-term fiscal pressures facing state and local governments and historical spending and revenue trends, (2) spending and revenue trends to identify patterns among states, and (3) what is known about the implications of these fiscal pressures for federal policies. Using aggregate data from the Bureau of Economic Analysis's National Income and Product Accounts, this analysis draws on results from the March 2010 update to GAO's state and local government fiscal model. GAO's model uses historical data to simulate expenditures and revenues for the sector for the next 50 years. Data from the U.S. Census Bureau are used to analyze patterns of state and local government expenditures and revenues among the states from 1977 to 2007, the most recent 30-year period for which these data were available. A review of GAO and other reports synthesizes what is known about the implications of these long-term fiscal pressures for future federal policies. Understanding patterns in state and local government expenditures and revenues is crucial for identifying and analyzing potential future fiscal pressures for the sector. The March 2010 update to GAO's state and local fiscal model updates simulations that state and local governments' long-term fiscal position will steadily decline through 2060 absent policy changes. The primary driver of the fiscal pressure confronting the state and local sector is the continued growth in health-related costs. Over the last 30 years, health care spending has increased as a share of state and local spending, growing from 12 percent of overall state and local expenditures in 1978 to 20 percent in 2008. While the temporary infusion of funds from the American Recovery and Reinvestment Act of 2009 helped cushion near-term revenue shortfalls, states will continue to be fiscally stressed. The rates of growth in expenditures and revenues varied among the states during the past 30 years, both overall and within specific categories. Current expenditures grew faster than own-source revenues in almost all states between 1977 and 2007. Average annual growth rates of state and local government expenditures and revenues varied substantially by category and among states. For example, public welfare (which includes Medicaid) was one of the fastest growing expenditure categories. In the aggregate, inflation-adjusted spending on public welfare grew at an average annual rate of 5.3 percent per year and growth rates in individual states ranged from 2.3 percent to 10.9 percent. The growth of intergovernmental revenue from the federal government (grants) also varied among the states. State and local current expenditures grew faster than federal grant revenues in more than half of the states. Despite these trends, the sector in the aggregate usually remained in surplus during this 30-year period. The sector avoided operating deficits, in part because of federal grant growth, and in part because, from 1995 to 2007, the sector increasingly financed capital purchases by issuing debt, rather than with revenues, which left more revenues available to pay for current expenditures. However, if the overall trend of state and local government expenditure growth in excess of revenue growth persists, this growth will put increasing pressure on state and local governments going forward. All levels of government face long-term fiscal challenges which could affect future federal funding of intergovernmental programs, as well as the potential capacity of state and local governments to help fund and implement these programs. The interconnectedness which defines intergovernmental programs requires that officials at all levels of government remain aware of and ready to respond to fiscal pressures. These pressures have implications for a wide range of federal, state, and local programs, policies, and activities, and include costs associated with health care, physical infrastructure, state and local employee pensions and retiree health benefits, and education, among other areas. Actions to address the nation's long-term fiscal outlook will be needed at all government levels in coming years and the challenges cannot be adequately met by shifting burdens from one level of government to another. GAO does not make recommendations in this report.

