This is the accessible text file for GAO report number GAO-10-224T 
entitled 'Recovery Act: Recipient Reported Jobs Data Provide Some 
Insight into Use of Recovery Act Funding, but Data Quality and 
Reporting Issues Need Attention' which was released on November 19, 

This text file was formatted by the U.S. Government Accountability 
Office (GAO) to be accessible to users with visual impairments, as part 
of a longer term project to improve GAO products' accessibility. Every 
attempt has been made to maintain the structural and data integrity of 
the original printed product. Accessibility features, such as text 
descriptions of tables, consecutively numbered footnotes placed at the 
end of the file, and the text of agency comment letters, are provided 
but may not exactly duplicate the presentation or format of the printed 
version. The portable document format (PDF) file is an exact electronic 
replica of the printed version. We welcome your feedback. Please E-mail 
your comments regarding the contents or accessibility features of this 
document to 

This is a work of the U.S. government and is not subject to copyright 
protection in the United States. It may be reproduced and distributed 
in its entirety without further permission from GAO. Because this work 
may contain copyrighted images or other material, permission from the 
copyright holder may be necessary if you wish to reproduce this 
material separately. 


Before the Committee on Oversight and Government Reform, House of 

United States Government Accountability Office: 

For Release on Delivery: 
Expected at 10:00 a.m. EST:
Thursday, November 19, 2009: 

Recovery Act: 

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

Statement of Gene L. Dodaro: 
Acting Comptroller General of the United States: 


[End of section] 

November 19, 2009: 

Mr. Chairman and Members of the Committee: 

I appreciate the opportunity to be here to discuss the report we are 
issuing today on the first set of recipient reports made available in 
October 2009 in response to the American Recovery and Reinvestment 
Act's section 1512 requirement. On October 30, (the 
federal Web site on Recovery Act spending) reported that more than 
100,000 recipients had reported hundreds of thousands of jobs created 
or retained. GAO is required to comment quarterly on the estimates of 
jobs created or retained as reported by direct recipients of Recovery 
Act funding from federal agencies. 

In the first quarterly GAO report, being released today, we address the 
following issues: (1) the extent to which recipients were able to 
fulfill their reporting requirements and the processes in place to help 
ensure recipient reporting data quality and (2) how macroeconomic data 
and methods, and the recipient reports, can be used to help gauge the 
employment effects of the Recovery Act.[Footnote 1] Because the 
recipient reporting effort will be an ongoing process of cumulative 
reporting, our review represents a snapshot in time. 

At this juncture, 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; however, 
there is a range of significant reporting and quality issues that need 
to be addressed. Consequently, our report contains several 
recommendations to improve data quality that Office of Management and 
Budget (OMB) staff generally agreed to implement. We will continue to 
review the processes that federal agencies and recipients have in place 
to ensure the future completeness and accuracy of data reported. 
Finally, our report notes that because the recipient reports cover 
about one-third of Recovery Act funds, both the data in those reports 
and other macroeconomic data and methods together can offer a more 
complete view of the overall employment impact of the Recovery Act. 


In December 2007, the United States entered what has turned out to be 
the deepest recession since the end of World War II. In responding to 
this downturn, the Recovery Act employs a combination of tax relief and 
government spending. About one-third of the funds provided by the act 
are for tax relief to individuals and businesses; one-third is in the 
form of temporary increases in entitlement programs to aid people 
directly affected by the recession and provide some fiscal relief to 
states; and one-third falls into the category of grants, loans, and 

As of September 30, 2009, approximately $173 billion, or about 22 
percent, of the $787 billion provided by the Recovery Act had been paid 
out by the federal government. Nonfederal recipients of Recovery Act- 
funded grants, contracts, and loans are required to submit reports with 
information on each project or activity, including the amount and use 
of funds and an estimate of jobs created or retained. Of the $173 
billion paid out, about $47 billion--a little more than 25 percent--is 
covered by this recipient report requirement. Neither individuals nor 
recipients receiving funds through entitlement programs, such as 
Medicaid, or through tax programs are required to report. In addition, 
the required reports cover direct jobs created or retained as a result 
of Recovery Act funding; they do not include the employment impact on 
materials suppliers (indirect jobs) or on the local community (induced 
jobs), as shown in figure 1. 

