In its short history, the economic stimulus program has been critiqued by Congress, the Government Accountability Office, and various watchdog groups. Now, an independent team of researchers from Harvard University has produced an assessment of the Recovery Act’s impact on government transparency. The lengthy report, done for the IBM Center for the Business of Government, contains both good and bad news for those involved in overseeing the Recovery program, including the Recovery Board.
The study is the work of Francisca M. Rojas, the research director at Harvard University’s Transparency Policy Project. The Recovery program requires recipients of $276 billion in contracts, grants, and loans to submit spending reports that are posted publicly on Recovery.gov. Rojas and her team examined that transparency effort “to understand what the disclosure of spending data accomplished, who used the available information, and how it was used.’’ The team focused on the Recovery Act’s transparency requirements at the state level, specifically Maryland, Massachusetts, Colorado, Mississippi, Texas, and Washington.
“Overall, the most significant effect of Recovery Act spending transparency,’’ the Rojas team wrote, “was an improved capacity by state officials to manage the disbursement of federal funds.’’ The team found, among other conclusions:
- State compliance with federal spending disclosures requirements was very high. States exceeded the law’s transparency requirements in building comprehensive websites to post data.
- Transparency requirements served as a deterrent, contributing to low rates of fraud, waste, and abuse of taxpayer funds.
- The quality and timeliness of transparency data improved over time.
- Spending transparency became institutionalized in some states and at the federal level. Congress and the White House both have proposed Recovery-style transparency to track spending for all federal contracts, grants, and loans.
Rojas’ team, however, pointed to one big problem—identifying how many jobs have been actually created or saved under the Recovery program. “…The rate of spending turned out to be more straightforward than tracking the number of jobs created or saved,’’ the report says. “Job metrics attributable to Recovery Act funds had to be created without the benefit of precedent—always problematic in new transparency systems.’’
The report said the initial methods used by the Office of Management and Budget to estimate jobs “made it difficult to accurately capture employment impact…’’ Early in the program, the report says, OMB changed those procedures so that jobs were estimated only on a quarterly basis, meaning that “Recovery Act-funded jobs could not be aggregated across quarters due to the risk of double counting.’’
The conclusion: “Even though employment outcomes were critical to gauging the ongoing impacts of the Recovery Act, doing so through the disclosure system was almost doomed to fail because of the complexity of measuring these effects.’’
The Recovery Board did not escape criticism. The reports notes that the issue of data quality became “a significant controversy’’ during the first reporting period after some recipients entered non-existent or otherwise wrong congressional districts in their reports. The “phantom’’ congressional district controversy became a big headache for the Board, which had posted the incorrect information from recipients on Recovery.gov. We later corrected the situation, but the Rojas team’s report says the damage was done: “This early experience with reporting errors compromised the credibility of the data,’’ the report concludes. “Unreliable data initially frustrated journalists and advocates trying to understand the impacts of Recovery Act spending.’’
Still, the report leaves no doubt that transparency in government spending was greatly improved by the Recovery program. Bottom line: “Federal transparency requirements created a ripple effect of voluntary transparency efforts….All states and many state agencies created their own websites for spending disclosure. Journalists and advocacy groups built multiple online outlets to make it easier for the public to access spending information. Further, rates of fraud, waste, and abuse of Recovery Act funds were reported to be lower than expected for federal programs.’’
– Michael Wood, Executive Director, Recovery Board
What was the government’s experience in implementing the Recovery Act?
That’s the underlying question of a study being undertaken by the federal Inspector General community on behalf of the Recovery Board over the next several months involving the $840 billion Recovery program. What mechanisms did agencies use to disburse funds? Were they effective? What obstacles did they face in implementing and administering the programs receiving Recovery money?
And what about the Inspectors General — how did they perform their oversight role? Did they develop new oversight mechanisms to counter fraud? Did they work well with the agencies they oversee?
The IGs are calling the study a “lessons learned’’ report and expect to issue their findings later this year.