The American Reinvestment Act of 2009 aims to stimulate the economy, including funding for environmental cleanup projects. The Department of Energy (DOE) receives annual appropriations of $6 billion to support the cleanup of radioactive and hazardous wastes resulting from decades of nuclear weapons research and production. GAO was asked to examine (1) how DOE selected projects for funding and developed cost and schedule targets, (2) project status and extent to which projects are achieving these targets, and (3) key challenges faced and efforts to address them. GAO reviewed Recovery Act project documentation, including cost, schedule, and performance data for 84 projects at 17 sites; visited the 4 sites receiving most of the funding; and interviewed headquarters and site officials. DOE's Office of Environmental Management generally chose to use Recovery Act funds for cleanup projects that could be quickly started and finished. Most projects also had existing contracts, which allowed DOE to update and validate cost and schedule targets within a short time. DOE generally funded four types of projects: decontaminating or demolishing facilities, removing contamination from soil and groundwater, packaging and disposing of transuranic and other wastes, and supporting the maintenance and treatment of liquid tank wastes. In all, DOE selected 84 projects at 17 DOE sites in 12 states for Recovery Act funding, with 4 sites receiving most of the money. As of May 2010, DOE had begun work on all Recovery Act projects and reported creating about 5,600 full-time equivalent jobs at the 17 sites during the first quarter of 2010. Spending on Recovery Act projects has been slower than planned. DOE had obligated about $5.5 billion of the $6 billion in Recovery Act cleanup funding and spent about $1.9 billion of those funds. This sum is less than the $2.3 billion DOE had expected to spend by that time. DOE reported that most Recovery Act projects were achieving cost and schedule targets, although a third of projects were not. DOE has faced familiar challenges in both managing Recovery Act projects and measuring how Recovery Act funding has affected cleanup and other goals. According to DOE officials, a third of projects did not meet cost and schedule targets for some of the same reasons that have plagued DOE in the past: technical, regulatory, safety, and contracting issues. DOE has taken steps aimed at strengthening project management and oversight for Recovery Act projects, such as increasing project reporting requirements and placing tighter controls on when funds are disbursed to sites, but it is uncertain how these steps will ultimately affect Recovery Act project performance, or whether they hold the potential to be useful for cleanup work funded under annual appropriations. Measuring the impact of Recovery Act funding on job creation and DOE's cleanup goals has also been a challenge for DOE, in particular, providing an accurate assessment of the act's impact on jobs, environmental risk reduction, and the life-cycle costs of its cleanup program. DOE has used three different methodologies to assess and report jobs created, which provide very different and potentially misleading, pictures of jobs created. For example, the calculations ranged from about 5,700 jobs to 20,200, depending on the methodology used. Also, DOE has not developed a clear means of measuring how cleanup work funded by the act will affect environmental risk or reduce its footprint--the land and facilities requiring DOE cleanup. Further, it is unclear to what extent Recovery Act funding will reduce the costs of cleaning up the DOE complex over the long term. DOE's estimate of $4 billion in life cycle cost savings resulting from Recovery Act funding was not calculated in accordance with federal guidance. GAO's analysis indicates that those savings could be 80 percent less than DOE estimated. Without clear and consistent measures, it will be difficult to say whether or how Recovery Act funding has affected DOE's cleanup goals. GAO recommends four actions for DOE to improve project management and reporting: (1) determine whether project management and oversight steps adopted for Recovery Act projects would benefit other cleanup projects, (2) clarify the methodology used to calculate jobs created, (3) develop clear and quantifiable measures for determining the impact of Recovery Act funding, and (4) ensure that cost savings are calculated according to federal guidance. DOE agreed with the recommendations.

In connection with the Omnibus Appropriations Act, 2009, GAO was required to study the What Works Clearinghouse (WWC), a federal source of evidence about effective education practices. Operating through a 5-year contract awarded by the U.S. Department of Education's Institute of Education Sciences (IES), the WWC reviews education research and disseminates its findings. GAO examined: (1) the extent to which the WWC review process meets accepted standards for research evaluation and how the WWC has responded to recommendations and criticism, (2) how WWC output and costs have changed over time and how its performance is measured, and (3) how WWC products are disseminated and how useful educators find them to be. To conduct its work, GAO reviewed WWC-related documents, analyzed cost and performance data, surveyed all states and a nationally representative sample of school districts, and interviewed IES officials, WWC contractors, researchers, and others. GAO as well as a congressionallymandated panel of experts, found that the WWC's review process, which includes screening studies to determine if they meet WWC criteria, follows accepted standards for evaluating research on the effectiveness of education interventions. WWC is responding to recommendations made by the expert panel to further improve its review and reporting processes. For example, the panel recommended improvements in the way the WWC presents information to readers on the reasons why studies do not qualify for review. The WWC is revising a report template to include a table summarizing which studies met or did not meet WWC criteria for evaluating research. The WWC has also responded to researchers who have criticized the WWC for presenting limited information because its screening criteria exclude some rigorous research designs that may be appropriate for evaluating certain education programs, such as special education. The WWC responded to this criticism by creating new standards that include two additional study designs and by creating a new product, called a practice guide, which includes a wider range of research. WWC's report output and scope increased under the current contract. For example, the WWC increased its production of various reports, introduced new products, and developed new processes for evaluating research. However, IES had a substantial backlog in its product review process from January 2009 to May 2010. The backlog generally decreased the timeliness of WWC reports, with 20 reports being delayed by up to 6 months. To support the increases in output and scope, WWC's costs doubled from the previous contract to the current one. Both contracts designated about 60 percent of costs to production, while the other 40 percent of costs support other tasks, such as communications, dissemination, and process development. IES' performance goals for the WWC primarily relate to the number of reports produced. However, IES has not developed performance measures related to the cost or usefulness of WWC products. Education uses WWC contractors, Regional Educational Laboratories (RELS) and the Doing What Works (DWW) Web site to disseminate information about WWC products; however, awareness and use of the WWC varies among states, districts, teachers, and principals. WWC contractors disseminate product information in various ways including email alerts and presentations. The RELs host events featuring WWC products for state, district, and school officials and DWW provides resources to educators based on WWC products. Based on our survey, officials from 33 of 38 state education agencies that responded to our survey and an estimated 42 percent of school districts have heard of the WWC. Those states and school districts generally used the WWC to a small or moderate extent to inform decisions on effective practices. Based on our survey, states and school districts reported that they would likely increase their use of the WWC if it included a broader array of information or more timely information. GAO recommends that IES: develop and implement strategies to avoid backlogs in WWC product reviews; establish performance measures related to costs and usefulness; and improve dissemination efforts to promote awareness and use of the WWC. Education generally agreed with GAO's recommendations.