Figure 1: Fiscal Year 2009 Recovery Act Funds Paid Out and Recipient 
Reporting Coverage: 

[Refer to PDF for image: pie-chart and illustration] 

Recovery Act funds paid out, end of fiscal year 2009 (in billions): 
Entitlements: $63.7; 
Tax relief: $62.5; 
Contracts, grants, and loans: $47; 
Total: $173. 

Potential employment effects of Recovery Act contracts, grants and 
Contracts, grants, and loans: 
Recipient reporting coverage: Direct. 

Source: GAO. 

[End of figure] 

To implement the recipient reporting data requirements, OMB has worked 
with the Recovery Accountability and Transparency Board (Recovery 
Board)[Footnote 2] to deploy a nationwide data collection system at 
[hyperlink,], while the data reported 
by recipients are available to the public for viewing and downloading 
on [hyperlink,] ( OMB's June 22, 
2009, guidance[Footnote 3] on recipient reporting also includes a 
requirement for data quality review. Prime recipients have been 
assigned the ultimate responsibility for data quality checks and the 
final submission of the data. Because this is a cumulative reporting 
process, additional corrections can take place on a quarterly basis. 

The first of the required recipient reports cover cumulative activity 
since the Recovery Act's passage in February 2009 through the quarter 
ending September 30, 2009. As shown in figure 2, OMB specified time 
frames for different stages in the reporting process: for this current 
report, prime recipients and delegated subrecipients were to prepare 
and enter their information from October 1 to October 10; prime 
recipients were able to review the data for completeness and accuracy 
from October 11 to October 21, and a federal agency review period began 
October 22. The final recipient reporting data for the first round of 
reports were first made available on October 30. 

Figure 2: Recipient Reporting Time Frame: 

[Refer to PDF for image: illustration] 

No less than 35 days prior to the end of the quarter: 
* Prime and subrecipient registration. 

1-10 days after end of quarter (Recipient report adjustments possible): 
* Prime recipients and delegated subrecipients enter draft reporting 
* Initial submission. 

11-21 days after end of quarter (Recipient report adjustments possible) 
(Agency "view only"): 
* Prime recipients review data submitted by subrecipients; 
* Prime recipients and subrecipients make corrections. 

22-29 days after end of quarter (Recipient report adjustments possible) 
(Agency comment period): 
* Agency review of data submitted; 
* Prime recipients and subrecipients make corrections. 

30 days after end of quarter: 
* Recipients reports published on 

90 days after end of quarter: 
* Next quarterly reporting cycle begins—updates reflected cumulatively. 

Source: OMB. 

[End of figure] 

To assess the reporting process and data quality efforts, GAO performed 
an initial set of edit checks and basic analyses on the final recipient 
report data that first became available at on October 30, 
2009. We built on information collected at the state, local, and 
program level as part of our bimonthly reviews of selected states' and 
localities' uses of Recovery Act funds. These bimonthly reviews focus 
on Recovery Act implementation in 16 states and the District of 
Columbia, which contain about 65 percent of the U.S. population and are 
estimated to receive collectively about two-thirds of the 
intergovernmental federal assistance funds available through the 
Recovery Act. 

To understand state quality review and reporting procedures, we visited 
the 16 selected states and the District of Columbia during late 
September and October 2009 and discussed with prime recipients projects 
associated with 50 percent of the total funds reimbursed as of 
September 4, 2009, for that state in the Federal-Aid Highway Program 
administered by the Department of Transportation (DOT). Prior to the 
start of the reporting period on October 1, we obtained information on 
prime recipients' plans for the jobs data collection process. After the 
October 10 data reporting period, we went back to see if prime 
recipients had followed their own plans and subsequently talked with at 
least two subrecipients to gauge their reactions to the reporting 
process and assess the documentation they were required to submit. We 
gathered and examined issues raised by recipients in these 
jurisdictions regarding reporting and data quality and interviewed 
recipients on their experiences using the Web site reporting mechanism. 
During the interviews, we looked at state plans for managing, tracking, 
and reporting on Recovery Act funds and activities. In a similar way, 
we examined a nonjudgmental sample of Department of Education 
(Education) Recovery Act projects at the prime and subrecipient level. 
We also collected information from selected transit agencies and 
housing authorities as part of our bimonthly Recovery Act reviews. 

