Recovery Act
Recipient Reported Jobs Data Provide Some Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention Gao ID: GAO-10-223 November 19, 2009The American Recovery and Reinvestment Act of 2009 (Recovery Act) requires recipients of funding from federal agencies to report quarterly on jobs created or retained with Recovery Act funding. The first recipient reports filed in October 2009 cover activity from February through September 30, 2009. GAO is required to comment on the jobs created or retained as reported by recipients. This report addresses (1) the extent to which recipients were able to fulfill their reporting requirements and the processes in place to help ensure data quality and (2) how macroeconomic data and methods, and the recipient reports, can be used to assess the employment effects of the Recovery Act. GAO performed an initial set of basic analyses on the final recipient report data that first became available at www.recovery.gov on October 30, 2009; reviewed documents; interviewed relevant state and federal officials; and conducted fieldwork in selected states, focusing on a sample of highway and education projects.
On October 30, www.recovery.gov (the federal Web site on Recovery Act spending) reported that more than 100,000 recipients reported hundreds of thousands of jobs created or retained. Given the national scale of the recipient reporting exercise and the limited time frames in which it was implemented, the ability of the reporting mechanism to handle the volume of data from a wide variety of recipients represents a solid first step in moving toward more transparency and accountability for federal funds. Because this effort will be an ongoing process of cumulative reporting, GAO's first review represents a snapshot in time. While recipients GAO contacted appear to have made good faith efforts to ensure complete and accurate reporting, GAO's fieldwork and initial review and analysis of recipient data from www.recovery.gov, indicate that there are a range of significant reporting and quality issues that need to be addressed For example, GAO's review of prime recipient reports identified the following: Erroneous or questionable data entries that merit further review: (1) 3,978 reports that showed no dollar amount received or expended but included more than 50,000 jobs created or retained; (2) 9,247 reports that showed no jobs but included expended amounts approaching $1 billion, and (3) Instances of other reporting anomalies such as discrepancies between award amounts and the amounts reported as received which, although relatively small in number, indicate problematic issues in the reporting. Coverage: While OMB estimates that more than 90 percent of recipients reported, questions remain about the other 10 percent. Quality review: While less than 1 percent were marked as having undergone review by the prime recipient, over three quarters of the prime reports were marked as having undergone review by a federal agency. Full-time equivalent (FTE) calculations: Full-time equivalent (FTE) calculations: Under OMB guidance, jobs created or retained were to be expressed as FTEs. GAO found that data were reported inconsistently even though significant guidance and training was provided by OMB and federal agencies. While FTEs should allow for the aggregation of different types of jobs--part time, full time or temporary--differing interpretations of the FTE guidance compromise the ability to aggregate the data. Although there were problems of inconsistent interpretation of the guidance, the reporting process went relatively well for highway projects. Transportation had an established procedure for reporting prior to enactment of the Recovery Act. In the cases of Education and Housing, which do not have this prior reporting experience, GAO found more problems. Some of these have been reported in the press. State and federal officials are examining these problems and have stated their intention to deal with them.
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Report to the Congress:
United States Government Accountability Office:
GAO:
November 2009:
Recovery Act:
Recipient Reported Jobs Data Provide Some Insight into Use of Recovery
Act Funding, but Data Quality and Reporting Issues Need Attention:
GAO-10-223:
GAO Highlights:
Highlights of GAO-10-223, a report to the Congress.
Why GAO Did This Study:
The American Recovery and Reinvestment Act of 2009 (Recovery Act)
requires recipients of funding from federal agencies to report
quarterly on jobs created or retained with Recovery Act funding. The
first recipient reports filed in October 2009 cover activity from
February through September 30, 2009. GAO is required to comment on the
jobs created or retained as reported by recipients. This report
addresses (1) the extent to which recipients were able to fulfill their
reporting requirements and the processes in place to help ensure data
quality and (2) how macroeconomic data and methods, and the recipient
reports, can be used to assess the employment effects of the Recovery
Act. GAO performed an initial set of basic analyses on the final
recipient report data that first became available at [hyperlink,
http://www.recovery.gov] on October 30, 2009; reviewed documents;
interviewed relevant state and federal officials; and conducted
fieldwork in selected states, focusing on a sample of highway and
education projects.
What GAO Found:
As of September 30, 2009, approximately $173 billion of the $787
billion”or about 22 percent”of the total funds provided by the Recovery
Act had been paid out by the federal government. Nonfederal recipients
of Recovery Act-funded grants, contracts, and loans are required to
submit reports with information on each project or activity, including
the amount and use of funds and an estimate of jobs created or
retained. Of the $173 billion in funds paid out, about $47 billion”a
little more than 25 percent”is covered by this recipient report
requirement. Neither individuals nor recipients receiving funds through
entitlement programs, such as Medicaid, or through tax programs are
required to report. In addition, the required reports cover direct jobs
created or retained as a result of Recovery Act funding; they do not
include the employment impact on materials suppliers (indirect jobs) or
on the local community (induced jobs). (See figure.)
Figure: Fiscal Year 2009 Recovery Act Funds Paid Out and Recipient
Reporting Coverage:
[Refer to PDF for image: pie-chart and illustration]
Recovery Act funds paid out, end of fiscal year 2009 (in billions):
Entitlements: $63.7;
Tax relief: $62.5;
Contracts, grants, and loans: $47;
Total: $173.
Potential employment effects of Recovery Act contracts, grants and
loans:
Contracts, grants, and loans:
Recipient reporting coverage: Direct.
[End of figure]
On October 30, www.recovery.gov (the federal Web site on Recovery Act
spending) reported that more than 100,000 recipients reported hundreds
of thousands of jobs created or retained. Given the national scale of
the recipient reporting exercise and the limited time frames in which
it was implemented, the ability of the reporting mechanism to handle
the volume of data from a wide variety of recipients represents a solid
first step in moving toward more transparency and accountability for
federal funds. Because this effort will be an ongoing process of
cumulative reporting, GAO‘s first review represents a snapshot in time.
Data Reporting and Quality:
While recipients GAO contacted appear to have made good faith efforts
to ensure complete and accurate reporting, GAO‘s fieldwork and initial
review and analysis of recipient data from www.recovery.gov, indicate
that there are a range of significant reporting and quality issues that
need to be addressed.
For example, GAO‘s review of prime recipient reports identified the
following:
Erroneous or questionable data entries that merit further review:
* 3,978 reports that showed no dollar amount received or expended but
included more than 50,000 jobs created or retained;
* 9,247 reports that showed no jobs but included expended amounts
approaching $1 billion, and;
* Instances of other reporting anomalies such as discrepancies between
award amounts and the amounts reported as received which, although
relatively small in number, indicate problematic issues in the
reporting.
Coverage: While OMB estimates that more than 90 percent of recipients
reported, questions remain about the other 10 percent.
Quality review: While less than 1 percent were marked as having
undergone review by the prime recipient, over three quarters of the
prime reports were marked as having undergone review by a federal
agency.
Full-time equivalent (FTE) calculations: Under OMB guidance, jobs
created or retained were to be expressed as FTEs. GAO found that data
were reported inconsistently even though significant guidance and
training was provided by OMB and federal agencies. While FTEs should
allow for the aggregation of different types of jobs”part time, full
time or temporary”differing interpretations of the FTE guidance
compromise the ability to aggregate the data.
To illustrate, in California, two higher education systems calculated
FTE differently. In the case of one, officials chose to use a 2-month
period as the basis for the FTE performance period. The other chose to
use a year as the basis for the FTE. The result is almost a three-to-
one difference in the number of FTEs reported for each university
system in the first reporting period. Although the Department of
Education provides alternative methods for calculating an FTE, in
neither case does the guidance explicitly state the period of
performance of the FTE.
Although there were problems of inconsistent interpretation of the
guidance, the reporting process went relatively well for highway
projects. Transportation had an established procedure for reporting
prior to enactment of the Recovery Act. In the cases of Education and
Housing, which do not have this prior reporting experience, GAO found
more problems. Some of these have been reported in the press. State and
federal officials are examining these problems and have stated their
intention to deal with them.
GAO will continue to monitor and review the data reporting and quality
issues in its bimonthly reviews and fieldwork on the use of funds in
the 16 states and the District of Columbia, and in GAO‘s analysis of
future quarterly recipient reporting.