One in four bridges in the United States is either structurally deficient and in need of repair, or functionally obsolete and is not adequate for today's traffic. The Highway Bridge Program (HBP), the primary source of federal funding for bridges, provided about $7 billion to states in fiscal year 2010. This testimony addresses (1) the current state of the nation's bridges and the impacts of the HBP and (2) the extent to which the HBP aligns with principles GAO developed to guide the re-examination of surface transportation programs. This testimony is based on prior GAO reports, updated with bridge data and information provided by agency officials. There are over 600,000 bridges on the nation's roadways, of which one in four is deficient in some sense. Data indicate that the total number of deficient bridges has decreased over the past 12 years, even as the total number of bridges has increased, because of a reduction in the number of structurally deficient bridges. However, the impact of the federal investment in the HBP is difficult to measure, in part because there are no comprehensive and complementary data for state and local bridge spending. The lack of comprehensive information on state and local spending makes it impossible to (1) distinguish the impact of HBP funding from other funding to improve bridge conditions and (2) determine the extent to which states may be substituting increased HBP funding for state and local funds that they would otherwise have spent on bridges. Evaluating the impact of the HBP is important not only to understand the outcome of past spending but also to determine how to sensibly invest future federal resources. The HBP does not fully align with GAO's principles for re-examining surface transportation programs in that the program lacks focus, performance measures, and fiscal sustainability. The program's statutory goals are not focused on a clearly identified national interest but rather have expanded from improving deficient bridges to supporting preventive maintenance and many other projects, thus expanding eligibility to include almost any bridge. In addition, the program lacks measures linking funding to performance and does not utilize new tools such as bridge management systems. Fiscal sustainability also remains a challenge given the nearly $30 billion in additional revenues added to the Highway Account since fiscal year 2008. GAO is not making any new recommendations. In 2008, GAO recommended that the Secretary of Transportation work with Congress to (1) identify and define national goals for HBP, (2) develop and implement performance measures, (3) identify and evaluate best tools and practices, and (4) review and evaluate HBP funding mechanisms to align funding with performance. DOT generally agreed with these recommendations and has taken some actions to work with Congress to address issues GAO raised regarding the HBP, but much work remains. GAO provided a draft of this testimony to FHWA for review. We incorporated FHWA comments, as appropriate.

by Jennifer LaFleur

Nothing says summer like a fresh crop of stimulus data.

So along with our revamped ProPublica website, we bring you the next generation of our Recovery Tracker. As with our last trackers, we started with data from the federal stimulus website, Recovery.gov, and added thousands of stimulus spending records from USAspending.gov.

We also have continued to better track money to the county level. That means that instead of seeing a chunk of money going to your state Department of Education, you’ll see how much money your local counties received from the state (as long as your state reported the information to the Recovery.gov folks).

But wait. That’s not all. The latest version of our Recovery Tracker also includes more information about stimulus vendors. We identified more than 1,300 vendors where no recipient name was reported on Recovery.gov.

Finding our new Recovery Tracker will be easy. It will live online in the new Tools and Data section of ProPublica.org.

And for all you data lovers out there, you still can request a copy of your state’s data.

If you want to know about how we do all this, check out our detailed methodology.

If you'd like to be notified when we publish new data -- Recovery and more -- sign up for ProPublica's data and reporting tools e-mail list.

On this blog, we talk a lot about how great the Recovery Act recipient reports are (these are the reports recipients turn in every quarter explaining what they've done with their Recovery Act funds). Over the past year, we've thrown around words like "groundbreaking" and "historic" to describe how we feel about them. But they aren't perfect. Among other problems, reading the reports can oftentimes leave readers confused about what the project in question actual does, as the main descriptive fields can be anywhere from a few words to lines and lines of text filled with industry jargon.

The Government Accountability Office (GAO) picked up on this in a recent letter to Sen. Mitch McConnell (R-KY) ("letter" is a GAO term for what anyone else would call a report). The GAO letter looks at how Recovery Act information is gathered and displayed. The authors examined the reports, evaluating them to see if they actually helped Recovery Act transparency by conveying pertinent information. The GAO looked for seven things the reports should convey about Recovery Act projects: general purpose, nature of the activity, location, cost, status, desired outcome, and scope. Most of these parameters are actually set out in the Recovery Act itself, or mandated by Office of Management and Budget (OMB) guidance.