To gain insight into and understanding of quality review at the federal 
level, we interviewed federal agency officials who have responsibility 
for ensuring a reasonable degree of quality across their program's 
recipient reports. We assessed the reports from the Inspectors General 
(IG) on Recovery Act data quality reviews from 15 agencies. We are also 
continuing to monitor and follow up on some of the major reporting 
issues identified in the media and by other observers. For example, a 
number of press articles have discussed concerns with the jobs 
reporting done by Head Start grantees. According to a Health and Human 
Services (HHS) Recovery Act official, HHS is working with OMB to 
clarify the reporting policy as it applies to Head Start grantees. We 
will be reviewing these efforts as they move forward. 

For our discussion of how macroeconomic data and methods and recipient 
reporting together can be used to assess the employment effects of the 
Recovery Act, we analyzed economic and fiscal data using standard 
economic principles and reviewed the economic literature on the effect 
of monetary and fiscal policies for stimulating the economy. We also 
reviewed the guidance that OMB developed for Recovery Act recipients to 
follow in estimating the effect of funding activities on employment, 
reviewed reports that the Council of Economic Advisers (CEA) issued on 
the macroeconomic effects of the Recovery Act, and interviewed 
officials from CEA, OMB, and the Congressional Budget Office (CBO). 

Our work was conducted in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audits to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence we obtained provides a 
reasonable basis for our findings and conclusions based on our audit 

Initial Observations on Recipient Reporting Data Identify Areas for 
Further Review: 

As detailed in our report, our analysis and fieldwork indicate there 
are significant issues to be addressed in reporting, data quality, and 
consistent application of OMB guidance in several areas. 

* Erroneous or questionable data entries. Many entries merit further 
attention due to an unexpected or atypical data value or relationship 
between data. 

* Quality review by federal agencies and prime recipients. 

* Coverage: While OMB estimates that more than 90 percent of recipients 
reported, questions remain about the other 10 percent. 

* Review: Over three quarters of the prime reports were marked as 
having undergone review by a federal agency, while less than 1 percent 
were marked as having undergone review by the prime recipient: 

* Issues in the calculation of full-time equivalents (FTE). Different 
interpretations of OMB guidance compromise the ability to aggregate the 

Erroneous or Questionable Data Entries: 

We performed an initial set of edit checks and basic analyses on the 
recipient report data available for download from on 
October 30. As part of our review, we examined the relationship between 
recipient reports showing the presence or absence of any full-time 
equivalent (FTE) counts with the presence or absence of funding amounts 
shown in either or both data fields for "amount of Recovery Act funds 
received" and "amount of Recovery Act funds expended." Forty-four 
percent of the prime recipient reports showed an FTE value. However, as 
shown in table 1, we identified 3,978 prime recipient reports where 
FTEs were reported but no dollar amount was reported in the data fields 
for amount of Recovery Act funds received and amount of Recovery Act 
funds expended. These records account for 58,386 of the total 640,329 
FTEs reported. There were also 9,247 reports that showed no FTEs but 
did show some funding amount in either or both of the funds received or 
expended data fields. The total value of funds reported in the 
expenditure field on these reports was $965 million. Those recipient 
reports showing FTEs but no funds and funds but no FTEs constitute a 
set of records that merits closer examination to understand the basis 
for these patterns of reporting. 

Table 1: Count of Prime Recipient Reports by Presence or Absence of 
FTEs and Recovery Act Funds Received or Expended: 

Recovery Act funds: Received or expended funds reported[A]; 
Reports with FTEs: 21,280; (84%); 
Reports without FTEs: 9,247; (29%). 

Recovery Act funds: No received or expended funds reported; 
Reports with FTEs: 3,978; (16%); 
Reports without FTEs: 22,481[B]; (71%). 