Recommendations for Executive Action:
To improve the consistency of FTE data collection and reporting, OMB
should (1) clarify the definition and standardize the period of
measurement for FTEs and work with federal agencies to align this
guidance with OMB‘s guidance and across agencies; (2) given its
reporting approach, consider being more explicit that ’jobs created or
retained“ are to be reported as hours worked and paid for with Recovery
Act funds; and (3) continue working with federal agencies and encourage
them to provide or improve program-specific guidance to assist
recipients, especially as it applies to the full-time equivalent
calculation for individual programs.
OMB should also work with the Recovery Accountability and Transparency
Board and federal agencies to re-examine review and quality assurance
processes, procedures, and requirements in light of experiences and
identified issues with this round of recipient reporting and consider
whether additional modifications need to be made and if additional
guidance is warranted.
Employment Effects:
Even if the data quality issues are resolved, it is important to
recognize that the FTEs in recipient reports alone do not reflect the
total employment effects of the Recovery Act. As noted, these reports
solely reflect direct employment arising from the expenditure of less
than one-third of Recovery Act funds. Therefore, both the data reported
by recipients and other macroeconomic data and methods are necessary to
gauge the overall employment effects of the stimulus. The Recovery Act
includes entitlements and tax provisions, which also have employment
effects. The employment effects in any state will vary with labor
market stress and fiscal condition, as discussed in this report.
What GAO Recommends:
GAO is recommending steps OMB should take in continuing to work with
federal agencies to increase recipients‘ understanding of the reporting
requirements and guidance. OMB staff generally agreed with our
recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-10-223] or key
components. For more information, contact J. Christopher Mihm at (202)
512-6806 or mihmj@gao.gov.
[End of section]
Contents:
Letter:
Background:
Recipients of Recovery Act Funds We Contacted Appear to Have Made Good
Faith Efforts to Ensure Complete and Accurate Reporting, but It Will
Take Time to Improve Data Quality:
Recommendations for Executive Action:
Despite Limitations, Economic Methods and Recipient Reports Together
Can Provide Insight into the Employment Effects of Fiscal Stimulus:
Agency Comments:
Appendix I: Calculating Full-Time Equivalent Data--Examples of Guidance
and Challenges:
Appendix II: Department of Education Calculations to Determine Full-
Time Equivalents (FTE) for Jobs Created or Retained:
Appendix III: GAO Contacts and Staff Acknowledgments:
Tables:
Table 1: Jobs Created or Retained by States as Reported by Recipients
of Recovery Act Funding:
Table 2: Jobs Created or Retained by Federal Program Agency as Reported
by Recipients of Recovery Act Funding:
Table 3: Count of Prime Recipient Reports by Presence or Absence of
FTEs and Recovery Act Funds Received or Expended:
Table 4: Aggregation of FHWA FTE Data:
Table 5: OMB's Cumulative FTE versus a Standardized Measure:
Table 6: Prime Recipient Reports Reviews and Corrections:
Table 7: Estimated Multipliers for Recovery Act Spending and Tax
Expenditures:
Table 8: State Unemployment Rates, Peak and Most Recent:
Table 9: Change in Employment, December 2007 to September 2009:
Table 10: Derivation of Number of Hours Created or Retained:
Figures:
Figure 1: The Potential Employment Effects of Recovery Act Funds:
Figure 2: Recipient Reporting Time Frame:
Figure 3: Distribution of Recovery Act Funds through the End of Fiscal
Year 2009:
Figure 4: FHWA's Recipient Reporting Data Structure:
Figure 5: Composition of Recovery Act Outlays by Jobs Multiplier
Category:
Figure 6: State Unemployment Rates, September 2009:
Figure 7: State Unemployment Rate Growth during Recession (Percent
Increase):
Figure 8: State and Local Tax Receipts:
Figure 9: Total Year-End Balances as a Percentage of Expenditures,
Fiscal Year 2009:
Abbreviations:
CBO: Congressional Budget Office:
CCR: Central Contractor Registration:
CEA: Council of Economic Advisers:
CFDA: Catalog of Federal Domestic Assistance:
CIO: chief information officer:
DOT: Department of Transportation:
EBO: Equitable Business Opportunities:
Education: Department of Education:
FDOT: Florida Department of Transportation:
FHWA: Federal Highway Administration:
FRPIN: Federal Reporting Personal Identification Number:
FTE: full-time equivalent:
GDOT: Georgia Department of Transportation:
GDP: gross domestic product:
HHS: Department of Health and Human Services:
HUD: Department of Housing and Urban Development:
IG: inspector general:
LEA: local education agency:
OIG: Office of Inspector General:
OMB: Office of Management and Budget:
RADS: Recovery Act Data System:
RAMPS: Recovery Act Management and Performance System:
Recovery Act: American Recovery and Reinvestment Act of 2009:
Recovery Board: Recovery Accountability and Transparency Board:
SEA: state education agency:
SFSF: State Fiscal Stabilization Fund:
TAS: Treasury Account Symbol:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
November 19, 2009:
Report to the Congress:
Congress and the new administration crafted the American Recovery and
Reinvestment Act of 2009 (Recovery Act)[Footnote 1] with the broad
purpose of stimulating the economy. One of the express purposes of the
act was to preserve and create jobs. To help measure the progress of
this effort, Congress and the administration built into the act
numerous provisions to increase transparency and accountability over
spending that require recipients of Recovery Act funding to report
quarterly on a number of measures. Nonfederal recipients of Recovery
Act funded grants, contracts, or loans are required to submit reports
with information on each project or activity, including the amount and
use of funds and an estimate of the jobs created or retained.[Footnote
2] Neither individuals nor recipients receiving funds through
entitlement programs, such as Medicaid, or tax programs are required to
report. The first of these recipient reports cover cumulative activity
since the Recovery Act's passage in February 2009 through the quarter
ending September 30, 2009. The Recovery Act requires GAO to comment on
the estimates of jobs created or retained in the recipient reports no
later than 45 days after recipients have reported.[Footnote 3] The
final recipient reporting data for the first round of reports were
first made available on October 30, 2009.
The transparency that is envisioned for tracking Recovery Act spending
and results is unprecedented for the federal government. Both Congress
and the President have emphasized the need for accountability,
efficiency, and transparency in the expenditure of Recovery Act funds
and have made it a central principle of the act. As Congress finished
work on the Recovery Act, the House Appropriations Committee released a
statement saying, "A historic level of transparency, oversight and
accountability will help guarantee taxpayer dollars are spent wisely
and Americans can see results for their investment." In January, the
new administration pledged that the Recovery Act would "break from
conventional Washington approaches to spending by ensuring that public
dollars are invested effectively and that the economic recovery package
is fully transparent and accountable to the American people." However,
tracking billions of dollars that are being disbursed to thousands of
recipients is an enormous effort. The administration expects that
achieving this degree of visibility will be an iterative process in
which the reporting process and information improve over time and, if
successful, could be a model for transparency and oversight beyond the
Recovery Act.
This report, the first in response to the Recovery Act's section 1512
mandate that GAO comment on the estimates of jobs created or retained
by direct recipients of Recovery Act funds, addresses the following:
(1) the extent to which recipients were able to fulfill their reporting
requirements and the processes in place to help ensure recipient
reporting data quality and (2) how macroeconomic data and methods, and
the recipient reports, can be used to assess the employment effects of
the Recovery Act, and the limitations of the data and methods.
To meet our objectives, we performed an initial set of edit checks and
basic analyses on the final recipient report data that first became
available at www.recovery.gov, the federal government's official Web
site on Recovery Act spending, on October 30, 2009. We calculated the
overall sum, as well as sum by states, for the number of full-time
equivalents (FTE) reported, award amount, and amount received and found
that they corresponded closely with the values shown for these data on
Recovery.gov. We built on information collected at the state, local,
and program level as part of our bimonthly reviews of selected states'
and localities' uses of Recovery Act funds. These bimonthly reviews
focus on Recovery Act implementation in 16 states and the District of
Columbia, which contain about 65 percent of the U.S. population and are
estimated to receive collectively about two-thirds of the
intergovernmental federal assistance funds available through the
Recovery Act. A detailed description of the criteria used to select the
core group of 16 states and the District is found in appendix I of our
April 2009 Recovery Act bimonthly report[Footnote 4]. Prime recipients
and delegated subrecipients[Footnote 5] had to prepare and enter their
information by October 10, 2009. The days following up to October 30,
2009, included the data review period, and as noted previously, on
October 30, 2009, the first round of recipient reported data was made
public. Over the course of three different interviews, two with prime
recipients of Recovery Act funding and one with subrecipients, we
visited the 16 selected states and the District of Columbia during late
September and October 2009. We discussed with prime recipients projects
associated with 50 percent of the total funds reimbursed, as of
September 4, 2009, for that state, in the Federal-Aid Highway Program
administered by the Department of Transportation (DOT). Prior to the
start of the reporting period on October 1, we reviewed prime
recipients' plans for the jobs data collection process. After the
October 10 data reporting period, we went back to see if prime
recipients followed their own plans and subsequently talked with at
least two vendors in each state to gauge their reactions to the
reporting process and assess the documentation they were required to
submit.