In examining some 500 (randomly selected) recipient reports, the GAO found that only about a quarter of the reports "had sufficiently clear and understandable information." About 70 percent of the reports they looked at had at least some information, and seven percent had very little. Specifically, the letter highlighted the narrative fields of the recipient reports, saying that these varied widely in quality, and when reports failed to convey enough information, these descriptive fields were often to blame.

The narrative fields are incredibly important to the overall quality of the reports. Of the seven things the GAO looked for in the reports, four of them, general purpose, nature of the activity, desired outcome, and scope, can only be conveyed through the three main narrative fields, "award description," "project description," and "job creation description." You can't convey these pieces of information through numbers; you need words. It seems like common sense, that descriptive fields need to be descriptive, but reports like the GAO's are useful, since their in-depth studies can confirm or deny what others only speculate about. In this case, the GAO strongly shows that the narrative fields need improvement.

[Side note: if you want to look at some recipient reports to help get a sense of what I'm talking about, and just how bad the descriptive fields can be, check out our Recovery Act tab http://www.fedspending.org/rcv/index.php?reptype=a on fedspending.org. Here is one bad and one good report that the GAO identified in its letter, as a frame of reference.]

Interestingly, some of the news accounts of this report insinuate that these problems are Recovery.gov's fault, which is a bit strange. Recovery.gov, and the Recovery Board, which runs the site, is stuck in this weird situation where they are responsible for the information shown on the website, but have no control over the information they receive through the recipient reports. It is up to OMB, through the guidances it issues, to stipulate what recipients report, and the responsibility of the recipients themselves to report good information. The Recovery Board simply publishes whatever OMB-mandated information the recipients report in, so to blame Recovery.gov for the reports' shortcomings is to basically shoot the messenger.

The real "culprit," if there is one, is OMB and the federal agencies. OMB clearly needs to issue new guidance highlighting the importance of the narrative fields, and the agencies need to push the recipients to provide better entries; the GAO letter recommends both actions in its conclusion, and OMB agreed with the recommendations. Hopefully that means we'll see some new guidance from OMB, highlighting the importance of the narrative field, sometime in the next few months.

Image by Flickr user Lower Columbia College used under a Creative Commons license.

On this blog, we talk a lot about how great the Recovery Act recipient reports are (these are the reports recipients turn in every quarter explaining what they've done with their Recovery Act funds). Over the past year, we've thrown around words like "groundbreaking" and "historic" to describe how we feel about them. But they aren't perfect. Among other problems, reading the reports can oftentimes leave readers confused about what the project in question actual does, as the main descriptive fields can be anywhere from a few words to lines and lines of text filled with industry jargon.

The Government Accountability Office (GAO) picked up on this in a recent letter to Sen. Mitch McConnell (R-KY) ("letter" is a GAO term for what anyone else would call a report). The GAO letter looks at how Recovery Act information is gathered and displayed. The authors examined the reports, evaluating them to see if they actually helped Recovery Act transparency by conveying pertinent information. The GAO looked for seven things the reports should convey about Recovery Act projects: general purpose, nature of the activity, location, cost, status, desired outcome, and scope. Most of these parameters are actually set out in the Recovery Act itself, or mandated by Office of Management and Budget (OMB) guidance.

In examining some 500 (randomly selected) recipient reports, the GAO found that only about a quarter of the reports "had sufficiently clear and understandable information." About 70 percent of the reports they looked at had at least some information, and seven percent had very little. Specifically, the letter highlighted the narrative fields of the recipient reports, saying that these varied widely in quality, and when reports failed to convey enough information, these descriptive fields were often to blame.

The narrative fields are incredibly important to the overall quality of the reports. Of the seven things the GAO looked for in the reports, four of them, general purpose, nature of the activity, desired outcome, and scope, can only be conveyed through the three main narrative fields, "award description," "project description," and "job creation description." You can't convey these pieces of information through numbers; you need words. It seems like common sense, that descriptive fields need to be descriptive, but reports like the GAO's are useful, since their in-depth studies can confirm or deny what others only speculate about. In this case, the GAO strongly shows that the narrative fields need improvement.

[Side note: if you want to look at some recipient reports to help get a sense of what I'm talking about, and just how bad the descriptive fields can be, check out our Recovery Act tab http://www.fedspending.org/rcv/index.php?reptype=a on fedspending.org. Here is one bad and one good report that the GAO identified in its letter, as a frame of reference.]

Interestingly, some of the news accounts of this report insinuate that these problems are Recovery.gov's fault, which is a bit strange. Recovery.gov, and the Recovery Board, which runs the site, is stuck in this weird situation where they are responsible for the information shown on the website, but have no control over the information they receive through the recipient reports. It is up to OMB, through the guidances it issues, to stipulate what recipients report, and the responsibility of the recipients themselves to report good information. The Recovery Board simply publishes whatever OMB-mandated information the recipients report in, so to blame Recovery.gov for the reports' shortcomings is to basically shoot the messenger.