Recovery Act funds: Total; 
Reports with FTEs: 25,258; (100%); 
Reports without FTEs: 31,728; (100%). 

Source: GAO analysis of data. 

[A] Prime recipient reports showing a nonzero dollar amount in either 
or both Recovery Act funds received or expended data fields. 

[B] As might be expected, 71 percent of those prime recipient reports 
that did not show any FTEs also showed no dollar amount in the data 
fields for amount of Recovery Act funds received and amount expended. 

[End of table] 

Our review also identified a number of cases in which other anomalies 
suggest a need for review: discrepancies between award amounts and the 
amounts reported as received, implausible amounts, or misidentification 
of awarding agencies. While these occurred in a relatively small number 
of cases, they indicate the need for further data quality efforts. 

Quality Review by Federal Agencies or Prime Recipients: 

OMB guidance assigns responsibility for data quality to the prime 
recipient and provides for federal agency review. A correction could be 
initiated by either the prime recipient or the reviewing agency. OMB 
requires that federal agencies perform limited data quality reviews of 
recipient data to identify material omissions and significant reporting 
errors and notify the recipients of the need to make appropriate and 
timely changes to erroneous reports. The prime recipient report records 
we analyzed included data on whether the prime recipient and the agency 
reviewed the record in the data quality review time frames. Over three 
quarters of the prime recipient reports were marked as having undergone 
federal agency review. 

Less than 1 percent of the records were marked as having undergone 
review by the prime recipient. The small percentage reviewed by the 
prime recipients themselves during the OMB review time frame warrants 
further examination. While it may be the case that the recipients' data 
quality review efforts prior to initial submission of their reports 
were seen as not needing further revision during the review timeframe, 
it may also be indicative of problems with the process of noting and 
recording when and how the prime recipient reviews occur and the 
setting of the review flag. In addition, the report record data 
included a flag as to whether a correction was initiated. Overall, 
slightly more than a quarter of the reports were marked as having 
undergone a correction during the period of review. 

Issues in Calculation of Full-Time Equivalents: 

In its guidance to recipients for estimating employment effects, OMB 
instructed recipients to report solely the direct employment effects as 
"jobs created or retained" as a single number. Recipients are not 
expected to report on the employment impact on materials suppliers 
("indirect" jobs) or on the local community ("induced" jobs). OMB 
guidance stated that "the number of jobs should be expressed as 'full- 
time equivalents (FTEs),' which is calculated as total hours worked in 
jobs created or retained divided by the number of hours in a full-time 
schedule, as defined by the recipient." Consequently, the recipients 
are expected to report the amount of labor hired or not fired as result 
of having received Recovery Act funds. It should be noted that one FTE 
does not necessarily equate to the job of one person. Organizations may 
choose to increase the hours of existing employees, for example, which 
can certainly be said to increase employment but not necessarily be an 
additional job in the sense of adding a person to the payroll. 

Problems with the interpretation of this guidance or the calculation of 
FTEs were one of the most significant problems we found. Jobs created 
or retained expressed in FTEs raised questions and concerns for some 
recipients. While reporting employment effects as FTEs should allow for 
the aggregation of different types of jobs--part-time, full-time, or 
temporary--and different employment periods, if the calculations are 
not consistent, the ability to aggregate the data is compromised. 

One source of inconsistency was variation in the period of performance 
used to calculate FTEs, which occurred in both the highway and 
education programs we examined. For example, in the case of federal 
highways projects, some have been ongoing for six months, while others 
started in September 2009. In attempting to address the unique nature 
of each project, DOT's Federal Highway Administration (FHWA) faced the 
issue of whether to report FTE data based on the length of time to 
complete the entire project (project period of performance) versus a 
standard period of performance, such as a calendar quarter, across all 
projects. According to FHWA guidance, which was permitted by OMB, FTEs 
reported for each highway project are expressed as an average monthly 
FTE. Because FTEs are calculated by dividing hours worked by hours that 
represent a full-time schedule, a standard period of performance is 
important if numbers are to be added across programs. 

