Recovery Act Implementation: A State-Local View

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recovery1A small group representing federal, state, and local governments met to discuss challenges associated with implementing the Recovery Act, largely from the perspective of states and localities.  The meeting was co-hosted by the National Academy of Public Administration and the IBM Center.

Background.  The Recovery Act injects about $280 billion into nearly 70 grant programs to states and localities. The majority of this funding is administered by 11 federal departments or agencies.   The Act includes a number of transparency and accountability provisions that include a number of reporting requirements that extend far beyond existing reporting requirements for existing grant, contract, and loan programs.  For example, it requires reporting from sub-grantees and sub-contractors on the number of jobs created.  The Act also requires its funding to be tracked separately from other funding sources, and provides $340 million in oversight monies, including the creation of a series of public websites where funding, projects, and performance information must be posted.  These efforts have led to what some fear as overly-high public expectations as to what can be expected in the first reports on the use of the funds, scheduled for October 10th.

Issues.  The group focused its discussion on three related issues:

  • Complying with the Recovery Act’s transparency, accountability, and reporting requirements
  • Finding ways to achieve measurable and lasting results with the monies spent
  • Managing conflicting expectations

Participants felt that OMB “gets it” in terms of understanding the challenge of implementing the complex reporting requirements.  OMB plans to conduct a dry run of the data collection and reporting system on July 10th in preparation for a statutorily-required first report from states and localities by October 10th.

At the onset of the conversation, it became clear that “no one has the answers” and “we’re not alone.”  They also saw these new reporting requirements as “the future.”  While the Recovery Act is temporary money, largely to be spent by the end of 2011, the new accountability and reporting system being developed to trace Recovery Act funds will likely become a permanent fixture that will be revolutionary in its impact on how government is run and how citizens interact with government.

In addition to reporting financial information, the Recovery Act also requires reporting on the progress of projects, the number of jobs created or saved, and the impact of the projects.  Federal agencies released their agency-wide and program-level spending plans yesterday.

In addition to increased reporting, the Recovery Act created a potential for a series of different expectations in what its results might be.  These tensions come from who is doing the looking and assessing.  For example, there are political tensions, tensions between different policy groups, and tensions between the approaches of different professional groups (IT, procurement, budget, finance, economists, auditors, etc.).  Somewhere in the Recovery Act ecosystem, someone needs to begin to moderate these differences (“break down the silos”), especially if this new transparency and accountability framework becomes the new way of doing business in the future.

Ideas for Going Forward.  Based on some of the insights offered, the group identified several ideas for going forward.  These included:

  • Use the July 10th Dry Run to “level expectations.”  Expectations from the public seem to be very high.  One way to begin managing expectations in terms of what the reporting system can produce is to use the opportunity of the July 10th “dry run” of the financial and performance reporting system to begin to show what might be reasonably expected when the October 10th reporting occurs. The dry run could also be used to identify best practices in data reporting.
  • Create a customer-centric, single face for reporting.  While federal agencies are meeting regularly among themselves, they aren’t necessarily synchronizing their reporting requirements from the perspective of the reporting entity.  Using the Recovery Act as a “burning platform” to force action, can the federal government work with states to come up with a “shared service” platform for financial and performance reporting/data sharing?
  • Create a common set of expectations.  Develop a shared way of seeing a problem.  While there will never be a single “right” answer, there needs to be a forum where stakeholders can communicate their perspectives and come to a shared understanding.
  • Allow different definitions of what constitutes “success.”  Right now, the key “interpreter” of success seems to be the auditors.  Allow multidisciplinary analyses of the data (e.g., universities, professional associations, as well as special interest groups).  “The more lenses, the better.”
  • Create a focal point for sharing best practices.  OMB should foster a cross-agency, and possibly cross-levels of government, communities or data to allow real-time sharing of what works and what does not.  It should then quickly disseminate best practices for replication. 

This dialogue is only one of many similar efforts underway.  In the past several weeks, I understand similar efforts were held by the Association of Government Accountants, the Annie Casey Foundation, and others.  If you attended any of those, it would be interesting to learn if there were similar themes and ideas coming out of those sessions.

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