The real "culprit," if there is one, is OMB and the federal agencies. OMB clearly needs to issue new guidance highlighting the importance of the narrative fields, and the agencies need to push the recipients to provide better entries; the GAO letter recommends both actions in its conclusion, and OMB agreed with the recommendations. Hopefully that means we'll see some new guidance from OMB, highlighting the importance of the narrative field, sometime in the next few months.

Image by Flickr user Lower Columbia College used under a Creative Commons license.

The American Recovery and Reinvestment Act of 2009 (Recovery Act), estimated to cost $862 billion over 10 years, is intended to stimulate the economy and create jobs. The Recovery Act provides funds to federal agencies and states, which in turn may award contracts to private companies and other entities to carry out the purposes of the Recovery Act. Contracts using Recovery Act funds are required to be awarded competitively to the maximum extent practicable. GAO was asked to examine the use and oversight of noncompetitive Recovery Act contracts at the federal and state levels. GAO determined (1) the extent that federal contracts were awarded noncompetitively; (2) the reasons five selected federal agencies (the Departments of Defense, Energy, and Health and Human Services; the National Aeronautics and Space Administration; and the Small Business Administration (SBA)) awarded noncompetitive contracts; (3) the oversight these agencies and their inspectors general (IG) provide for Recovery Act contracts; and (4) the level of insight five selected states (California, Colorado, Florida, New York, and Texas) have into the use of noncompetitive Recovery Act contracts. More than two-thirds of the $26 billion obligated for Recovery Act federal contract actions through May 2010 were on contracts that were in place before the enactment of the Recovery Act. Most of these contracts had been awarded competitively. For new federal Recovery Act contract actions, 89 percent of the dollars were obligated on competed actions. Most of the Recovery Act dollars obligated noncompetitively on new contract actions went to socially and economically disadvantaged small businesses under SBA's 8(a) program. The goal of using Recovery Act funds quickly on high-priority projects drove the contracting approaches of the five federal agencies, particularly their use of existing contracts. Officials explained that whether an existing contract had been competed originally did not influence the decision to use a pre-existing contract because the level of competition had been established before Recovery Act funds were available. The selected federal agencies implemented additional review processes, internal reporting, and coordination efforts for the Recovery Act. Some IGs for these agencies focused initial Recovery Act oversight on areas the IGs considered to be higher risk than contracts, such as grant programs. The IG reviews to date have not focused specifically on contracting, including the use of noncompetitive awards to 8(a) program businesses. GAO's recent reviews of the 8(a) program, however, have found that safeguards for ensuring that only eligible firms receive 8(a) contracts may not be working as intended. The five states varied on the type and amount of data routinely collected on noncompetitive Recovery Act contracts. GAO could not determine the full extent to which such contracts are being used. The states generally rely on their pre-Recovery Act contracting policies and procedures, which generally require competition. The states do not routinely provide state-level oversight of contracts awarded at the local level, where a portion of Recovery Act contracting occurs. Officials from the selected states' audit organizations said that if they were to address Recovery Act contracting issues, it could be done through the annual Single Audit or other reviews of programs that involve Recovery Act funds. GAO recommends that the five IGs assess the need to allocate audit resources to noncompetitive 8(a) Recovery Act contracts. The IGs concurred or had no comment.

If there's one thing Republicans and Democrats can agree on, it's that the economy has seen better days. Indeed, looking at various employment statistics, it's hard for anyone to express optimism about the nation's economic condition. The national unemployment rate is 9.5 percent, and the number of workers unemployed for 27 or more weeks is at an historic high. The nation's present economic state has provided ammunition to critics who argue that the Recovery Act, the $787 billion package designed to stimulate the economy, has failed. The current economic situation has prompted calls from others for a second stimulus.

