Recovery.gov Correcting the Obvious (Mostly)

The Chairman of the Recovery And Accountability Board (RAT Board), Earl Devaney, said in his December 15 message that transparency and accountability for stimulus money has been less than desired. The accuracy of the data provided has had some flaws as well. They are implementing some fixes that will cause some people to react with a "duh."

Under "Improving data quality," the Chairman addresses the problem of a twenty-day window in which data can be corrected. Federalreporting.gov will be changed to allow corrections to data submitted on a continuing basis (starting January 30), with updates posted every two weeks. Let's see now, who thought they would get accurate data by shutting down corrections after 20 days in the first place? If that was a threat, designed to make recipients do it right the first time, I believe the powers that be overestimated some of their recipients. Maybe this will help.

Second, the system will be changed so that it checks zip codes against a database of Congressional districts. Did you realize that reporting entities had to show which Congressional districts received the money? I've never understood why the reporters had to do that. Why doesn't the system simply determine the district, rather than requiring it as input? Since the same system will be checking the input against their database, it would be simpler to just have the system make that determination and, duh, make the reporting simpler.

The system will now have internal logic checks to kick out obviously wrong data. The two examples given are when more stimulus money is reported spent than the entity received, and when projects are reported as completed when the entity has not received any ARRA funding yet. These are obvious checks that should have been built into the system, but were probably not included because of the rapidity with which the system was implemented. Going that fast, you can't think of everything, and sometimes even the obvious slips by when the work has that tight a deadline.

So improvements are on the horizon, and, even though they may seem like obvious flaws in the system, they are being corrected. Maybe it is time for reporters to complain about other quirks in the system that need repair. Any suggestions for improvements?

How ARRA Impacts Health Care IT

ARRA has provided funding to begin standardizing electronic health records for all Americans. Eventually, if you live in Hot Coffee, Mississippi, and are visiting Scranton, Pennsylvania, where you get sick and must be hospitalized, your medical records will be available to the doctors at your hospital electronically. Your care improves, because duplicate tests can be eliminated, medical errors can be reduced, and your care when you return home can be coordinated with the appropriate doctors. That's the concept.

ARRA authorizes health IT spending as $87.9 billion for Medicaid, $39 billion to extend healthcare coverage to the unemployed, $21 billion in COBRA subsidies, and $22.8 billion to expand and modernize health IT. Another $25.5 billion, more or less, is spread out for other healthcare-related spending.

Sound like Big Brother is watching you? All of your information, available for the picking. Well, Congress has increased privacy laws for personal health information (PHI). There are also civil and criminal penalties for the misuse of PHI. Maybe they can safeguard our information, maybe not. All I can say is that privacy issues held up this sort of information technology reform for years, and the safeguards in the law were apparently sufficient to overcome those concerns in Congress.

You can read more about PHI privacy here.

Question: I received a Pell grant. Do I have to do this ARRA reporting?

No. The school has to file Section 1512 reports, but you, as the recipient of the grant, do not have to file any special ARRA report on the money, even if ARRA provided the money for your grant.

Question: I received an ARRA grant. Do I have to have a separate bank account for the funds?

The American Recovery and Reinvestment Act does not require these funds to be kept in a separate account. ARRA funds must be segregated, but this can be done through your accounting system. Transactions involving ARRA funds have to be clearly identifiable as such.

Remember that your granting agency, federal or state, may impose additional restrictions on grants beyond those specifically imposed by ARRA. A grantor may require the funds to be kept in a separate bank account, but that is an agency-specific rule, and not generally applicable to all ARRA receipients.

More Stimulus Money Coming?

A new article in the Washington Post says that the Obama administration will lose $200 Billion less than expected in Troubled Asset Relief Program (TARP) funds, the funds used to bail out financial institutions. President Obama, according to the article, is expected to ask Congree to use this money for job creation.

According to the Post, "House Speaker Nancy Pelosi and other top Democrats have been drafting a jobs bill that would tap resources in the bailout program.

Among the proposals being considered are funding as much as $70 billion in new transportation and infrastructure projects, providing new tax credits aimed at encouraging small businesses to hire workers and providing additional aid to state governments to preserve public sector jobs."

This money may not have come in under ARRA, but it sure sounds like stimulus money. Sounds like they want to expand what is being done with ARRA. The next question, IF the money actually materializes, and IF Congress will go along with plans to use it this way, will Congress apply the ARRA rules to this additional money, or will they come up with some different way to regulate it? They should really think long and hard before they set up something new to do the same thing, if they want to use different rules. There is no excuse for repeating the mess that has been made of generating regulations for and reporting on the usage of ARRA funds.