The Recovery Board, consisting of 12 IGs, has been developing this idea for some time along with others in the IG community. Mary Kendall, the Acting Inspector General at the Department of the Interior, has been at the forefront in pushing this idea and is serving as the chair of the review. Along with the Interior IG’s office, we have 15 other IGs who will help gather information from their respective agencies.
Last month, I sent out letters to the agencies whose IGs are conducting the review. Here is what I told them:
“The objective of the Lessons Learned Review is to identify which actions, processes, and mechanisms have been either beneficial or posed challenges to agencies, departments, and their respective Offices of Inspectors General (OIGs) in meeting the requirements of the Recovery Act …. Each OIG will review and assess agency/departmental implementation efforts as well as the OIG’s own oversight efforts.’’
The study is designed to determine, among other things, how federal agencies communicated with recipients of Recovery funds and how they communicated instructions and new policies. We also want to know whether agencies required recipients to submit formal plans on how they might use Recovery funds. Another area of interest: How well did the agencies oversee spending by recipients?
The study also seeks to elicit feedback from agencies and Inspectors General on how well the Recovery Board and its staff did in overseeing Recovery spending.
For example: “What feedback do OIGs have regarding how the [Recovery Board] conducted oversight of Recovery Act funds? Which particular practices or examples of [Recovery Board] oversight did the OIGs find most useful? Which practices did the OIGs consider to be the least helpful to them in their own oversight of Recovery Act funds?”
Please stay tuned. You’ll hear from me again on this subject.
- Kathleen S. Tighe, Chair, Recovery Board
What federal agencies distribute Recovery money? What agencies review Recovery spending to ensure that funds aren’t misused? Every day, it seems, the Recovery Board’s communications department receives calls from news reporters and members of the public asking those fundamental questions and others.
Despite our best efforts to keep all informed, a brief tutorial about agency responsibilities under the Recovery Act, known formally as the American Recovery and Reinvestment Act of 2009, might help.
The essentials of the three-year-old program are these:
- The White House Office of Management and Budget writes the guidelines for the program, including issues relating to spending and jobs data reported by recipients of Recovery funds.
- Federal agencies, 28 of them, distribute funds for contracts, grants and loans to recipients. Some agencies also provide tax credits and entitlements.
- The Recovery Board, consisting of Inspectors General from 12 federal agencies, collects spending and jobs data from recipients of Recovery contracts, grants and loans. The information is posted each quarter on Recovery.gov. The Board also combines a sophisticated analysis center and the work of analysts to assist the IG community in preventing and detecting waste, fraud and abuse.
That’s pretty much it — and, no, the Board is not TARP, otherwise known as the Troubled Asset Relief Program. We are frequently confused with TARP, another government program established to address the economic crisis.
- Michael Wood, Executive Director, Recovery Board
The following post was written by Kathleen S. Tighe, the Chair of the Recovery Board and the Inspector General for the Department of Education
Challenges keep you on your toes. In two decades in government, I’ve had plenty of them, serving in law enforcement-related positions at the Department of Justice, the General Services Administration, the Department of Agriculture and the Department of Education.
Last month, President Obama handed me a new—and exciting—challenge: He selected me to serve as Chair of the Recovery Board, the independent agency that oversees the $840 billion economic stimulus program approved by Congress nearly three years ago. It’s a big job, something I know from personal experience as a member of the Recovery Board since April 2010.
The Recovery Act requires the Board to post detailed spending information on Recovery.gov and to provide oversight so that the funds aren’t wasted or stolen. In a nutshell, that means we need to be transparent and accountable to taxpayers.
I can assure you of my long commitment to government openness and accountability. I work for the taxpayers—not the other way around—and I wake up every morning feeling that I can make a difference. I felt that way the first day I walked into the Department of Justice in 1988 to begin serving as a trial attorney in the Fraud Section of the Commercial Litigation Branch. And I did make a difference, settling multi-million dollar cases that benefitted taxpayers.
My work as the Education IG should also give you a good idea of the way I think. From the time I first took that job 22 months ago, I have made it clear that no one—no individual, no company—is above scrutiny. Under my watch, the IG’s office has saved taxpayers millions of dollars by pursuing settlements and other actions against those who sought to defraud taxpayers.