We gathered and examined issues raised by recipients in these
jurisdictions regarding reporting and data quality and interviewed
recipients on their experiences using the Web site reporting mechanism.
During the interviews, we used a series of program reviews and
semistructured interview guides that addressed state plans for
managing, tracking, and reporting on Recovery Act funds and activities.
In a similar way, we examined a nonjudgmental sample of Department of
Education (Education) Recovery Act projects at the prime and
subrecipient level. We also collected information from transit agencies
as part of our bimonthly Recovery Act reviews. In addition, we
interviewed federal agency officials who have responsibility for
ensuring a reasonable degree of quality across their program's
recipient reports. We assessed the reports from the Inspector Generals
(IG) on Recovery Act data quality review from 15 agencies. We are also
continuing to monitor and follow up on some of the major reporting
issues identified in the media and by other observers. For example, a
number of press articles have discussed concerns with the jobs
reporting done by Head Start grantees. According to a Health and Human
Services (HHS) Recovery Act official, HHS is working with the Office of
Management and Budget (OMB) to clarify the reporting policy as it
applies to Head Start grantees. We will be reviewing these efforts as
they move forward.
To address our second objective, we analyzed economic and fiscal data
using standard economic principles and reviewed the economic literature
on the effect of monetary and fiscal policies for stimulating the
economy. We also reviewed guidance that OMB developed for Recovery Act
recipients to follow in estimating the effect of funding activities on
employment, reviewed reports that the Council of Economic Advisers
(CEA) issued on the macroeconomic effects of the Recovery Act, and
interviewed officials from the CEA, OMB, and the Congressional Budget
Office (CBO).
We conducted this performance audit with field work beginning in late
September 2009 and began analysis of the recipient data that became
available on October 30, 2009, in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
Background:
In December 2007, the United States entered what has turned out to be
its deepest recession since the end of World War II. Between the fourth
quarter of 2007 and the third quarter of 2009, gross domestic product
(GDP) fell by about 2.8 percent, or $377 billion. The unemployment rate
rose from 4.9 percent in 2007 to 10.2 percent in October 2009, a level
not seen since April 1983. The CBO projects that the unemployment rate
will remain above 9 percent through 2011.
Confronted with unprecedented weakness in the financial sector and the
overall economy, the federal government and the Federal Reserve
together acted to moderate the downturn and restore economic growth.
The Federal Reserve used monetary policy to respond to the recession by
pursuing one of the most significant interest rate reductions in U.S.
history. In concert with the Department of the Treasury, it went on to
bolster the supply of credit in the economy through measures that
provide Federal Reserve backing for a wide variety of loan types, from
mortgages to automobile loans to small business loans. The federal
government also used fiscal policy to confront the effects of the
recession. Existing fiscal stabilizers, such as unemployment insurance
and progressive aspects of the tax code, kicked in automatically in
order to ease the pressure on household income as economic conditions
deteriorated. In addition, Congress enacted a temporary tax cut in the
first half of 2008 to buoy incomes and spending[Footnote 6] and created
the Troubled Asset Relief Program[Footnote 7] in the second half of
2008 to give Treasury authority to act to restore financial market
functioning.[Footnote 8]
The federal government's largest response to the recession to date came
in early 2009 with the passage of the Recovery Act, the broad purpose
of which is to stimulate the economy's overall demand for goods and
services, or aggregate demand. The Recovery Act is specifically
intended to preserve and create jobs and promote economic recovery; to
assist those most impacted by the recession; to provide investments
needed to increase economic efficiency by spurring technological
advances in health and science; to invest in transportation,
environmental protection, and other infrastructure that will provide
long-term economic benefits; and to stabilize the budgets of state and
local governments.[Footnote 9] The CBO estimates that the net cost of
the Recovery Act will total approximately $787 billion from 2009 to
2019.
The Recovery Act uses a combination of tax relief and government
spending to accomplish its goals. The Recovery Act's tax cuts include
reductions to individuals' taxes, payments to individuals in lieu of
reductions to their taxes, adjustments to the Alternative Minimum Tax,
and business tax incentives. Tax cuts encompass approximately one-third
of the Recovery Act's dollars. Recovery Act spending includes temporary
increases in entitlement programs to aid people directly affected by
the recession and provide some fiscal relief to states; this also
accounts for about one third of the Recovery Act. For example, the
Recovery Act temporarily increased and extended unemployment benefits,
temporarily increased the rate at which the federal government matched
states Medicaid expenditures, and provided additional funds for the
Supplemental Nutrition Assistance and the Temporary Aid to Needy
Families programs, among other things. Other spending, also accounting
for about a third of the act falls into the category of grants, loans,
and contracts. This includes government purchases of goods and
services, grants to states through programs such as the State Fiscal
Stabilization Fund for education and other government services, and
government investment in infrastructure, health information technology,
renewable energy research, and other areas.
In interpreting recipient reporting data, it is important to recognize
that the recipient reporting requirement only covers a defined subset
of the Recovery Act's funding. The reporting requirements apply only to
nonfederal recipients of funding, including all entities receiving
Recovery Act funds directly from the federal government such as state
and local governments, private companies, educational institutions,
nonprofits, and other private organizations. OMB guidance, consistent
with the statutory language in the Recovery Act, states that these
reporting requirements apply to recipients who receive funding through
the Recovery Act's discretionary appropriations, not recipients
receiving funds through entitlement programs, such as Medicaid, or tax
programs. Recipient reporting also does not apply to individuals. In
addition, the required reports cover only direct jobs created or
retained as a result of Recovery Act funding; they do not include the
employment impact on materials suppliers (indirect jobs) or on the
local community (induced jobs). Figure 1 shows the division of total
Recovery Act funds and their potential employment effects.
Figure 1: The Potential Employment Effects of Recovery Act Funds:
[Refer to PDF for image: pie-chart and illustration]
Total Recovery Act funds (in billions):
Entitlements: $224;
Tax relief: $288;
Contracts, grants, and loans: $275;
Total: $787.
Potential employment effects of Recovery Act contracts, grants and
loans:
Contracts, grants, and loans (concentric circles):
Indirect (small circle): Tax relief employment effect;
Indirect (large circle): Entitlements employment effect;
Direct (smallest circle): Recipient reporting coverage.
Source: GAO.
Note: The potential employment effects of the different types of
Recovery Act funds are based on historical data and are reflected in
the size of the circles.
[End of figure]
Tracing the effects of the Recovery Act through the economy is a
complicated task. Prospectively, before the act's passage or before
funds are spent, the effects can only be projected using economic
models that represent the behavior of governments, firms, and
households. While funds are being spent, some effects can be observed
but often relevant data on key relationships and indicators in the
economy are available only with a lag, thereby complicating real-time
assessments. When a full range of data on outcomes becomes available,
economic analysts undertake retrospective analyses, where the findings
are often used to guide future policy choices and to anticipate effects
of similar future policies. Stimulus spending under the broad scope of
the Recovery Act will reverberate at the national, regional, state, and
local levels. Models of the national economy provide the most
comprehensive view of policy effects, but they do not provide insight,
except indirectly, about events at smaller geographical scales. The
diversity and complexity of the components of the national economy are
not fully captured by any set of existing economic models. Some
perspective can be gained by contemporaneous close observation of the
actions of governments, firms, and households, but a complete and
accurate picture of the Recovery Act's impact will emerge only slowly.