Improving Compliance in Recovery Act Recipient Reporting

It appears that OMB is serious about the ARRA recipients who have still not filed their 1512 reports. Memorandum number M-10-05 was issued on November 30, 2009, and relates to "a number of recipients [who] have not filed as required by Section 1512 of the Recovery Act and OMB guidance."

Are they serious about enforcing the reporting requirements? Well, there is some serious sabre-rattling, at least. Recipients not in compliance with reporting requirements "are subject to Federal action, up to and including the termination of Federal funding or the ability to receive Federal funds in the future." Terminating their ability to receive federal funds in the future might well be a serious enough threat to get these people to submit their reports. We shall see.

The memo instructs federal departments and agencies to identify their recipients that are noncompliant, then contact these recipients and either determine why they did not comply and help them do so, or both. Then they are to assess the severity of the situation and determine what action, if any, needs to be taken. In the case of fraud, the appropriate action may be criminal in nature.

So if a recipient has not completed the required 1512 reports, the feds have been told to go after him. Sounds like the OIGs may be busy!

Recovery Act Benefits Extended

The Worker, Homeownership and Business Assistance Act of 2009 extended or expanded three provisions of ARRA: Emergency unemployment compensation, first time homebuyer credit, and business tax credits.

In states with more than 8.5% unemployment, 20 weeks of benefits were added to unemployment compensation; 14% in other states. Here is the link to find your state's unemployment office.

The deadline for buying your first home and receiving the $8,000 tax deduction has been extended to April 30, 2010. A similar credit of up to $6,500 applies to current homeowners who meet specific rules and buy new residences by April 30, 2010.

Refunds on certain taxes paid in prior years by businesses with net losses in 2008 were expanded to include businesses with net losses in 2009.

Question: Can the Bank Take NSF Fees Out of My Stimulus Check?

Yes! Once that money hits your bank account, it is fair game. The bank can take out regular fees, NSF fees, or whatever they are charging your account.

I realize that this seems counter-intuitive, considering that ARRA funds retain their character as ARRA funds throughout their use, but even ARRA money has to stop somewhere. ARRA funds retain their character from prime recipient to sub-recipient to contractor to sub-contractor, but they lose their federal status when they actually hit someone's paycheck. Stimulus money sent to individuals is the same - once it hits an individual's pocket (account, mattress, whatever), it is no longer federal money.

ARRA Jobs Number is Still Questionable.

The last sentence of my post of October 30, 2009 was: "The bottom line is this: While ARRA may be a wonderful thing, no one should take any report of jobs created or retained because of the stimulus package to be anything more than a guess."

No less a person that Earl Devaney, Chairman of the Recovery Accountability and Transparency (RAT) Board, agrees. The New York Times quoted Mr. Devaney, in testimony before Congress, as saying “I have no doubt that there’s a lot of jobs being created. I think it could be above or below 640. I think missing reports might drive the job numbers up, and I think there’s enough inaccuracies in here to question if the 640 number might go down.”

640? Remember the Obama administrations' loud trumpeting of the creation (or saving) of 640,000 jobs with the stimulus package?

Missing reports? Duh. Even Mr. Devaney admits that up to ten percent (10%) of the required reports on jobs have still not been filed. The deadline was when? October 10? I guess 90% compliance is not so bad for more than a month past the reporting deadline. Think the IRS would be so kind to any of us who reported a month late on our taxes?

Back to the numbers for a moment, GAO (according to the Times)found "that 58,386 of the jobs were being claimed by recipients who had not reported spending any money; on the other hand, recipients who had received nearly $1 billion had claimed no jobs at all." They also believe that errors in undercounting may be offset by errors in overcounting. Sounds to me like creative accounting, much like what Enron did to show its profitability. But far be it from me to insinuate that anything connected with the federal government might be less than completely honest.

Question: Do the Davis-Bacon Standards Apply to Community Action Agencies (Weatherization Assistance) ?

This was addressed by a letter from the Wage and Hour Division dated June 1, 2009 (The link on the title to this post). The short answer is "yes."

Section 1606 of ARRA applies the Davis-Bacon Act to "all laborers and mechanics employed by contractors and subcontractors on projects funded [by ARRA]." While the Department of Labor has long held that governmental entities are not "contractors" or "subcontractors" when the work is performed by the governmental entities' own employees, not-for-profit Community Action Agencies are under contract with those governmental entities for the weatherization program, not a part of the entities themselves.

Therefore, these Community Action Agencies - and contractors used by them - that are making repairs and improvements under the ARRA-funded weatherization assistance program are contractors, and thus are subject to the Davis-Bacon requirements.

Remember that some activities, such as energy audits and inspections, are not construction, and the technicians performing that sort of work are not subject to Davis-Bacon.

Tennessee's ARRA Audit Efforts

This article, hosted on the AGA (Association of Government Accountants) Weblog, is by Kathy Anderson, CGFM, assistant director for communication and coordination for the Division of State Audit, Comptroller of the Treasury, State of Tennessee.

It's a good quick read about what one state is doing to provide oversight.

Veterans Day

Today we honor all the men and women who have seved our country in the armed forces. Preservation of our freedoms is a noble cause, and I would like to extend a heart-felt thank you to all our vets. Included in that group are my brother-in-law, Chad Johnson, father (deceased), W.A. "Tex" Johnson, and father-in-law (deceased), Gilbert Metz.

Freedom is not free, and we need to all remember that freedom comes with responsibilities. We who have not fought for our freedom need to honor our vets, but also uphold that responsibility to allow others the freedoms we enjoy.

Finally, our hearts all go out to the victims and their families from Fort Hood. Our men and women in uniform are not the only ones who pay the price, because they have families and other loved ones who either deal with their loved one's wounds or loss, neither of which is easy. So thank you to the families of our service men and women, because you also are making a sacrifice.

ARRA: What recovery money is earmarked for water?

I posted an article today on Helium.com that describes the $6,000,000,000 worth of ARRA funds that have been earmarked for the EPA's water projects. Click the title to this post and check it out over there if you like.

Better Late Than Never!

Recovery.gov has a lot of interesting information posted. One tidbit concerns the amount of reporting that has been done, and how much of it was late.

As you are probably aware, the original deadline for Section 1512 reporting was October 10. The feds said that was the absolute deadline, with no exceptions except for federally-declared disasters. No extensions, no exceptions. Then the deadline was extended to the 20th, probably so that the systems involved would not crash (We had an office pool on when Recovery.gov would crash. I picked October 9.), or because someone in a position of authority realized that most reporting entities would not be ready.

So here are some numbers on reports submitted by recipients for the 1st quarterly reporting period:

All Contracts - 13,080 reports, $2,446,306,574 in total fed ARRA $ rec'd
All Grants - 142,825 reports, $34,177,542,918 in total fed ARRA $ rec'd
All Loans - 710 reports, $64,810,668.15 in total fed ARRA $ rec'd

These were listed as late - the reports were submitted after the 10th:

Late Contracts - 3948 (30%), $648,075,223.80 (26%)
Late Grants - 12,817 (9%), $3,536,965,543 (10%)
Late Loans - 238 (34%), $20,115,410.69 (31%)

While the percentages of late reports seem a bit high, training by the feds has been sorely lacking. This task has been left up to the states, some of which have worked hard and effectively to disseminate the information and provide assistance. Some may not have been as effective.

Keep in mind that these figures reflect reports filed. The biggest question in my mind is, "How much has not even been reported at all?"

IRS Information for Individuals

ARRA: It's not just for government anymore!

Actually, some of the ARRA provisions are designed to assist individuals, rather than governments and vendors. Part B programs include a variety of tax benefits that are available for individual taxpayers. The IRS has an online information center called The American Recovery and Reinvestment Act of 2009: Information Center that provides quite a bit of information, but here is a quick and dirty look at some of them (Some of which is quoted from the IRS web site):

The Making Work Pay Tax Credit means more take-home pay for many Americans. They have a withholding calculator on this site to help ensure enough is withheld from your check.

First-time homebuyers who purchase in 2009 AND close by November 30 can get a credit of up to $8,000 with no payback requirement under the First-Time Homebuyer Credit.

Taxpayers who buy certain new vehicles in 2009 (February 17 - December 31) can deduct the state and local sales taxes they paid or other taxes and fees (in states without sales tax - must be nice ;-)). Used cars do NOT qualify for this deduction.

The American Opportunity Credit expands the Hope credit program to help families and students find ways to pay higher education expenses.

Enhanced earned income tax credit and the additional child tax credit for 2009 & 2010.

Individuals may receive up to $2,400 in unemployment benefits tax free in 2009.

Social Security recipients, veterans and railroad retirees receive(d) an extra $250 in 2009. This is because of no cost of living adjustment (COLA) in 2009 - which happened because of no inflation, thus no cost of living increase.

Energy efficiency and renewable energy incentives.

The Health Coverage Tax Credit increases from 65 percent to 80 percent of qualified health insurance premiums, and more people are eligible.

There's more, so check out the IRS site if you think you might be eligible.

Question: What can I buy with ARRA money?

ARRA does not specify specific items of cost that are not allowed. Other rules or laws do, such as Circular A-87’s prohibitions against such things as purchasing alcoholic beverages or paying the expenses of fund raising activities. ARRA funds may not be spent on certain projects, which are zoos, casinos, aquariums, and swimming pools, or related projects such as buildings to house these projects or roads leading to zoos, casinos, etc.

Blog Schedule

Just FYI - My intent is to publish this blog at least twice per week. In between, I'll see about answering any questions that anyone may post. I'm here to help if you run into questions about ARRA - that's why the blog is here!

Recovery jobs

Recovery.gov has a page called "Track the Money" . You can check funds awarded, funds received, and jobs created by state, and it all looks very efficient and impressive. But how accurate is the information?

It's the best information that Recovery.gov has available.

A well-written and relevant article in the October, 2009 Governing magazine, entitled "Where Have All the Dollars Gone," starts with the premise that "Some parts of the stimulus are easy to track. Others are impossible."

Of the stimulus money that was put into state budgets in 2009, some 63% went into Medicaid. While this may have the economic recovery effect that is expected, it certainly is not the job-creation vehicle that many people envisioned. And as far as job creation goes, under ARRA, a job retained is now equal to a job created. Originally, jobs retained and jobs created were to be reported separately; now they are lumped together. Anyone familiar with the old shell game? What sort of accurate data can be expected when entities - state, local, and private - report the jobs they would have lost if not for the ARRA money added to their budgets?

Also consider this: What happens when the stimulus money is gone? If my state reports that we retained 200 teachers due to the stimulus money, what happens if the economy does not recover by the time the money runs out? What if those teachers have to be laid off in 2011, because the federal funds to pay them are gone? We all felt good about retaining 200 jobs - and reported 200 jobs retained - but projections for the 2011 state budgets do not show skyrocketing tax revenues.

Reporting jobs has at least one other fuzzy spot: contractors. ARRA requires prime recipients to report jobs created or retained, not just by themselves, but also by their contractors. Rather than forcing receipients to become auditors of their contractors, which would never work, a prime recipient is required to ask contractors for the information, which the contrators may estimate. Let's see, the accuracy of a second-hand estimate is comparable to . . . a story my 13-year old tells me he heard at school?

Accuracy of the funding information will be addressed later, but the jobs number is, in my opinion, little more than a shot in the dark. It may be accurate enough to provide some insight into a general direction, but maybe not. According to the Governing article referenced earlier, unemployment has actually increased since the passage of ARRA. So the question is really what might have happened to employment if not for ARRA. That one I'll definitely leave to the economists to debate.

The bottom line is this: While ARRA may be a wonderful thing, no one should take any report of jobs created or retained because of the stimulus package to be anything more than a guess.

OMB Guidance on reporting FHWA ARRA funds by project, not award

We all know that the 1512 reports are to be filed by award, right? Not so fast, says DOT. They want funds reported by project, not award. So what to do? An e-mail was sent out by DOT this morning to clarify the reporting. It basically says that the DOT rules are not inconsistent with OMB's guidance, so follow the DOT rules for those grants. Here is the actual language:

Subject: INFORMATION: OMB Concurrence with FHWA 1512 Guidance

Good Morning: David Winter of the US Department of Transportation has forwarded the following information concerning Federal Highway Administration grants and OMB Section 1512 guidance. The below information is from John Pasquantino of the US Office of Management and Budget and is resultant of several calls between the Secretary of the Department of Transportation and OMB. The concerns center on using the Federal-aid project as the identifier for the 1512 Award, and subsequently providing the total federal obligations and total ARRA obligations for the Award Amount and Total Federal Amount of ARRA Funds Received respectively. Questions on this matter can be addressed to David at:

David R. Winter, P.E.
Director, Office of Highway Policy Information
Federal Highway Administration
david.winter@dot.gov
(202) 366-4631

OMB has provided the following information in relation to this issue.

****************
FROM: John Pasquantino, Office of Federal Financial Management, Office of Management and Budget

OMB’s guidance broadly provides Federal agencies and recipients with a framework for meeting reporting requirements of Section 1512 of the Recovery Act. To provide more detailed application of general guidance, Federal agencies under OMB guidance are to develop and issue supplemental guidance tiered to the OMB guidance. Recipients are to look to the Federal agency supplemental guidance for additional detail and guidance on reporting for awards made through the programs administered by that Federal agency. Should questions arise regarding whether to apply the overall guidance or the Federal agency supplemental guidance, recipients should generally comport their responses with the Federal agency supplemental guidance except in cases in which the Federal agency supplemental guidance explicitly contradicts OMB guidance. In general, recipients are encouraged to work with their awarding Federal agency to address any questions regarding applicability of guidance. In this case, we have reviewed FWHA supplemental guidance and have found it to be not inconsistent with broad OMB guidance.

Hello!

Welcome to the new blog, "ARRA Help." This is NOT an "official" site to provide assistance. It is not connected either with the federal government or with my employer. I am simply an informed person who is seeking to provide information about a confusing and complicated subject, the American Recovery and Reinvestment Act of 2009. I hope this will help someone in the days to come, and please remember that everything posted here will be unofficial, so I will try to provide links to official help when possible.