The Recovery Board has a different oversight function. It does not conduct investigations. However, our analysts use sophisticated IT tools, housed in a facility known as the Recovery Operations Center, to pinpoint irregularities in Recovery Act contracts, grants and loans issued by federal agencies. The findings are sent to the IGs who oversee the 28 agencies that issue awards and serve as the basis for audits and investigations.
In its short history, the Board has been hailed for its commitment to accountability and transparency. Rest assured that those good government practices will be continued during my time as Chair.
Cleaning up contaminated groundwater at the Lowell, Massachusetts site of a former chemical plant has been accelerated as a result of $20 million in Recovery Act funds from the Environmental Protection Agency.
When Silresim Corporation went out of business in 1977, it left behind 30,000 decaying drums and large storage tanks filled with toxic chemicals, which leaked into the groundwater. The drums and tanks have since been removed, but state and federal officials have been working to clean up the contamination for almost 30 years.
Using advanced technology, which Recovery funds helped to buy, officials expect to remove more than 50 tons of chemicals from soil and water within nine months – a process that would normally take much longer.
Nobis Engineering, Inc., a local firm, is prime contractor for the work.
While Recovery.gov’s main mission is to display information about Recovery spending and projects, the Recovery Act requires that the site provide “to the extent practical” leads on potential jobs.
To meet this mandate, Recovery.gov has enhanced the site’s job-search capability to include three sources for possible jobs:
- Recovery award recipient websites – This search focuses specifically on jobs listed on websites of prime recipients of Recovery awards.
- State websites – Use the links to connect to your state’s website for job opportunities close to home.
- The Internet – Powered by Indeed.com, this search provides results of job listings from multiple job databases.
Keep in mind, however, that these sites are private and independent from Recovery.gov.
We also suggest looking regularly at the list of Recovery contracts because winners of federal contract awards might be hiring. In addition, take a look at USAJobs.gov for federal employment opportunities across the country, and Careeronestop.org for advice and tools, such as resume templates from the Department of Labor.
We’re always looking for more ways to provide information on job opportunities. If you have suggestions or maybe you’ve heard of Recovery projects hiring in your area, let us know.
We’ve received a substantial number of e-mails asking if there are Recovery funds available to help with mortgages, car payments, general living costs, and other personal expenses.
Unfortunately, the Recovery Act makes no provision for direct payments to individuals to cover these costs.
We suggest that you contact local government and non-government social service organizations for information on resources where help might be available.
Gordon S. Heddell was sworn in as the Inspector General for the Department of Defense on July 14, 2009, one year after being appointed as Acting Inspector General. Prior to joining the DoD IG, Mr. Heddell had served as the Inspector General at the U.S. Department of Labor since January 2001.
Mr. Heddell began his Government service in 1966 as an Army Chief Warrant Officer, Helicopter Pilot, serving in both Korea and Taiwan during the Vietnam-era conflict.
Following his military tours of duty, Mr. Heddell served for 29 years in the U.S. Secret Service, where he held various law enforcement, management, and leadership positions. He began his career with the Secret Service as a Special Agent, progressing to Assistant Special Agent-in-Charge in 1982. Between 1982 and 1985, he served as Assistant Special Agent-in-Charge in the Office of Administration, where he managed the day-to-day administrative operations of the Secret Service, nationwide.
Mr. Heddell then served for two years as Assistant to the Special Agent-in-Charge in the Washington field office where he directed investigations of threats made against the President, Vice President, and other high-ranking government officials in Washington, D.C. Between 1987 and 1989, he served as Assistant Special Agent-in-Charge in the Philadelphia field office, where he supervised complex criminal investigations relating to counterfeiting and various types of financial fraud.
From 1989 to 1991, Mr. Heddell served as Deputy Assistant Director, where he managed inspections of offices, as well as internal investigations into allegations of wrongdoing by employees, worldwide. He also served, in this capacity, for two years in the Office of Training, where he was the executive responsible for the development and execution of training programs provided to the Secret Service’s 4,800 employees.
Mr. Heddell assumed an executive position in the Vice Presidential Protective Division in 1993, as Deputy Special Agent-in-Charge. In 1995, he was promoted to Special Agent-in-Charge and served in that position until 1998. During his tenure in this division, he directed the physical protection of the Vice President and the security of the Vice President’s residence.
From 1998 until December 2000, Mr. Heddell served as Assistant Director. In this executive position, he led the Secret Service’s Inspection and Internal Affairs programs, worldwide.
In addition to dozens of outstanding performance ratings and numerous letters of commendation, Mr. Heddell was the recipient in 1997 of the prestigious Meritorious Presidential Rank Award for outstanding government service.
Mr. Heddell holds a Bachelor of Arts degree in Political Science from the University of Missouri, a Master of Arts degree in Legal Studies from the University of Illinois [formerly Sangamon State University], and was a Woodrow Wilson Public Service Fellow while at the Secret Service. He is a member of the International Association of Chiefs of Police and was the creator of the Secret Service’s mentoring program at two D.C. public schools.
The following statements are true:
The Recovery Act is not the Troubled Asset Relief Program (TARP), and is not connected to TARP.
The Recovery Board and Recovery.gov were created by the American Recovery and Reinvestment Act of 2009.
The chart below indicates the differences between the Recovery Act and TARP.
|THE AMERICAN RECOVERY AND
|TROUBLED ASSET RELIEF PROGRAM|
|Signed into law by President Obama on Feb. 17, 2009||Signed into law by President George Bush on Oct. 3, 2008|
|Congress allocated $787 Billion for the Recovery Act||Congress allocated up to $700 Billion for TARP|
|Enacted in response to Severe Economic Downturn||Enacted in response to Sub-prime Mortgage Crisis|
|Commonly Known as ARRA||Commonly Known as TARP|
|Public Understanding of Reason for Recovery Act: To Create jobs||Public’s Understanding of Reason of TARP: Bank bailout|
|Stated Purposes in the Recovery Act: Spur the economy and invest in long-term growth, and Foster unprecedented levels of accountability and transparency in government spending||Stated Purpose in TARP: Purchase toxic mortgage-related assets from financial institutions to provide stability to the banking system|
For more information on ARRA, read the Recovery Act.
For more information on TARP, visit www.financialstability.gov.
Earl E. Devaney is a veteran public official dedicated to accountability and transparency in government.
On February 23, 2009, six days after signing the American Recovery and Reinvestment Act into law, President Obama named Devaney to head the Recovery Board, which is charged with overseeing spending under the $787 billion program. In announcing Devaney’s appointment, the President said: “Earl has doggedly pursued waste, fraud and mismanagement. He has the reputation of being one of the best [Inspectors General] that we have in this town…. I can’t think of a more tenacious and efficient guardian of the hard-earned tax dollars the American people have entrusted us to wisely invest.”
President Bill Clinton appointed Devaney as the Inspector General of the Department of the Interior in 1999. During his tenure, he oversaw the public corruption investigations that led to the convictions of Washington lobbyist Jack Abramoff and Interior Deputy Secretary Steven Griles. He also presided over the oil and gas investigations that engulfed the Minerals Management Service from 2007 to 2009.
Before becoming the Inspector General of the Department of the Interior, Devaney spent eight years as the Director of the Office of Criminal Enforcement, Forensics and Training for the Environmental Protection Agency. In that job, he supervised all of EPA’s criminal investigators, the agency’s forensics laboratory, and its enforcement training institute. In 1998, he received the Meritorious Presidential Rank Award for outstanding government service.
Devaney began his federal law enforcement career with the Secret Service in 1970, following his graduation from Franklin and Marshall College. At the time of his retirement from the Secret Service in 1991, Devaney was Special Agent-in-Charge of the Fraud Division and was recognized as an international expert in white collar crime.
We’ll be posting bios for the 12 other Board members on an occasional basis.