Coalition for an Accountable Recovery Submits Comments on Recovery.gov Guidance Memo

On April 17, the Coalition for an Accountable Recovery (CAR) submitted its comments [1] on the Office of Management and Budget's (OMB) April 3 memo, "Updated Implementing Guidance for the American Recovery and Reinvestment Act of 2009." [2] The memo is a supplement to a previous set of guidelines [3] issued Feb. 18 to federal agencies on the implementation of the Recovery Act. CAR notes that OMB’s efforts are laudable and that the guidance is helpful in advancing transparency and accountability with regard to Recovery Act spending. However, the coalition also argues that the guidance still needs modification for meaningful transparency and accountability to be realized.

To enable the level of transparency in Recovery Act spending as described [4] by President Barack Obama when he signed the bill into law, the federal government should collect spending information, including data about who is receiving Recovery Act money, how much they are getting, and what they are doing with it; this information should be collected directly from Recovery Act funds recipients. The Recovery Act and OMB guidance, however, take a different approach to recipient reporting. Instead of a system in which all recipients (other than individuals but including states) of Recovery Act funds submit expenditure and performance reports, the model described in the act and in OMB guidance would have only those entities that receive Recovery Act funds directly from the federal government report on the use of those funds. Additionally, data from these prime recipients would be reported directly to the federal agency that disbursed the funds, with the disbursing agency making that information available on Recovery.gov. Not only would the public not be able to directly view these recipient reports, recipients of Recovery Act funds that are sub-awardees (e.g., subcontractors and sub-grantees) would not be required to report on the use of their funds. The use of tens of billions of Recovery Act dollars by thousands (perhaps tens of thousands) of Recovery Act funds recipients would be hidden from public scrutiny.

The April 3 OMB guidance would implement such a model of limited transparency, obscuring a substantial portion of Recovery Act expenditures. However, the guidance states that OMB intends to eventually improve this reporting system by requiring that expenditure reports be collected directly from all recipients, including those that receive funds from prime and sub-recipients.

[T]he current reporting model will not track funds to subsequent recipients beyond these local governments or other organizations. OMB plans to expand the reporting model in the future to also obtain this information, once the system capabilities and processes have been established.

CAR, co-chaired by OMB Watch and Good Jobs First, applauds this move to a system of multi-tier reporting but recommends that OMB not only elaborate on the details of such requirements, but also specify a date by which this will be implemented. Another improvement in the recipient reporting system is also on the horizon. In the revised guidance, OMB states that it "intends to oversee the development a central collection system" that would require recipients to report directly on the use of Recovery Act funds to the federal government. By collecting these reports directly from recipients, OMB would mitigate delays and distortions of data in the reports. And like the eventual requirement of multi-tier recipient reporting, OMB has not specified the details of such a system. CAR has recommended that OMB require all recipients of Recovery Act funds over $25,000, regardless of how many layers removed from the initial federal disbursal that receipt is, to report on their use of Recovery Act funds to the central collection system. OMB has, however, specified a date by which this system will be functional. In its April 3 guidance, OMB states that it is "moving aggressively to develop the capability to centrally collect the recipient reports due on October 10th, 2009."

Although OMB intends to make improvements in requirements of who reports and how, the April guidance neglects to move closer to CAR's vision of a spending tracking system that accounts for the use of Recovery Act funds. The guidance elaborates somewhat on how the number of jobs saved or created is to be reported, but it remains silent on requiring that other jobs data (e.g., wages paid, types of benefits, and other job quality indicators) be reported. There is also no requirement to track information about the demographics of people who are getting jobs. OMB gives significant leeway to federal agencies in establishing quantitative outputs and outcomes to measure the impact of Recovery Act projects. While CAR recognizes that the programmatic agencies are better suited than OMB to establish theses benchmarks, CAR recommends that OMB work with agencies to ensure that sufficient and relevant performance data are collected and that OMB set a short timeframe to establish which performance criteria will be collected. CAR also makes a number of other recommendations, including suggestions about contract details, weekly agency report details, and data feed specification in its comments to OMB.

In addition to noting critical gaps in recipient reporting requirements, CAR recognizes that OMB appears to moving toward a model of reporting articulated in CAR's Interim Recovery.gov Data Reporting Architecture [5]. The Obama administration has set aggressive and laudable goals for Recovery Act spending reporting and has made improvements since Recovery.gov was launched. By seeking comments from the public, OMB is engaging in an iterative design process that will result in an increasingly improved Recovery Act expenditure tracking system. While CAR recommends that OMB make a number of changes to its guidance, it also notes that OMB appears to be on the right track with this latest revision.