As an illustration, take a situation in which one project employed 10 
people full time for 1 month, another project employed 10 people full 
time for 2 months, and a third project employed 10 people full time for 
3 months. FHWA's use of average monthly FTE would result in FTEs being 
overstated compared either with using OMB's June 22 guidance or to 
standardizing the reports for one quarter. Under FHWA's approach, 30 
FTEs would be reported (10 for each of the three projects); on the 
other hand, using a standardized measure, 20 FTEs would be reported (3- 
1/3 for the first project, 6-2/3 for the second project, and 10 for the 
third). Conversely, if a project starts later than the beginning of the 
reporting period, applying OMB's June 22 guidance, which requires 
reporting of FTEs on a cumulative basis, could result in reporting 
fewer FTEs than would be the case under a standardized reporting period 
approach. In either case, failure to standardize on a consistent basis 
prevents meaningful comparison or aggregation of FTE data. 

This was also an issue for education programs. For example, in 
California, two higher education systems calculated FTE differently. In 
the case of one, they chose to use a 2-month period as the basis for 
the FTE performance period. The other chose to use a year as the basis 
for the FTE. The result is almost a three-to-one difference in the 
number of FTEs reported for each university system in the first 
reporting period. Although Education provides alternative methods for 
calculating an FTE, in neither case does the guidance explicitly state 
the period of performance of the FTE. 

OMB's decision to convert jobs into FTEs provides a consistent lens to 
view the amount of labor being funded by the Recovery Act, provided 
each recipient uses a standard time frame in calculating the FTE. The 
current OMB guidance, however, creates a situation where, because there 
is no standard starting or ending point, an FTE provides an estimate 
for the life of the project. Without normalizing the FTE, aggregate 
numbers should not be considered, and the issue of a standard period of 
performance is magnified when looking across programs and across 

Recipients were also confused about counting a job created or retained 
even though they knew the number of hours worked that were paid for 
with Recovery Act funds. While OMB's guidance explains that in applying 
the FTE calculation for measuring the number of jobs created or 
retained recipients will need the total number of hours worked that are 
funded by the Recovery Act, it could emphasize this relationship more 
thoroughly throughout its guidance. 

While there were problems of inconsistent interpretation of the 
guidance, the reporting process went relatively well for highway 
projects. DOT had an established procedure for reporting prior to 
enactment of the Recovery Act. As our report shows, in the cases of 
Education and the Department of Housing and Urban Development, which do 
not have this prior reporting experience, we found more problems. State 
and federal officials are examining identified issues and have stated 
their intention to deal with them. 

Recommendations for Executive Action: 

In our report, we make a number of recommendations to OMB to improve 
the consistency of FTE data collected and reported. OMB should continue 
to work with federal agencies to increase recipient understanding of 
the reporting requirements and application of the guidance. 
Specifically, OMB should: 

* clarify the definition and standardize the period of measurement for 
FTEs and work with federal agencies to align this guidance with OMB's 
guidance and across agencies; 

* given its reporting approach, consider being more explicit that "jobs 
created or retained" are to be reported as hours worked and paid for 
with Recovery Act funds; and: 

* continue working with federal agencies and encourage them to provide 
or improve program-specific guidance to assist recipients, especially 
as it applies to the full-time equivalent calculation for individual 

Given some of the issues that arose in our review of the reporting 
process and data, we also recommend that OMB should work with the 
Recovery Board and federal agencies to re-examine 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 Comments and Our Evaluation: 

In commenting on a draft of our report, OMB staff told us that OMB 
generally accepts the report's recommendations. It has undertaken a 
lessons-learned process for the first round of recipient reporting and 
will generally address the report's recommendations through that 

As recipient reporting moves forward, we will continue to review the 
processes that federal agencies and recipients have in place to ensure 
the completeness and accuracy of data, including reviewing a sample of 
recipient reports across various Recovery Act programs to assure the 
quality of the reported information. As existing recipients become more 
familiar with the reporting system and requirements, these issues may 
become less significant; however, communication and training efforts 
will need to be maintained and in some cases expanded as new recipients 
of Recovery Act funding enter the system. In addition to our oversight 
responsibilities specified in the Recovery Act, we are also reviewing 
how several federal agencies collect information and provide it to the 
public for selected Recovery Act programs, including any issues with 
the information's usefulness. Our subsequent reports will also discuss 
actions taken on the recommendations in this report and will provide 
additional recommendations, as appropriate. 