The breadth and depth of this recession (or at least its effects, since the recession officially ended months ago) are far worse than originally thought. During the Obama administration's transition into the presidency, its economic team famously predicted that the highest unemployment would rise would be 9 percent. Therefore, the need for the Recovery Act was predicated on the notion that unemployment would not go higher than 9 percent, and that without stimulus, the unemployment rate would still be as high as 7 percent in 2011.
Unfortunately, the unemployment rate went beyond 9 percent. It eventually peaked at 10 percent and has slowly come down to its current level, though some of that decline can be attributed to discouraged persons dropping out of the job market altogether. Future unemployment predictions don't provide a much brighter picture. A recent report by the International Monetary Fund (IMF) projects unemployment in 2011 to stay above 9 percent, and the president's budget predicts unemployment will be 9.2 percent in 2011. The president's budget also gloomily predicts unemployment will not fall below 7 percent until 2014.
The economy's rough state does not mean that the Recovery Act failed, however. Rather, the high unemployment rate and continued general economic malaise shows that the economy was in worse shape than anyone could have imagined in the beginning. In fact, the Recovery Act has worked rather well. Both independent government agencies and third-party analysts have released many reports showing how the stimulus has helped bolster the economy, adding millions of jobs and boosting the nation's GDP. Yes, the economy is not doing well, but without the Recovery Act, it would be even worse off.
The problem is that the Recovery Act was not large enough. According to Ryan Lizza in an October 2009 New Yorker article, Obama's economic advisors, led by Christina Romer, recommended a much larger stimulus package, at least $1.2 trillion dollars, to help fill what was then predicted to be a $2 trillion hole in the nation's GDP. But because Congress was seen as unwilling to back a package of that size, "there was no serious discussion to going above a trillion dollars," as one Obama aide noted. Thus, thanks largely to political calculations, the administration supported a scaled-back version, which eventually came out to be $787 billion (and which is now worth roughly $862 billion, thanks to rising costs of various kinds), and which was only designed to prevent the nation's economy from outright collapse, not bring it out of recession as soon as possible.
Most of the current stimulus funds have already been obligated by federal agencies, and most of the funds will be paid out over the course of the coming year. In other words, the Recovery Act is beginning to run down, and its ability to pull the nation out of its economic slump is waning. With both the IMF and the White House forecasting 9 percent unemployment through 2011, the recession's effects are clearly going to be staying with us well past the effective end of the Recovery Act.
Since the economy is still struggling – in spite of everything that the underfunded Recovery Act has been able to accomplish – the nation needs a second stimulus. Another infusion of at least several hundred billion dollars will both alleviate the impact of the recession – through aid to the unemployed and support to the states – and help kick-start the economy. The nation is recovering, as demonstrated by rising GDP and falling unemployment, but it is not improving fast enough. States and local governments are still slashing spending and laying off workers, noticeably slowing the national recovery. A significant increase in the right type of federal spending can offset these cuts and further accelerate the economic upturn.
The second stimulus should not follow the blueprint of the first Recovery Act. About one-third of the Recovery Act was comprised of tax cuts, which, while helpful from a political standpoint, do not help the economy nearly as much as other forms of spending, at least in terms of having a multiplier effect. Of course, that's not to say that Congress should completely ignore the original stimulus' architecture: the act's prioritization of infrastructure projects, of reinvesting in the nation, was a good one, and should be repeated in the second stimulus.
In other words, Congress should immediately pass legislation to extend unemployment insurance to those out of work. That should be followed by a targeted bill that provides aid to states and spends additional funds on infrastructure projects.
Fiscal hawks argue that this prescription is absurd, since the nation is burdened with high deficits. They will agree to pass extended unemployment insurance but only if it is paid for by cutting other spending – exactly the wrong strategy at this time. These lawmakers raise the specter of ever-increasing debt levels, sky-high interest payments, and declining investor confidence, and they point to the ongoing fiscal crisis in Greece as a warning of what could happen to the United States. But these arguments fundamentally misstate the current economic environment.
Deficits are only problematic when potential lenders to the federal government are concerned by the prospect of government default. The concern is shown by subsequent demand for higher interest rates, which also makes it expensive for the government to borrow. In Greece, as investors began to doubt the nation's ability, or desire, to pay back its debt, the country slipped into a debt crisis. However, market data show no signs that investors think the U.S. is on the brink of default. Rates on 10-year Treasury notes are still low, and more importantly, stable. We are not even close to a Greece-like situation, as investors are clearly showing. If our nation's leaders believe it is necessary to take on more debt, there will most certainly be buyers.
Moreover, now is not the time for deficit reduction. It is far more important to get the economy back on track. Potentially having to pay larger interest payments in the future is certainly worth alleviating the very real current effects of the recession and helping get the nation back on its fiscal feet. The sooner the unemployment rate drops, the sooner the economy can begin to grow again and the sooner the nation's tax revenues will rebound, helping to bring down deficits in a self-correcting manner.