Section 1512 of the Recovery Act requires recipients of recovery funds
to report on those funds each calendar quarter. These recipient reports
are to be filed for any quarter in which a recipient receives Recovery
Act funds directly from the federal government. The recipient reporting
requirement covers all funds made available by appropriations in
division A of the Recovery Act. The reports are to be submitted no
later than 10 days after the end of each calendar quarter in which the
recipient received Recovery Act funds. Each report is to include the
total amount of Recovery Act funds received, the amount of funds
expended or obligated to projects or activities, and a detailed list of
those projects or activities. For each project or activity, the
detailed list must include its name and a description, an evaluation of
its completion status, and an estimate of the number of jobs created or
the number of jobs retained by that project or activity. Certain
additional information is also required for infrastructure investments
made by state and local governments. Also, the recipient reports must
include detailed information on any subcontracts or subgrants as
required by the Federal Funding Accountability and Transparency Act of
2006.[Footnote 10] Section 1512(e) of the Recovery Act requires GAO and
CBO to comment on the estimates of jobs created or retained reported by
recipients.
In its guidance to recipients for estimating employment effects, OMB
instructed recipients to report only the direct employment effects as
"jobs created or retained" as a single number.[Footnote 11] Recipients
are not expected to report on the employment impact on materials
suppliers (indirect jobs) or on the local community (induced jobs).
According to the guidance, "A job created is a new position created and
filled or an existing unfilled position that is filled as a result of
the Recovery Act; a job retained is an existing position that would not
have been continued to be filled were it not for Recovery Act funding.
Only compensated employment... should be reported. The estimate of the
number of jobs... should be expressed as 'full-time equivalents (FTE),'
which is calculated as total hours worked in jobs created or retained
divided by the number of hours in a full-time schedule, as defined by
the recipient." Consequently, the recipients are expected to report the
amount of labor hired or not fired as result of having received
Recovery Act funds. It should be noted that one FTE does not
necessarily equate to the job of one person. Firms may choose to
increase the hours of existing employees, for example, which can
certainly be said to increase employment but not necessarily be an
additional job in the sense of adding a person to the payroll.
To implement the recipient reporting data requirements, OMB has worked
with the Recovery Accountability and Transparency Board (Recovery
Board)[Footnote 12] to deploy a nationwide data collection system at
[hyperlink, http://www.federalreporting.gov] (Federalreporting.gov),
while the data reported by recipients are available to the public for
viewing and downloading on [hyperlink, http://www.recovery.gov
(Recovery.gov). Recovery.gov, a site designed to provide transparency
of information related to spending on Recovery Act programs, is the
official source of information related to the Recovery Act. The
Recovery Board's goals for the Recovery Act Web site include promoting
accountability by providing a platform to analyze Recovery Act data and
serving as a means of tracking fraud, waste, and abuse allegations by
providing the public with accurate, user-friendly information. In
addition, the site promotes official data in public debate, assists in
providing fair and open access to Recovery Act opportunities, and
promotes an understanding of the local impact of Recovery Act funding.
In an effort to address the level of risk in recipient reporting, OMB's
June 22, 2009, guidance[Footnote 13] on recipient reporting includes a
requirement for data quality reviews. OMB's data quality guidance is
intended to address two key data problems--material omissions and
significant reporting errors. Material omissions and significant
reporting errors are risks that the information is incomplete and
inaccurate.[Footnote 14] As shown in figure 2, OMB gave specific time
frames for reporting that allow prime recipients and delegated
subrecipients to prepare and enter their information on days 1 through
10 following the end of the quarter. During days 11 through 21, prime
recipients will be able to review the data to ensure that complete and
accurate reporting information is provided prior to a federal agency
review and comment period beginning on the 22nd day. During days 22 to
29 following the end of the quarter, federal agencies will perform data
quality reviews and will notify the recipients and delegated
subrecipients of any data anomalies or questions. The original
submitter must complete data corrections no later than the 29th day
following the end of the quarter. Prime recipients have the ultimate
responsibility for data quality checks and the final submission of the
data. Since this is a cumulative reporting process, additional
corrections can take place on a quarterly basis.
Figure 2: Recipient Reporting Time Frame:
[Refer to PDF for image: illustration]
No less than 35 days prior to the end of the quarter:
* Prime and subrecipient registration.
1-10 days after end of quarter (Recipient report adjustments possible):
* Prime recipients and delegated subrecipients enter draft reporting
data;
* Initial submission.
11-21 days after end of quarter (Recipient report adjustments possible)
(Agency "view only"):
* Prime recipients review data submitted by subrecipients;
* Prime recipients and subrecipients make corrections.
22-29 days after end of quarter (Recipient report adjustments possible)
(Agency comment period):
* Agency review of data submitted;
* Prime recipients and subrecipients make corrections.
30 days after end of quarter:
* Recipients reports published on Recovery.gov.
90 days after end of quarter:
* Next quarterly reporting cycle begins”updates reflected cumulatively.
Source: OMB.
[End of figure]
OMB guidance does not explicitly mandate a methodology for conducting
data quality reviews at the prime and delegated subrecipient level or
by the federal agencies. Instead, the June 22, 2009, guidance provides
the relevant party conducting the data quality review with discretion
in determining the optimal method for detecting and correcting material
omissions or significant reporting errors. The guidance says that, at a
minimum, federal agencies, recipients, and subrecipients should
establish internal controls to ensure data quality, completeness,
accuracy, and timely reporting of all amounts funded by the Recovery
Act.
The Recovery Board published the results of the first round of
recipient reporting on Recovery.gov on October 30, 2009. According to
the Web site, recipients submitted 130,362 reports indicating that
640,329 "jobs" were created or saved as a direct result of the Recovery
Act. These data solely reflect the direct FTEs reported by recipients
of Recovery Act grants, contracts, and loans for the period beginning
when the act was signed into law on February 17, 2009 through September
30, 2009. As shown in figure 3, grants, contracts, and loans account
for about 27 percent, or $47 billion, of the approximately $173 billion
in Recovery Act funds paid out as of September 30, 2009.
Figure 3: Distribution of Recovery Act Funds through the End of Fiscal
Year 2009:
[Refer to PDF for image: pie-chart]
Entitlements ($63.7 billion): 37%;
Tax relief ($62.5 billion): 36%;
Contracts, grants, and loans ($47 billion): 27%;
Total: $173 billion.
Source: Recovery.gov.
[End of figure]
Recipients in all 50 states reported jobs created or retained with
Recovery Act funding provided through a wide range of federal programs
and agencies. Table 1 shows the distribution of jobs created or
retained across the nation as reported by recipients on Recovery.gov.
Not surprisingly, California, the most populous state, received the
most Recovery Act dollars and accounted for the largest number of the
reported jobs created or retained.
Table 1: Jobs Created or Retained by States as Reported by Recipients
of Recovery Act Funding:
Rank: 1;
State: California;
Jobs: 110,185.
Rank: 2;
State: New York;
Jobs: 40,620v
Rank: 3;
State: Washington;
Jobs: 34,517.
Rank: 4;
State: Florida;
Jobs: 29,321v
Rank: 5;
State: North Carolina;
Jobs: 28,073.
Rank: 6;
State: Georgia;
Jobs: 24,681.
Rank: 7;
State: Illinois;
Jobs: 24,448.
Rank: 8;
State: New Jersey;
Jobs: 24,109.
Rank: 9;
State: Michigan;
Jobs: 22,514.
Rank: 10;
State: Texas;
Jobs: 19,572.
Rank: 11;
State: Indiana;
Jobs: 18,876.
Rank: 12;
State: Puerto Rico;
Jobs: 17,597.
Rank: 13;
State: Ohio;
Jobs: 17,095.
Rank: 14;
State: Missouri;
Jobs: 15,149.
Rank: 15;
State: Minnesota;
Jobs: 14,315.
Rank: 16;
State: Massachusetts;
Jobs: 12,374.
Rank: 17;
State: Arizona;
Jobs: 12,283.
Rank: 18;
State: Wisconsin;
Jobs: 10,073.
Rank: 19;
State: Oregon;
Jobs: 9,653.
Rank: 20;
State: Tennessee;
Jobs: 9,548.
Rank: 21;
State: Louisiana;
Jobs: 9,136.
Rank: 22;
State: Oklahoma;
Jobs: 8,747.
Rank: 23;
State: Virginia;
Jobs: 8,617.