Recipient Reports and Economic Methods Together Can Offer Insights into 
Employment Impact: 

While the recipient reports provide a real-time window on the use and 
results of Recovery Act spending, the data will represent only a 
portion of the employment effect, even after data quality issues are 
addressed. A fuller picture of the employment effect would include not 
only the direct jobs reported but also the indirect and induced 
employment gains resulting from government spending. In addition, the 
entitlement spending and tax benefits included in the Recovery Act also 
create employment. Therefore, both the data reported by recipients and 
other macroeconomic data and methods are helpful in gauging the overall 
employment effects of the stimulus. 

Economists will use statistical models to estimate a range of potential 
effects of the stimulus program on the economy. In general, the 
estimates are based on assumptions about the behavior of consumers, 
business owners, workers, and state and local governments. 

Neither the recipients nor analysts can identify with certainty the 
impact of the Recovery Act because of the inability to compare the 
observed outcome with the unobserved, counterfactual scenario (in which 
the stimulus does not take place). At the level of the national 
economy, models can be used to simulate the counterfactual, as CEA and 
others have done. At smaller scales, comparable models of economic 
behavior either do not exist or cover only a very small portion of all 
the activity in the macroeconomy. 

Our report discusses a number of the issues that are likely to affect 
the impact of the Recovery Act, including the potential effect of 
different types of stimulus. We also discuss state and sectoral 
employment trends and that the impact of the Recovery Act will vary 
across states. The employment effects of Recovery Act funds are likely 
to vary with the condition of a state's labor market, as measured by 
its unemployment rate. Labor markets in every state weakened over the 
course of the recession, but the degree to which this has occurred 
varies widely across states. 

Figure 3 illustrates this--it shows the geographic distribution of the 
magnitude of the recession's impact on unemployment as measured by the 
percentage change in unemployment between December 2007 and September 

Figure 3: State Unemployment Rate Growth during Recession (Percentage 

[Refer to PDF for image: U.S. map and accompanying data] 

States in the bottom third of the unemployment rate growth 

Alaska: 33.3%; 
Arkansas: 44.9%; 
Connecticut: 71.4%; 
Colorado: 70.7%; 
Iowa: 76.3%; 
Kansas: 68.3%; 
Maine: 80.9%; 
Minnesota: 52.1%; 
Mississippi: 50.8%; 
Missouri: 79.2%; 
Montana: 76.3%; 
Nebraska: 81.4%; 
North Dakota: 35.5%; 
Ohio: 74.1%; 
South Dakota: 77.8%; 
Vermont: 67.5%; 
Wisconsin: 84.4%. 

States in the middle third of the unemployment rate growth 

District of Columbia: 96.6%; 
Georgia: 98%; 
Illinois: 87.5%; 
Kentucky: 98.2%; 
Louisiana: 89.7%; 
Maryland: 10%; 
Massachusetts: 106.7%; 
New Hampshire: 105.7%; 
New York: 93.5%; 
Oklahoma: 86.1%; 
Pennsylvania: 91.3%; 
South Carolina: 100%; 
Tennessee: 98.1%; 
Texas: 86.4%; 
Utah: 106.7%; 
Virginia: 103%; 
Washington: 102.2%. 

States in the top third of the unemployment rate growth distribution: 

Alabama: 181.6%; 
Arizona: 111.6%; 
California: 106.8%; 
Delaware: 118.4%. 
Florida: 129.2%; 
Hawaii: 132.3%; 
Idaho: 114.4%; 
Indiana: 113.3%; 
Michigan: 109.6%; 
Nevada: 155.8%; 
New Jersey: 117.8%; 
New Mexico: 113.9%; 
North Carolina: 116%; 
Oregon: 117%; 
Rhode Island: 116.7%; 
West Virginia: 107%; 
Wyoming: 134.5%. 