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Since the Department of Energy's (DOE) loan guarantee program (LGP) for innovative energy projects was established in Title XVII of the Energy Policy Act of 2005, its scope has expanded both in the types of projects it can support and in the amount of loan guarantee authority available. DOE currently has loan guarantee authority estimated at about $77 billion and is seeking additional authority. As of April 2010, it had issued one loan guarantee for $535 million and made nine conditional commitments. In response to Congress' mandate to review DOE's execution of the LGP, GAO assessed (1) the extent to which DOE has identified what it intends to achieve through the LGP and is positioned to evaluate progress and (2) how DOE has implemented the program for applicants. GAO analyzed relevant legislation, prior GAO work, and DOE guidance and regulations. GAO also interviewed DOE officials, LGP applicants, and trade association representatives. DOE has broadly indicated the program's direction but has not developed all the tools necessary to assess progress. DOE officials have identified a number of broad policy goals that the LGP is intended to support, including helping to mitigate climate change and create jobs. DOE has also explained, through agency documents, that the program is intended to support early commercial production and use of new or significantly improved technologies in energy projects that abate emissions of air pollutants or of greenhouse gases and have a reasonable prospect of repaying the loans. GAO has found that to help operationalize such policy goals efficiently and effectively, agencies should develop associated performance goals that are objective and quantifiable and cover all program activities. DOE has linked the LGP to two departmentwide performance goals, namely to (1) double renewable energy generating capacity by 2012 and (2) commit conditionally to loan guarantees for two nuclear power facilities to add a specified minimum amount of capacity in 2010. However, the two performance goals are too few to reflect the full range of policy goals for the LGP. For example, there is no performance goal for the number of jobs that should be created. The performance goals also do not reflect the full scope of program activities; in particular, although the program has made conditional commitments to issue loan guarantees for energy efficiency projects, there is no performance goal that relates to such projects. Without comprehensive performance goals, DOE lacks the foundation to assess the program's progress and, more specifically, to determine whether the projects selected for loan guarantees help achieve the desired results. DOE has taken steps to implement the LGP for applicants but has treated applicants inconsistently and lacks mechanisms to identify and address their concerns. Among other things, DOE increased the LGP's staff, expedited procurement of external reviews, and developed procedures for deciding which projects should receive loan guarantees. However, GAO found: (1) DOE's implementation of the LGP has treated applicants inconsistently, favoring some and disadvantaging others. For example, DOE conditionally committed to issuing loan guarantees for some projects prior to completion of external reviews required under DOE procedures. Because applicants must pay for such reviews, this procedural deviation has allowed some applicants to receive conditional commitments before incurring expenses that other applicants had to pay. It is unclear how DOE could have sufficient information to negotiate conditional commitments without such reviews. (2) DOE lacks systematic mechanisms for LGP applicants to administratively appeal its decisions or to provide feedback to DOE on its process for issuing loan guarantees. Instead, DOE rereviews rejected applications on an ad hoc basis and gathers feedback through public forums and other outreach efforts that do not ensure the views obtained are representative. Until DOE develops implementation processes it can adhere to consistently, along with systematic approaches for rereviewing applications and obtaining and addressing applicant feedback, it may not fully realize the benefits envisioned for the LGP. GAO recommends that DOE develop performance goals reflecting the LGP's policy goals and activities; revise the loan guarantee process to treat applicants consistently unless there are clear, compelling grounds not to do so; and develop mechanisms for administrative appeals and for systematically obtaining and addressing applicant feedback. DOE said it is taking steps to address GAO's concerns but did not explicitly agree or disagree with the recommendations.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) mandates GAO to review states' and localities' use of funds made available under the act. Since April 2009, GAO has published bimonthly reports on our findings related to federal, state, and local implementation of the Recovery Act. Currently, we are examining the efforts of selected states and local educational agencies (LEA) to ensure appropriate uses of Recovery Act funds. In North Carolina, we have been reviewing efforts undertaken by the North Carolina Department of Public Instruction (DPI) and selected LEAs to administer and oversee the use of Recovery Act funds under the State Fiscal Stabilization Fund (SFSF) education stabilization funds; Title I of the Elementary and Secondary Education Act of 1965 (ESEA Title I), as amended; and Part B of the Individuals with Disabilities Education Act (IDEA); as amended. As part of this effort, we met with various DPI staff and, from February 1 through 3, 2010, we visited Avery County Schools (ACS) to review and test the adequacy of controls and procedures in place pertaining to Recovery Act funds for these three federal programs. During our visit, we interviewed finance and program officials regarding internal controls, procurement procedures, and use of Recovery Act education funds. We also reviewed a nonstatistical sample of 13 expenditures of Recovery Act funds for goods and services under these three programs. As of January 27, 2010, ACS spent about $755,000 in Recovery Act funds. We primarily focused our work on two expenditures in our sample that ACS officials reported as their largest Recovery Act nonsalary expenditures. These two expenditures totaled nearly $105,000. We conducted our work from February 1, 2010, to April 20, 2010, in accordance with generally accepted government auditing standards. The purpose of this report is to bring to the attention of DPI our findings related to ACS. In the course of our work, we observed that ACS has an internal control system in place for processing purchasing documents and payments of invoices. However, we found a weakness in the procurement processes related to the Recovery Act expenditures that we reviewed. Specifically, we found the following: For its two largest Recovery Act purchases, ACS staff could not provide documentation to show that the district obtained multiple bids or price quotes for contracts for goods and services. ACS's two largest purchases with Recovery Act funds were for student assessment software and handheld computer devices entitled "Wireless Generation" that were purchased with ESEA Title I and IDEA Part B Recovery Act funds for $91,058.98 and a teacher planning software and professional development package entitled "Rubicon" for which the district used $13,680.00 of its ESEA Title I Recovery Act funds. Regarding both purchases, ACS officials acknowledged that their procurement processes were not in compliance with state management directives for Recovery Act funds or with ACS's purchasing policy, at the time, to solicit bids or obtain price quotes for purchases costing $10,000 or more. For these two contracts, ACS officials did not maintain documentation of multiple bids or price quotes for contracts purchased with Recovery Act funds. ACS officials provided what appeared to be two conflicting justifications for electing not to follow the above-referenced state management directives. Officials said that one reason they did not obtain multiple price bids or quotes was that they considered aspects of the contracts to be "purchased services" (i.e., software subscriptions), which are not required to be competed under the LEA's purchasing policy. However, ACS officials also said that the district did not obtain multiple price quotes for the equipment associated with the "Wireless Generation" purchase because they believed that only one vendor could provide the service and equipment.

