First Round of Recovery Act Data Expected Oct. 15

On Oct. 15, the Recovery Accountability and Transparency Board (Recovery Board) will begin releasing on Recovery.gov [1] the first round of Recovery Act recipient reporting to the public.

The reporting of this information, including spending data and jobs numbers, is the culmination of a complex process that started in February. Never before have recipients of federal spending reported on their use of the funds in such a timely or transparent manner, so the release of the data alone will mark a historic moment in bringing greater accountability to federal spending. At the same time, the data published on Recovery.gov will likely leave many transparency advocates pushing for more information accompanied by higher data quality.

The recipient reports, filed between Oct. 1 and Oct. 10 (with a ten-day grace period announced Oct. 10), will be released by the Recovery Board in two tranches: The first will cover recipient reports about federal contracts that have been received and will be released through Recovery.gov on Oct. 15; the second will cover recipient reports on federal grants and loans that have been received and will be released through Recovery.gov on Oct. 30. Between $6 billion and $12 billion, or about one to two percent of the $787 billion Recovery Act, will be reported by recipients on Oct. 15. On Oct. 30, some $204 billion in grants and loans will be reported.

The Coalition for an Accountable Recovery, which OMB Watch co-chairs with Good Jobs First, has compiled a set of charts and tables [2] that describe the dimensions of the expected data. These figures are estimates drawn from federal spending data sources USAspending.gov [3] and FPDS-NG [4], but data on how many recipients will report and the dollar amounts of awards they report will remain a mystery to the public until the data are released in the latter half of October.

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According to the reporting provisions in the law, a great deal of Recovery Act information does not have to be reported by recipients to the federal government. Most prominently, the $288 billion in personal and corporate tax cuts, such as the Making Work Pay tax cut, does not have to be reported. Similarly, recipients of the $224 billion in entitlement spending, such as the increase in Social Security spending and the unemployment insurance expansion, also do not have to report on their Recovery Act funds. Ultimately, some $512 billion of the stimulus, representing almost two-thirds of all Recovery Act spending, will not be reported by recipients at any point.

Of the remaining $275 billion, which will be distributed though contracts, grants, and loans, details will be reported by recipients. However, of that amount, only a small fraction has been distributed thus far. While agencies have allocated funding and awarded grants, contracts, and loans, states and other recipients have yet to draw down federal funding. In fact, contract spending, which is what will be reported Oct. 15, represents less than four percent of estimated Recovery Act spending to date, constituting but a sliver of all released Recovery Act funds.

Additionally, the data that will be reported Oct. 15 is not representative of the Recovery Act as a whole. Most of the contracts that are on Recovery.gov and USAspending.gov now are Energy Department (DOE) contracts, accounting for almost half of current Recovery Act contract spending to date. Most of the DOE contracts will go to facilities, such as the Hanford nuclear facility in Washington. Hanford, which received the largest set of contracts, has estimated these contracts have generated approximately 3,000 jobs related to Recovery Act cleanup along the Columbia River, accelerating demolition of the plutonium finishing plant, retrieving solid radioactive waste, and other tasks.

Because the total dollar amounts of contracts is a small fraction of the entire Recovery Act, it is expected that job counts in the reports will also represent a small fraction of the ultimate number of jobs that will be created by the stimulus.

However, there are also two other reasons why recipient report job numbers will be small in comparison to the millions of new and sustained jobs touted by the framers of the Recovery Act. First, these data will not have direct information from the ultimate recipient of Recovery Act funds. That is, only direct, or "prime," recipients will report job counts, estimating the number of jobs created by the multiple tiers of subrecipients below them. Second, these data will only cover direct jobs and omit employment created by the newly enhanced buying power of recipient employees, the so-called "multiplier effect." A parallel effort of job count estimation is being conducted by the Council of Economic Advisers, which reported in September that "slightly more than 1 million jobs" had been created directly and indirectly at the time it released its first quarterly report on the Recovery Act [6].

In September, OMB Watch highlighted potential data quality issues in Recovery Act reporting [7] and how bad data could affect the usefulness of the information. With tens of thousands of recipients reporting through a new, unfamiliar system, even a small amount of user error could result in thousands of flawed reports. Indeed, recent evidence seems to indicate that some recipients are having trouble with the first reporting deadline, as on Oct. 10, the last day for filing reports, the Recovery Board pushed the reporting deadline back by ten days to give recipients more time to collect and report their data.

Data quality will also be affected by the small window of opportunity for prime recipients and federal agencies to review and correct omissions and errors. With potentially tens of thousands of reports, it remains unlikely that federal agencies will have time to thoroughly inspect every recipient report within the 20 days allotted to them for data review. Additionally, there will be no reconciliation between recipient reports, federal agency reports, and Treasury account records, leaving what will likely be large discrepancies in different sources of spending information.

Despite these data quality issues, there remains the significant problem of the data trail disappearing after money changes hands twice. The Office of Management and Budget (OMB) requires only prime recipients and their first tier of subrecipients to report on the use of Recovery Act funds. For example, the federal Department of Transportation might grant funds to the Texas Department of Transportation. The Texas DOT could then give money to Dallas for a bridge repair project. Dallas would likely hire contractors to execute the work, but because the contractor hired by Dallas is a second-tier subrecipient, citizens and the federal government will have no information on who the contractor is or the value of the contract.

Because so little Recovery Act funding is available for reporting, the Oct. 15 publication date will likely shed little light on the how well Recovery Act funds are being spent. The public will, however, be given a window on how the recipient reports can be analyzed and obtained through the new Recovery.gov website. Even if the reporting system itself works perfectly, the dearth of data and potential quality issues may limit the significance of this first round of recipient report publishing. However, as successive reporting cycles add more and more information, and as the Recovery Board and OMB iron out difficulties with the reporting system, Recovery.gov has the potential to be a powerful instrument of federal spending transparency and accountability.