Source: Copyright © Corel Corp. All rights reserved (map); GAO analysis 
of U.S. Bureau of Labor Statistics data. 

[End of figure] 

The impact of funds allocated to state and local governments will also 
likely vary with states' fiscal conditions. 

GAO's Review of Allegations of Fraud, Waste, and Abuse Submitted to 

Finally, let me provide the committee with an update on allegations of 
fraud, waste, and abuse made to our FraudNet site. As of November 13, 
2009, FraudNet has received 106 Recovery Act-related allegations that 
were considered credible enough to warrant further review. We referred 
33 allegations to the appropriate agency Inspectors General for further 
review and investigation. Our Forensic Audits and Special 
Investigations unit is actively pursuing 8 allegations, which include 
wasteful and improper spending; conflicts of interest; and grant, 
contract, and identity fraud. Another 9 are pending further review by 
our criminal investigators, and 15 were referred to other GAO teams for 
consideration in their ongoing work. We will continue to monitor these 
referrals and will inform the committee when outstanding allegations 
are resolved. The remaining 41 allegations were found not to address 
waste, fraud, or abuse; lacked specificity; were not Recovery Act- 
related; or reflected only a disagreement with how Recovery Act funds 
are being disbursed. We consider these allegations to be resolved and 
no further investigation is necessary. 

Mr. Chairman and Members of the Committee, this concludes my statement. 
I would be pleased to respond to any questions you may have. 

[End of section] 


[1] GAO, Recovery Act: Recipient Reported Jobs Data Provide Some 
Insight into Use of Recovery Act Funding, but Data Quality and 
Reporting Issues Need Attention, [hyperlink,] (Washington, D.C.: Nov. 19, 
2009). This report as well as all of our Recovery Act related products 
is available at [hyperlink,]. 

[2] The Recovery Act created the Recovery Accountability and 
Transparency Board, which is composed of 12 Inspectors General from 
various federal agencies, who serve with a chairman of the board. The 
board issues quarterly and annual reports on Recovery Act activities to 
Congress and the President. The board is also to issue "flash reports" 
under the statute. 

[3] OMB Memorandum, M-09-21, Implementing Guidance for the Reports on 
Use of Funds Pursuant to the American Recovery and Reinvestment Act of 
2009 (June 22, 2009). 

[End of section] 

GAO's Mission: 

The Government Accountability Office, the audit, evaluation and 
investigative arm of Congress, exists to support Congress in meeting 
its constitutional responsibilities and to help improve the performance 
and accountability of the federal government for the American people. 
GAO examines the use of public funds; evaluates federal programs and 
policies; and provides analyses, recommendations, and other assistance 
to help Congress make informed oversight, policy, and funding 
decisions. GAO's commitment to good government is reflected in its core 
values of accountability, integrity, and reliability. 

Obtaining Copies of GAO Reports and Testimony: 

The fastest and easiest way to obtain copies of GAO documents at no 
cost is through GAO's Web site [hyperlink,]. Each 
weekday, GAO posts newly released reports, testimony, and 
correspondence on its Web site. To have GAO e-mail you a list of newly 
posted products every afternoon, go to [hyperlink,] 
and select "E-mail Updates." 

Order by Phone: 

The price of each GAO publication reflects GAO’s actual cost of
production and distribution and depends on the number of pages in the
publication and whether the publication is printed in color or black and
white. Pricing and ordering information is posted on GAO’s Web site, 

Place orders by calling (202) 512-6000, toll free (866) 801-7077, or
TDD (202) 512-2537. 

Orders may be paid for using American Express, Discover Card,
MasterCard, Visa, check, or money order. Call for additional 

To Report Fraud, Waste, and Abuse in Federal Programs: 


Web site: [hyperlink,]: 
Automated answering system: (800) 424-5454 or (202) 512-7470: 

Congressional Relations: 

Ralph Dawn, Managing Director, 
(202) 512-4400: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7125: 
Washington, D.C. 20548: 

Public Affairs: 

Chuck Young, Managing Director, 
(202) 512-4800: 
U.S. Government Accountability Office: 
441 G Street NW, Room 7149: 
Washington, D.C. 20548: