Recovery Act:

Recipient Reported Jobs Data Provide Some Insight into Use of Recovery Act Funding, but Data Quality and Reporting Issues Need Attention

GAO-10-223: Published: Nov 19, 2009. Publicly Released: Nov 19, 2009.

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The American Recovery and Reinvestment Act of 2009 (Recovery Act) requires recipients of funding from federal agencies to report quarterly on jobs created or retained with Recovery Act funding. The first recipient reports filed in October 2009 cover activity from February through September 30, 2009. GAO is required to comment on the jobs created or retained as reported by recipients. This report addresses (1) the extent to which recipients were able to fulfill their reporting requirements and the processes in place to help ensure data quality and (2) how macroeconomic data and methods, and the recipient reports, can be used to assess the employment effects of the Recovery Act. GAO performed an initial set of basic analyses on the final recipient report data that first became available at http://www.recovery.gov on October 30, 2009; reviewed documents; interviewed relevant state and federal officials; and conducted fieldwork in selected states, focusing on a sample of highway and education projects.

On October 30, http://www.recovery.gov (the federal Web site on Recovery Act spending) reported that more than 100,000 recipients reported hundreds of thousands of jobs created or retained. Given the national scale of the recipient reporting exercise and the limited time frames in which it was implemented, the ability of the reporting mechanism to handle the volume of data from a wide variety of recipients represents a solid first step in moving toward more transparency and accountability for federal funds. Because this effort will be an ongoing process of cumulative reporting, GAO's first review represents a snapshot in time. While recipients GAO contacted appear to have made good faith efforts to ensure complete and accurate reporting, GAO's fieldwork and initial review and analysis of recipient data from http://www.recovery.gov, indicate that there are a range of significant reporting and quality issues that need to be addressed For example, GAO's review of prime recipient reports identified the following: Erroneous or questionable data entries that merit further review: (1) 3,978 reports that showed no dollar amount received or expended but included more than 50,000 jobs created or retained; (2) 9,247 reports that showed no jobs but included expended amounts approaching $1 billion, and (3) Instances of other reporting anomalies such as discrepancies between award amounts and the amounts reported as received which, although relatively small in number, indicate problematic issues in the reporting. Coverage: While OMB estimates that more than 90 percent of recipients reported, questions remain about the other 10 percent. Quality review: While less than 1 percent were marked as having undergone review by the prime recipient, over three quarters of the prime reports were marked as having undergone review by a federal agency. Full-time equivalent (FTE) calculations: Full-time equivalent (FTE) calculations: Under OMB guidance, jobs created or retained were to be expressed as FTEs. GAO found that data were reported inconsistently even though significant guidance and training was provided by OMB and federal agencies. While FTEs should allow for the aggregation of different types of jobs--part time, full time or temporary--differing interpretations of the FTE guidance compromise the ability to aggregate the data. Although there were problems of inconsistent interpretation of the guidance, the reporting process went relatively well for highway projects. Transportation had an established procedure for reporting prior to enactment of the Recovery Act. In the cases of Education and Housing, which do not have this prior reporting experience, GAO found more problems. Some of these have been reported in the press. State and federal officials are examining these problems and have stated their intention to deal with them.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Office of Management and Budget's updated December 2009 guidance to Recovery Act recipients states that they will no longer be required to make a subjective judgment on whether jobs are created or retained as a result of the Recovery Act. Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars, aligning with our recommendation. (OMB-10-08, 12/18/2009)

    Recommendation: To improve the consistency of FTE data collected and reported, we also recommended in November 2009 that OMB consider being more explicit that "jobs created or retained" are to be reported as hours worked and paid for with Recovery Act funds.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: On December 18, 2009, the Office of Management and Budget (OMB) issued updated guidance on Recovery Act data quality, non-reporting recipients, and reporting of job estimates. OMB stated that the updated guidance incorporates lessons learned from the first recipient reporting period and further addresses GAO's recommendations. The guidance also provided federal agencies with a standard methodology for effectively implementing reviews of the quality of data submitted by recipients of Recovery Act funding.

    Recommendation: OMB should work with the Recovery Board and federal agencies to reexamine review and quality assurance processes, procedures, and requirements in light of experiences and identified issues with this round of recipient reporting and consider whether additional modifications need to be made and if additional guidance is warranted.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: In its updated December 18, 2009 guidance on reporting Recovery Act job estimates, the Office of Management and Budget (OMB) took three steps to align its guidance with GAO's recommendation. First, OMB changed the full-time equivalent (FTE) calculation to standardize the period of measurement. Second, OMB stated in the guidance that Recovery Act recipients will no longer be required to make a subjective judgment on whether jobs were created or retained as a result of the Recovery Act. Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars. Lastly, in this same guidance, OMB required federal agencies to submit guidance documents to OMB for review and clearance to ensure consistency between federal agency guidance and guidance released by OMB.

    Recommendation: To improve the consistency of FTE data collected and reported, we recommended in November 2009 that OMB clarify the definition and standardize the period of measurement for the FTE data element in the recipient reports.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Implemented

    Comments: In December 2009 recipient reporting guidance, the Office of Management and Budget required federal agencies to submit their guidance documents to them for review and clearance to ensure consistency between federal agency guidance and the guidance released by the Office of Management and Budget. (OMB-10-08, 12/18/2009)

    Recommendation: To improve the consistency of FTE data collected and reported, we also recommended in our November 2009 report that OMB continue working with federal agencies to provide or improve program-specific guidance to assist recipients, especially as it applies to the full-time equivalent calculation for individual programs.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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