The American Recovery and Reinvestment Act of 2009 (Recovery Act) mandates GAO to review states' and localities' use of funds made available under the act. Currently, we are examining the efforts of selected states and local educational agencies (LEA) to ensure appropriate uses of Recovery Act funds. In North Carolina, we have been reviewing efforts undertaken by the North Carolina Department of Public Instruction (DPI) and selected LEAs to administer and oversee the use of Recovery Act funds under the State Fiscal Stabilization Fund (SFSF) education stabilization funds; Title I of the Elementary and Secondary Education Act of 1965 (ESEA Title I), as amended; and Part B of the Individuals with Disabilities Education Act (IDEA), as amended. According to Education regulations, grant funds may only be used for allowable costs and reasonable fees or profit to cost-type contractors, and state and local governments must follow the cost principles set out in OMB Circular No. A-87 for determining allowable costs. North Carolina's Office of Economic Recovery & Investment (OERI) issued management directives regarding the use of Recovery Act funds for procurement of goods and services. According to state officials, OERI directives require recipients of Recovery Act funds to advertise contracts for $5,000 or more and obtain multiple bids or price quotes for Recovery Act procurements. Winston-Salem/Forsyth County Schools (WSFCS) expended $38,400 of ESEA Title I funds on a program that included some expenses that appeared to constitute entertainment, a potentially unallowable use of these funds. WSFCS officials told us that the LEA paid ESEA Title I Recovery Act funds to the Housing Authority of Winston-Salem (HAWS) for a 2009 summer educational program for students entitled the "Summer Teaching Enrichment Program" (STEP). According to STEP officials, the ESEA Title I funds comprised the majority of STEP's 2009 budget, which also included funding from a local corporation and the local police department. WSFCS and STEP officials described the program as providing remedial academic assistance in reading, math, science, and technology to help students retain educational gains over the summer months. Furthermore, the WSFCS Superintendent said that the district's arrangement with the STEP program was to use district funds to pay only for teachers' salaries, and that other sources of funds would be used to pay for noneducational activities. HAWS officials said that they were instructed by a WSFCS official to make sure that all of the children enrolled in the program attended ESEA Title I schools and that they obtained confirmation from the district that all of the children did so. In our review of documents, we found evidence that in addition to paying teachers a total of $17,270 in salaries, HAWS also used ESEA Title I funds to pay for STEP activities that included other salaries and field trip-related expenses, including tickets for movies, a water park, fast food, and other entertainment. The invoice that HAWS provided to WSFCS lacked supporting documentation for the full range of activities paid with ESEA Title I funds. Instead, payment was made at a rate of $800 per child attending the program, but no attendance records were provided in support of the invoice. WSFCS staff could not provide documentation to show that the district obtained multiple bids or price quotes for contracts for goods and services. WSFCS officials also could not provide us with documentation of the district having obtained multiple bids or price quotes for contracts for services. WSFCS officials also acknowledged that for at least one contract, they were not in compliance with WSFCS's purchasing policy to solicit bids/price quotes for purchases of items costing more than $5,000 but less than $90,000.

by Christopher Flavelle

The Obama administration has spent $317 billion of last February’s American Recovery and Reinvestment Act, according to the latest numbers from Recovery.gov. The funds include $198 billion in spending and an estimated $119 billion in tax cuts, and represent just over 40 percent of the nearly $800 billion stimulus package.

You can track stimulus spending by agency on our interactive Stimulus Progress Bar. You can also see how fast that money is moving out the door, by checking out our Stimulus Speed Chart.