Rank: 24;
State: South Carolina;
Jobs: 8,147.
Rank: 25;
State: Colorado;
Jobs: 8,094.
Rank: 26;
State: Connecticut;
Jobs: 7,551v
Rank: 27;
State: Pennsylvania;
Jobs: 7,427.
Rank: 28;
State: Maryland;
Jobs: 6,748.
Rank: 29;
State: Utah;
Jobs: 6,598.
Rank: 30;
State: Montana;
Jobs: 6,427v
Rank: 31;
State: Kansas;
Jobs: 5,935.
Rank: 32;
State: Nevada;
Jobs: 5,667.
Rank: 33;
State: Iowa;
Jobs: 5,323.
Rank: 34;
State: New Mexico;
Jobs: 5,230.
Rank: 35;
State: Alabama;
Jobs: 4,884.
Rank: 36;
State: Kentucky;
Jobs: 4,202.
Rank: 37;
State: Arkansas;
Jobs: 3,742.
Rank: 38;
State: New Hampshire;
Jobs: 3,528.
Rank: 39;
State: Mississippi;
Jobs: 3,433.
Rank: 40;
State: Nebraska;
Jobs: 2,840.
Rank: 41;
State: West Virginia;
Jobs: 2,409.
Rank: 42;
State: Alaska;
Jobs: 2,315.
Rank: 43;
State: District of Columbia;
Jobs: 2,274.
Rank: 44;
State: South Dakota;
Jobs: 2,198.
Rank: 45;
State: Idaho;
Jobs: 2,103.
Rank: 46;
State: Vermont;
Jobs: 2,030.
Rank: 47;
State: Rhode Island;
Jobs: 2,012.
Rank: 48;
State: Maine;
Jobs: 1,613.
Rank: 49;
State: Hawaii;
Jobs: 1,545.
Rank: 50;
State: North Dakota;
Jobs: 1,293.
Rank: 51;
State: Delaware;
Jobs: 1,170.
Rank: 52;
State: Wyoming;
Jobs: 860.
State: Other;
Jobs: 1,232.
State: Total;
Jobs: 640,329.
Source: Recovery.gov.
Notes:
Includes the District of Columbia and Puerto Rico.
"Other" includes all other U.S. territories and data that could not be
assigned to a specific state.
Total may not add due to rounding.
[End of table]
Table 2 shows the number and share of jobs created or retained by
federal program agencies as reported by recipients of Recovery Act
funding. The Department of Education accounted for nearly 400,000 or
close to two-thirds of the reported jobs created or retained. According
to the Department of Education, this represents about 325,000 education
jobs such as teachers, principals, and support staff in elementary and
secondary schools, and educational, administrative, and support
personnel in institutions of higher education funded primarily through
the State Fiscal Stabilization Fund (SFSF).[Footnote 15] In addition,
approximately 73,000 other jobs (including both education and
noneducation positions) were reported saved or created from the SFSF
Government Services Fund, the Federal Work Study Program, and Impact
Aid funds.
Table 2: Jobs Created or Retained by Federal Program Agency as Reported
by Recipients of Recovery Act Funding:
Department/agency: Education;
Jobs: 398,006;
Percent of total: 62.2.
Department/agency: Labor;
Jobs: 76,223;
Percent of total: 11.9.
Department/agency: Transportation;
Jobs: 46,593;
Percent of total: 7.3.
Department/agency: Health and Human Services;
Jobs: 28,616;
Percent of total: 4.5.
Department/agency: Housing and Urban Development;
Jobs: 28,559;
Percent of total: 4.5.
Department/agency: Defense;
Jobs: 11,239;
Percent of total: 1.8.
Department/agency: Energy;
Jobs: 10,021;
Percent of total: 1.6.
Department/agency: Agriculture;
Jobs: 6,273;
Percent of total: 1.0.
Department/agency: Justice;
Jobs: 5,575;
Percent of total: 0.9.
Department/agency: Corps of Engineers;
Jobs: 4,354;
Percent of total: 0.7.
Department/agency: Environmental Protection Agency;
Jobs: 4,191;
Percent of total: 0.7.
Department/agency: National Science Foundation;
Jobs: 2,510;
Percent of total: 0.4.
Department/agency: Federal Communications Commission;
Jobs: 1,929;
Percent of total: 0.3.
Department/agency: Interior;
Jobs: 1,780;
Percent of total: 0.3.
Department/agency: Treasury;
Jobs: 1,454;
Percent of total: 0.2.
Department/agency: Homeland Security;
Jobs: 1,305;
Percent of total: 0.2.
Department/agency: All others;
Jobs: 11,701;
Percent of total: 1.8.
Department/agency: Total;
Jobs: 640,329;
Percent of total: 100.0.
Source: Recovery.gov.
Note: Totals may not add due to rounding.
[End of table]
Recipients of Recovery Act Funds We Contacted Appear to Have Made Good
Faith Efforts to Ensure Complete and Accurate Reporting, but It Will
Take Time to Improve Data Quality:
While recipients GAO contacted appear to have made good faith efforts
to ensure complete and accurate reporting, GAO's fieldwork and initial
review and analysis of recipient data from www.recovery.gov, indicate
that there are a range of significant reporting and quality issues that
need to be addressed. Collecting information from such a large and
varied number of entities in a compressed time frame, as required by
the Recovery Act, is a huge task. Major challenges associated with the
new Recovery Act reporting requirements included educating recipients
about the reporting requirements and developing the systems and
infrastructure for collecting and reporting the required information.
While recipients in the states we reviewed generally made good faith
efforts to report accurately, there is evidence, including numerous
media accounts, that the data reporting has been somewhat inconsistent.
Even recipients of similar types of funds appear to have interpreted
the reporting guidance in somewhat different ways and took different
approaches in how they developed their jobs data. The extent to which
these reporting issues affect overall data quality is uncertain at this
point. As existing recipients become more familiar with the reporting
system and requirements, these issues may become less significant
although communication and training efforts will need to be maintained
and in some cases expanded as new recipients of Recovery Act funding
enter the system. Because this effort will be an ongoing process of
cumulative reporting, our first review represents a snapshot in time.
Initial Observations on Recipient Reporting Data Identify Areas Where
Further Review and Guidance Are Needed:
We performed an initial set of edit checks and basic analyses on the
recipient report data available for download from Recovery.gov on
October 30, 2009. Based on that initial review work, we identified
recipient report records that showed certain data values or patterns in
the data that were either erroneous or merit further review due to an
unexpected or atypical data value or relationship between data values.
For the most part, the number of records identified by our edit checks
was relatively small compared to the 56,986 prime recipient report
records included in our review.
As part of our review, we examined the relationship between recipient
reports showing the presence or absence of any FTE counts with the
presence or absence of funding amounts shown in either or both data
fields for amount of Recovery Act funds received and amount of Recovery
Act funds expended. Forty four percent of the prime recipient reports
showed an FTE value. As shown in table 3, we identified 3,978 prime
recipient reports where FTEs were reported but no dollar amount was
reported in the data fields for amount of Recovery Act funds received
and amount of Recovery Act funds expended. These records account for
58,386 of the total 640,329 FTEs reported.
Table 3: Count of Prime Recipient Reports by Presence or Absence of
FTEs and Recovery Act Funds Received or Expended:
Recovery Act funds: Received or expended funds reported[A];
Reports with FTEs: 21,280; (84%);
Reports without FTEs: 9,247; (29%).
Recovery Act funds: No received or expended funds reported;
Reports with FTEs: 3,978; (16%);
Reports without FTEs: 22,481; (71%).
Recovery Act funds: Total;
Reports with FTEs: 25,258; (100%);
Reports without FTEs: 31,728; (100%).
Source: GAO analysis of Recovery.gov data.
[A] Prime recipient reports showing a non zero dollar amount in either
or both Recovery Act funds received or expended data fields.
[End of table]
As might be expected, 71 percent of those prime recipient reports shown
in table 3 that did not show any FTEs also showed no dollar amount in
the data fields for amount of Recovery Act funds received and amount
expended. There were also 9,247 reports that showed no FTEs but did
show some funding amount in either or both of the funds received or
expended data fields. The total value of funds reported in the
expenditure field on these reports was $965 million. Those recipient
reports showing FTEs but no funds and funds but no FTEs constitute a
set of records that merit closer examination to understand the basis
for these patterns of reporting.
Ten recipient reports accounted for close to 30 percent of the total
FTEs reported. All 10 reports were grants and the majority of those
reports described funding support for education-sector related
positions. For reports containing FTEs, we performed a limited,
automated scan of the job creation field of the report, which is to
contain a narrative description of jobs created or retained. We
identified 261 records where there was only a brief description in this
job creation field and that brief text showed such words or phrases as
"none," "N/A," zero, or variants thereof. For most of these records,
the value of FTEs reported is small, but there are 10 of these records
with each reporting 50 or more FTEs. The total number of FTEs reported
for all 261 records is 1,776. While our scan could only identify
limited instances of apparently contradictory information between the
job description and the presence of an FTE number, we suspect that a
closer and more extensive review of the job description field in
relation to the count of FTEs would yield additional instances where
there were problems, and greater attention to this relationship would
improve data quality.
In our other analyses of the data fields showing Recovery Act funds, we
identified 132 records where the award amount was zero or less than
$10. There were also 133 records where the amount reported as received
exceeded the reported award amount by more than $10. On 17 of these
records, the difference between the smaller amount awarded and the
larger reported amount received exceeded $1 million. While there may be
a reason for this particular relationship between the reported award
amount and amount received, it may also indicate an improper keying of
data or an interpretation of what amounts are to be reported in which
fields that is not in accordance with the guidance.
We calculated the overall sum and sum by states for number of FTEs
reported, award amount, and amount received. We found that they
corresponded closely with the values shown for these data on
Recovery.gov. Some of the data fields we examined with known values
such as the Treasury Account Symbol (TAS) codes and Catalog of Federal
Domestic Assistance (CFDA) numbers[Footnote 16] showed no invalid
values on recipient reports. However, our analyses show that there is
reason to be concerned that the values shown for these data fields in
conjunction with the data field identifying who the funding or awarding
agency is may not be congruent. Both TAS and CFDA values are linked to
specific agencies and their programs. We matched the reported agency
codes against the reported TAS and CFDA codes. We identified 454
reports as having a mismatch on the CFDA number--therefore, the CFDA
number shown on the report did not match the CFDA number associated
with either the funding or awarding agency shown on the report. On TAS
codes, we identified 595 reports where there was no TAS match. Included
in the mismatches were 76 recipient reports where GAO was erroneously
identified as either the funding or awarding agency. In many instances,
review of these records and their TAS or CFDA values along with other
descriptive information from the recipient report indicated the likely
funding or awarding agencies. These mismatches suggest that either the
identification of the agency or the TAS and CFDA codes are in error on
the recipient report.
Another potential problem area we identified was the provision of data
on the number and total amount of small subawards of less than $25,000.
There are data fields that collect information on small subawards,
small subawards to individuals, and small subawards to vendors. There
were 380 prime recipient report records where we observed the same
values being reported in both small subawards and small subawards to
individuals. We also identified 1,772 other records where it could be
clearly established that these values were being reported separately.
While we are able to establish that these data are not being
consistently reported, it is not possible to assess from the data alone
the full extent to which subaward data are being combined or reported
separately across all recipient reports. Additionally, we noted 152
reports where, in either the subawards or subawards to individuals data
fields, the value for the number of subawards and the total dollar
value of subawards were exactly the same and, as such, most likely
erroneous.
While most recipient report records were not identified as potential
problems in these initial edit checks and analyses thus far, our
results do indicate the need for further data quality efforts.
Various Interpretations of How to Report FTEs Produced Questionable
Data on Jobs Created or Retained:
Under OMB guidance, jobs created or retained were to be expressed as
FTEs. We found that data were reported inconsistently even though
significant guidance and training was provided by OMB and federal
agencies. While FTEs should allow for the aggregation of different
types of jobs--part-time, full-time or temporary--differing
interpretations of the FTE guidance compromise the ability to aggregate
the data.
In addition to issuing guidance, OMB and federal agencies provided
several types of clarifying information to recipients as well as
opportunities to interact and ask questions or receive help with the
reporting process. These included weekly phone calls between OMB and
groups representing the state budget and comptrollers offices, weekly
calls between all state reporting leads, webinars, a call center, and e-
mail outreach. State officials reported they took advantage of and
appreciated this outreach. For example, Ohio state officials said they
were generally satisfied with the technical assistance and guidance
provided by OMB--specifically, the assistance it received from the
Federalreporting.gov help desk staff. OMB estimated that it had a
better than 90 percent response rate for recipient reporting and said
that they answered over 3,500 questions related to recipient reporting.
The data element on jobs created or retained expressed in FTEs raised
questions and concerns for some recipients. OMB staff reported that
questions on FTEs dominated the types of questions they fielded during
the first round of recipient reporting. Although the recipient reports
provide a detailed account of individual projects, as Recovery.gov
shows, these projects represent different types of activities and start
and end at various points throughout the year, and recipients had
various understandings of how to report an FTE. In section 5.2 of the
June 22 guidance, OMB states that "the estimate of the number of jobs
required by the Recovery Act should be expressed as 'full-time
equivalents' (FTE), which is calculated as the total hours worked in
jobs retained divided by the number of hours in a full time schedule,
as defined by the recipient." Further, "the FTE estimates must be
reported cumulatively each calendar quarter." In section 5.3, OMB
states that "reporting is cumulative across the project lifecycle, and
will not reset at the beginning of each calendar or fiscal year."
FTE calculations varied depending on the period of performance the
recipient reported on. For example, in the case of federal highways
projects, some have been ongoing for six months, while others started
in September 2009. In attempting to address the unique nature of each
project, DOT's Federal Highway Administration (FHWA) faced the issue of
whether to report FTE data based on the length of time to complete the
entire project (project period of performance) versus a standard period
of performance such as a calendar quarter across all projects.
According to FHWA guidance, which was permitted by OMB, FTEs reported
for each highway project are expressed as an average monthly FTE. This
means that for a project that started on July 1, 2009, the prime
recipient would add up the hours worked on that project in the months
of July, August, and September and divide that number by [(3/12 x 2,080
hours)]. For a project that started on August 1, 2009, the prime
recipient should add up the hours worked on that project in the months
of August and September and divide that number by [(2/12 x 2,080
hours)]. For a project that started on September, 1, 2009, the prime
recipient should add up the hours worked on that project in the month
of September and divide that number by [(1/12 x 2,080 hours)]. The
issue of a standard performance period is magnified when looking across
programs and across states. To consistently compare FTEs, or any type
of fraction, across projects, one must use a common denominator.
Comparison of FTE calculations across projects poses challenges when
the projects have used different time periods as denominators. Tables 4
and 5 below provide more detail on the problems created by not having a
standard performance period for calculating FTEs.
Table 4 is an application of the FHWA guidance for three projects with
varying start dates. This example illustrates the way FHWA applied the
OMB guidance and that the way FTEs are aggregated in
Federalreporting.gov could overstate the employment effects. In this
example, because the 30 monthly FTE data were aggregated without
standardizing for the quarter, FTEs would be overstated by 10 relative
to the OMB guidance. A standardized quarterly measure and job-years are
included as examples of a standard period of performance. A job-year is
simply one job for 1 year. Regardless of when the project begins, the
total hours worked is divided by a full years worth of time (12
months), which would enable aggregation of employment effects across
programs and time.
Table 4: Aggregation of FHWA FTE Data:
Start date:
Project A: July 1;
Project B: August 1;
Project C: September 1.
Full-time employees:
Project A: 10;
Project B: 10;
Project C: 10.
Duration of project as of September 30:
Project A: 3 months;
Project B: 2 months;
Project C: 1 month.
Average monthly FTE per FHWA:
Project A: 10;
Project B: 10;
Project C: 10.
Cumulative FTE per OMB guidance:
Project A: 10;
Project B: 6.67;
Project C: 3.33.
FTE standardized on a quarterly basis:
Project A: 10;
Project B: 6.67;
Project C: 3.33.
Job-years:
Project A: 2.5;
Project B: 1.67;
Project C: 0.83.
Source: GAO analysis of FHWA FTE data.
Notes:
Total FTE as calculated by FHWA and aggregated on Federalreporting.gov
= 30.
Total cumulative FTE per OMB guidance = 20.
Total FTE on a standardized quarterly basis = 20.
Total job-years = 5 (standardized FTE).
[End of table]
Table 5 is an application of the OMB guidance for two projects with
varying start dates. In this example, the OMB guidance understates the
employment effect relative to the standardized measure. Cumulative FTE
per OMB guidance would result in 20 FTE compared with 30 FTE when
standardized on a quarterly basis. Both a standardized quarterly FTE
measure and a job-year measure are included as examples of a standard
period of performance. Regardless of when the project begins, the total
hours worked is divided by a full year's worth of time (12 months),
which would enable aggregation of employment effects across programs
and time.
Table 5: OMB's Cumulative FTE versus a Standardized Measure:
Start date:
Project X: July 1;
Project Y: October 1.
Full-time employees:
Project X: 10;
Project Y: 10.
Duration of project as of December 30:
Project X: 6 months;
Project Y: 3 months.
Cumulative FTE per OMB guidance:
Project X: 10;
Project Y: 10.
FTE standardized on a quarterly basis:
Project X: 20;
Project Y: 10.
Job-years:
Project X: 5;
Project Y: 2.5.
Source: GAO analysis of OMB FTE calculation guidance.
Notes:
Total Cumulative FTE per OMB guidance = 20.
Total FTE on a standardized quarterly basis = 30.
Total job-years = 7.5 (standardized FTE).
[End of table]
There are examples from other DOT programs where the issue of a project
period of performance created significant variation in the FTE
calculation. For example, in Pennsylvania, each of four transit
entities we interviewed used a different denominator to calculate the
number of full-time equivalent jobs they reported on their recipients
reports for the period ending September 30, 2009. Southeastern
Pennsylvania Transportation Authority in Philadelphia used 1,040 hours
as its denominator, since it had projects underway in two previous
quarters. Port Authority of Allegheny County prorated the hours based
on the contractors' start date as well as to reflect that hours worked
from September were not included due to lag time in invoice processing.
Port Authority used 1,127 hours for contractors starting before April,
867 hours for contractors starting in the second quarter, and 347 hours
for contractors starting in the third quarter. Lehigh and Northampton
Transportation Authority in Allentown used 40 hours in the 1512 report
they tried to submit, but, due to some confusion about the need for
corrective action, the report was not filed. Finally, the Pennsylvania
Department of Transportation in the report for nonurbanized transit
systems used 1,248 hours, which was prorated by multiplying 8 hours per
workday times the 156 workdays between February 17 and September 30,
2009. In several other of our selected states, this variation across
transit programs' period of performance for the FTE calculation also
occurred.
The issue of variation in the period of performance used to calculate
FTEs also occurred in Education programs. Across a number of states we
reviewed, local education agencies and higher education institutions
used a different denominator to calculate the number of FTEs they
reported on their recipient reports for the period ending September 30,
2009. For example, two higher education systems in California each
calculated the FTE differently. In the case of one, officials chose to
use a two-month period as the basis for the FTE performance period. The
other chose to use a year as the basis of the FTE. The result is almost
a three-to-one difference in the number of FTEs reported for each
university system in the first reporting period. Although Education
provides alternative methods for calculating an FTE, in neither case
does the guidance explicitly state the period of performance of an FTE.
[Footnote 17]
Recipients were also confused about counting a job created or retained
even though they knew the number of hours worked that were paid for
with Recovery Act funds. For example, the Revere Housing Authority, in
administering one Recovery Act project, told us that they may have
underreported jobs data from an architectural firm providing design
services for a Recovery Act window replacement project at a public
housing complex. The employees at the architecture firm that designed
the window replacement project were employed before the firm received
the Recovery Act funded contract and will continue to be employed after
the contract has been completed, so from the Revere Housing Authority's
perspective there were no jobs created or retained. As another example,
officials from one housing agency reported the number of people, by
trade, who worked on Recovery Act related projects, but did not apply
the full-time equivalent calculation outlined by OMB in the June 22
reporting guidance. Officials from another public housing agency told
us that they based the number of jobs they reported on letters from
their contractors detailing the number of positions rather than FTEs.
OMB staff said that thinking about the jobs created or retained as
hours worked and paid for with Recovery Act funds was a useful way to
understand the FTE guidance. While OMB's guidance explains that in
applying the FTE calculation for measuring the number of jobs created
or retained recipients will need the total number of hours worked that
are funded by the Recovery Act, it could emphasize this relationship
more thoroughly throughout its guidance.
OMB's decision to convert jobs into FTEs provides a consistent lens to
view the amount of labor being funded by the Recovery Act, provided
each recipient uses a standard time frame in considering the FTE. The
current OMB guidance, however, creates a situation where, because there
is no standard starting or ending point, an FTE provides an estimate
for the life of the project. Without normalizing the FTE, aggregate
numbers should not be considered, and the issue of a standard period of
performance is magnified when looking across programs and across
states.
Technical Reporting and Processing Glitches Occurred, but Recipients
Were Able to Report:
Recipients we interviewed were able to report into and review data on
Federalreporting.gov. Particularly given the scale of the project and
how quickly it was implemented, within several months, the ability of
the reporting mechanisms to handle the volume of data from the range of
recipients represents a solid first step in the data collection and
reporting process for the fulfillment of the section 1512 mandate.
Nonetheless, there were issues associated with the functional process
of reporting. For example, state officials with decentralized reporting
structures reported problems downloading submitted information from
Recovery.gov to review top-line figures such as money spent and jobs
created or retained. The Iowa Department of Management, which did
Iowa's centralized reporting into Federalreporting.gov, said that,
overall, the system was very slow. In addition to the slowness, as the
system was processing input from Iowa's submission, every time it
encountered an error, it kicked back the whole submission--but it
showed only the one error. After fixing the one errant entry, the state
resubmitted its information, which would then be completely sent back
the next time an error was encountered. Iowa officials believe it would
have been more efficient if the system identified all errors in
submission and sent back a complete list of errors to fix. Other
recipient reporters we interviewed highlighted issues around DUNS
[Footnote 18] numbers and other key identifiers, along with the
inability to enter more than one congressional district for projects
that span multiple districts. The expectation is that many of these
entry and processing errors were captured through the review process,
but the probability that all errors were caught is low.
Generally, state officials from our 17 jurisdictions reported being
able to work through technical reporting and processing glitches. For
example, Florida officials reported that they encountered many
technical issues but were able to solve the problems by contacting the
Recovery Board. Ohio officials noted that, although they were initially
concerned, in spite of the tremendous amount of data being submitted,
Federalreporting.gov held up well. While they faced some challenges,
California officials reported that, overall, they were successful in
reporting the numbers into Federalreporting.gov. They worked with the
technical team at Federalreporting.gov and performed a test on October
1, 2009, to see if the upload of the job data was going to work. During
the October reporting time frame, New Jersey officials reported that
they generally did not experience significant recipient reporting
problems. The few reporting problems New Jersey experienced occurred in
relation to issues uploading the data onto Federalreporting.gov and
issues requiring clarifying guidance from the relevant federal agency.
Notwithstanding the concerns over the slowness of the reporting system
and error checks, Iowa officials also reported that the process worked
rather well, determining that most of their state reporting problems
seemed to stem from a few recipients not fully grasping all of the
training the state had provided and thus not knowing or having key
information like DUNS numbers and in some cases submitting erroneous
information. The state department of management plans to specifically
address the 30 or so recipients associated with these issues--just
about all of which were school districts. As a follow-up from this
first reporting cycle, several states have developed a list of lessons
learned to share with OMB and other federal agencies. An example in
appendix I illustrates problems public housing authorities had with
both the recipient reporting processing functions and the FTE
calculation.
In addition to the Federalreporting.gov Web site, the Recovery Board
used a revised Recovery.gov Web site to display reported data. The
revised site includes the ability to search spending data by state, ZIP
code, or congressional district and display the results on a map. The
Recovery Board also awarded a separate contract to support its
oversight responsibilities with the ability to analyze reported data
and identify areas of concern for further investigation. In addition,
the board plans to enhance the capabilities of Federalreporting.gov.
However, the Recovery Board does not yet use an adequate change
management process to manage system modifications. Without such a
process, the planned enhancements could become cost and schedule
prohibitive. The board has recognized this as a significant risk and
has begun development of a change management process. Finally, the
board has recognized the need to improve the efficiency of its help
desk operation to avoid dropped calls and is working on agreements to
address this risk.
Processes Are in Place at the States and Federal Agencies for Recipient
Reporting Data Quality Review:
State Level Data Quality Review:
Recipient reporting data quality is a shared responsibility, but often
state agencies have principal accountability because they are the prime
recipients. Prime recipients, as owners of the recipient reporting
data, have the principal responsibility for the quality of the data
submitted, and subrecipients delegated to report on behalf of prime
recipients share in this responsibility.[Footnote 19] In addition,
federal agencies funding Recovery Act projects and activities provide a
layer of oversight that augments recipient data quality. Oversight
authorities including OMB, the Recovery Board, and federal agency IGs
also have roles to play in ensuring recipient reported data quality,
while the general public and nongovernmental entities can help as well
by highlighting data problems for correction.
All of the jurisdictions we reviewed had data quality checks in place
for the recipient reporting data, either at the state level or a state
agency level. State agencies, as entities that receive Recovery Act
funding as federal awards in the form of grants, loans, or cooperative
agreements directly from the federal government, are often the prime
recipients of Recovery Act funding. Our work in the 16 states and the
District of Columbia showed differences in the way states as prime
recipients approach recipient reporting data quality review. Officials
from nine states reported having chosen a centralized reporting
approach meaning that state agencies submit their recipient reports to
a state central office, which then submits state agency recipient
reports to Federalreporting.gov. For example, Colorado's Department of
Transportation provided its recipient report to a central entity, the
Colorado Office of Information Technology, for submission to
Federalreporting.gov. States with centralized reporting systems
maintain that they will be able to provide more oversight of recipient
reporting with this approach. Advocates of centralized reporting also
expect that method will increase data quality, decrease omissions and
duplicate reporting, and facilitate data cleanup.
Officials from the remaining eight jurisdictions reported using a
decentralized reporting system. In these cases, the state program
office administering the funds is the entity submitting the recipient
report. In Georgia, for example, the State Department of Transportation
is responsible for both reviewing recipient report data and submitting
it to Federalreporting.gov. Illinois, as is the case for four other
decentralized states, is quasi-decentralized where the data are
centrally reviewed and reported in a decentralized manner. When the
audit office informs the Office of the Governor that its review is
complete and if the Office of the Governor is satisfied with the
results, the Illinois state reporting agency may upload agency data to
Federalreporting.gov. Appendix I provides details on California's
recipient reporting experiences.
As a centralized reporting state, Iowa officials told us that they
developed internal controls to help ensure that the data submitted to
OMB, other federal entities, and the general public, as required by
section 1512 of the Recovery Act, are accurate. Specifically, Iowa
inserted validation processes in its Recovery Act database to help
reviewers identify and correct inaccurate data. In addition, state
agency and local officials were required to certify their review and
approval of their agency's information prior to submission. Iowa state
officials told us that they are working on data quality plans to
include being able to reconcile financial information with the state's
centralized accounting system. According to Iowa officials, the number
of Recovery Act grant awards improperly submitted was relatively small.
As a decentralized reporting state, New Jersey officials reported that
a tiered approach to data quality checks was used for all Recovery Act
funding streams managed by the state. Each New Jersey state department
or entity was responsible for formulating a strategy for data quality
reviews and implementing that strategy. The New Jersey Department of
Community Affairs, for example, directed subrecipients to report data
directly into an existing departmental data collection tool modified to
encompass all of the data points required by the Recovery Act. This
system gave the Department of Community Affairs the ability to view the
data as it came in from each subrecipient. From this data collection
tool, the department uploaded prime and subrecipient data to
Federalreporting.gov. All departmental strategies were reviewed by the
New Jersey Governor's office and the New Jersey Recovery Accountability
Task Force. The Governor's office conducted a review of the reports as
they were uploaded to Federalreporting.gov on a program-by-program,
department-by-department basis to identify any outliers, material
omissions, or reporting errors that could have been overlooked by
departments.
Federal Agency Data Quality Review:
To help ensure the quality of recipient report data, the Recovery Board
encouraged each federal Office of Inspector General overseeing an
agency receiving Recovery Act funds to participate in a governmentwide
Recovery Act Reporting Data Quality Review. The Recovery Board
requested the IG community to determine the following: (1) the
existence of documentation on the agencies' processes and procedures to
perform limited data quality reviews targeted at identifying material
omissions and significant reporting errors, (2) the agencies' plans for
ensuring prime recipients report quarterly, and (3) how the agencies
intend to notify the recipient of the need to make appropriate and
timely changes. In addition, IGs reviewed whether the agency had an
adequate process in place to remediate systemic or chronic reporting
problems and if they planned to use the reported information as a
performance management and assessment tool. We reviewed the 15 IG
reports that were available as of November 12, 2009. Our review of
these reports from a range of federal agencies found that they had
drafted plans or preliminary objectives for their plans for data
quality procedures.
Published IG audits on agencies' Recovery Act data quality reviews that
we examined indicated that federal agencies were using a variety of
data quality checks, which included automated or manual data quality
checks or a combination. Computer programs drive the automated
processes by capturing records that do not align with particular
indicators determined by the agency. Agencies may use a manual process
where a designated office will investigate outliers that surface during
the automated test. For example, the automated process for Education
performs data checks to validate selected elements against data in the
department's financial systems. As part of its data quality review,
Education officials are to examine submitted reports against specific
grant programs or contract criteria to identify outliers for particular
data elements. Of the IG reports that we reviewed that mentioned
systemic or chronic problems, 9 of the 11 found that their agencies had
a process in place to address these problems. Although some of the IGs
were unable to test the implementation of their agency's procedures for
reviewing the quarterly recipient reports, based on their initial
audit, they were able to conclude that the draft plan or preliminary
objectives for data quality review were in place.
According to OMB's guidance documents, federal agencies must work with
their recipients to ensure comprehensive and accurate recipient
reporting data. A September 11, 2009, memorandum from OMB directed
federal agencies to identify Recovery Act award recipients for each
Recovery Act program they administer and conduct outreach actions to
raise awareness of registration requirements, identify actual and
potential barriers to timely registration and reporting, and provide
programmatic knowledge and expertise that the recipient may need to
register and enter data into Federalreporting.gov. Federal agencies
were also expected to provide resources to assist state and select
local governments in meeting reporting requirements required by the
Recovery Act. In addition, federal agencies were to identify key
mitigation steps to take to minimize delays in recipient registration
and reporting.
OMB also requires that federal agencies perform limited data quality
reviews of recipient data to identify material omissions and
significant reporting errors and notify the recipients of the need to
make appropriate and timely changes to erroneous reports. Federal
agencies are also to coordinate how to apply the definitions of
material omissions and significant reporting errors in given program
areas or across programs in a given agency to ensure consistency in the
manner in which data quality reviews are carried out. Although prime
recipients and federal agency reviewers are required to perform data
quality checks, none are required to certify or approve data for
publication. However, as part of their data quality review, federal
agencies must classify the submitted data as not reviewed by the
agency; reviewed by the agency with no material omissions or
significant reporting errors identified; or reviewed by the agency with
material omissions or significant reporting errors identified. If an
agency fails to choose one of the aforementioned categories, the system
will default to not reviewed by the agency.
The prime recipient report records we analyzed included data on whether
the prime recipient and the agency reviewed the record in the OMB data
quality review time frames. In addition, the report record data
included a flag as to whether a correction was initiated. A correction
could be initiated by either the prime recipient or the reviewing
agency. Table 6 shows the number and percentage of prime recipient
records that were marked as having been reviewed by either or both
parties and whether a correction was initiated. OMB's guidance provided
that, a federal agency, depending on the review approach and
methodology, could classify data as being reviewed by the agency even
if a separate and unique review of each submitted record had not
occurred.
Table 6: Prime Recipient Reports Reviews and Corrections:
Reviewed by agency: No;
Reviewed by prime recipient: No;
Correction: No;
Number of prime recipient reports: 2,959;
Percentage: 5.
Reviewed by agency: No;
Reviewed by prime recipient: No;
Correction: Yes;
Number of prime recipient reports: 8,201;
Percentage: 14.
Reviewed by agency: No;
Reviewed by prime recipient: Yes;
Correction: Yes;
Number of prime recipient reports: 1;
Percentage: 1
