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United States Government Accountability Office: 
GAO: 

Report to Congressional Requesters: 

January 2014: 

Recovery Act: 

Grant Implementation Experiences Offer Lessons for Accountability and 
Transparency: 

GAO-14-219: 

GAO Highlights: 

Highlights of GAO-14-219, a report to congressional requesters. 

Why GAO Did This Study: 

In response to the recent serious recession, Congress enacted the 
Recovery Act to promote economic recovery, make investments, and 
minimize or avoid reductions in state and local government services. 
Approximately $219 billion was distributed as grants for use in states 
and localities, making grants a major component of the act. These 
grants covered a broad range of areas including education, 
transportation, energy, infrastructure, the environment, health care, 
and housing. 

GAO was asked to examine grant management lessons learned resulting 
from the Recovery Act. This report examines federal, state, and local 
experiences with implementing grants funded by the Recovery Act by 
identifying examples of good practices employed and challenges faced 
in meeting the act's accountability and transparency requirements. GAO 
reviewed relevant documents including OMB and Recovery Board guidance, 
relevant literature, and previous reports by GAO, federal inspectors 
general, and others. GAO also interviewed officials from OMB, the 
Recovery Board, four federal agencies, three state governments, and 
two local governments, among others. This report also draws on GAO's 
past bi-monthly reviews of selected states' and localities' use of 
Recovery funds. 

What GAO Found: 

Federal, state, and local officials responsible for implementing 
grants funded by the American Recovery and Reinvestment Act of 2009 
(Recovery Act) as well as the external oversight community reported 
lessons learned regarding both useful practices and challenges to 
ensuring accountability. Faced with aggressive timelines for 
distributing billions of dollars, they adopted a number of practices 
to foster accountability including (1) strong support by top leaders; 
(2) centrally-situated collaborative governance structures; (3) the 
use of networks and agreements to share information and work towards 
common goals; and (4) adjustments to, and innovations in, usual 
approaches to conducting oversight such as the increased use of up-
front risk assessments, the gathering of “real time” information, 
earlier communication of audit findings, and the use of advanced data 
analytics. For example, in 2009, the Recovery Accountability and 
Transparency Board (Recovery Board) established the Recovery 
Operations Center which used advanced data analysis techniques to 
identify potential fraud and errors before and after payments were 
made. The Recovery Act's emphasis on accountability also presented 
challenges for several states and federal agencies. These included 
limited resources for oversight at the state and local levels, and the 
speed with which Recovery Act funds were distributed. One state 
addressed the challenge of limited resources by transferring funds 
from its central administration account to Recovery Act oversight. To 
facilitate the quick distribution of funds, maintenance-of-effort 
provisions concerning transportation projects (which prevented 
Recovery funds from being used for planned state projects) were rolled 
out before the Department of Transportation had time to issue 
sufficiently detailed definitions of what constituted “state funding.” 
To address this challenge, the department had to issue clarifying 
guidance to states seven times during the first year of the Recovery 
Act. 

Federal, state, and local officials also developed practices and 
encountered challenges related to the transparency of Recovery Act 
funds. An example of one good practice that was required by the 
Recovery Act was the creation of the Recovery.gov website. This site, 
as well as similar portals created by states and localities, 
demonstrated several leading practices for effective government 
websites. These included (1) establishing a clear purpose, (2) using 
social networking tools to garner interest, (3) tailoring the website 
to meet audience needs, and (4) obtaining stakeholder input during 
design. Efforts to increase transparency also led to challenges for 
several states and federal agencies. For example, some recipients 
lacked knowledge or expertise in using the data systems needed to 
report grant spending, while others faced challenges with reporting 
the same data to multiple systems. Early GAO reviews also found 
several problems with job reporting data including discrepancies in 
how full time equivalents were recorded and the capacity of recipients 
to meet reporting deadlines. The Office of Management and Budget (OMB) 
addressed these challenges by issuing additional guidance and 
providing technical support. Finally, agencies receiving Recovery Act 
funds were required to submit performance plans that identified 
measures on a program-by-program basis. The level of detail and the 
specificity of outcomes in these plans varied greatly for the agencies 
GAO examined, making it difficult to determine the extent to which 
some were making progress toward their goals and demonstrating results. 

What GAO Recommends: 

GAO is not making any recommendations in this report. 

View [hyperlink, http://www.gao.gov/products/GAO-14-219]. For more 
information, contact Stanley J. Czerwinski at (202) 512-6806 or 
czerwinskis@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

Practices at Federal, State, and Local Levels Contributed to Improved 
Accountability of Recovery Act Grant Programs but Challenges Existed: 

The Recovery Act Resulted in Increased Transparency but Also Presented 
Challenges: 

Concluding Observations: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: Key Organizations and Their Primary Accountability and 
Oversight Responsibilities Regarding Implementation of the Recovery 
Act: 

Figures: 

Figure 1: Timeline of Selected Recovery Act Events: 

Figure 2: Overview of Recovery Act Spending by Program and Category, 
as of October 31, 2013: 

Figure 3. An Analyst Working in the Recovery Board's Recovery 
Operations Center and a Sample Output of One of ROC's Link Analysis 
Tools. 

Figure 4: Screenshot of Recovery.gov User Identification Feature: 

Figure 5: Screenshot of Recovery.gov's Recipient Projects Page for a 
Georgia ZIP Code, 30318: 

Figure 6: Screenshot of NYCStat Stimulus Tracker Mapping Feature: 

Abbreviations: 

ARRA: American Recovery and Reinvestment Act of 2009: 

API: Application Program Interface: 

BCN: RRA Big City Network: 

CBO: Congressional Budget Office: 

DOE: Department of Energy: 

HUD: Department of Housing and Urban Development: 

DOT: Department of Transportation: 

FHWA: Federal Highway Administration: 

FTE: Full-time Equivalent: 

GPRAMA: GPRA Modernization Act of 2010: 

IG: Inspector General: 

MASSPIRG: Massachusetts Public Interest Research Group: 

NIAF: National Intergovernmental Audit Forum: 

NRT: National Review Team: 

OMB: Office of Management and Budget: 

Recovery Board: Recovery Accountability and Transparency Board: 

ROC: Recovery Operations Center: 

SFSF: State Fiscal Stabilization Fund: 

[End of section] 

United States Government Accountability Office: 
GAO:
441 G St. N.W. 
Washington, DC 20548: 

January 24, 2014: 

The Honorable Thomas R. Carper: 
Chairman: 
The Honorable Tom A. Coburn, M.D.
Ranking Member: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

The Honorable Claire McCaskill: 
Chairman: 
Subcommittee on Financial and Contracting Oversight: 
Committee on Homeland Security and Governmental Affairs: 
United States Senate: 

In response to the recent serious recession, Congress enacted the 
American Recovery and Reinvestment Act of 2009 (Recovery Act) to, 
among other purposes, promote economic recovery, make investments, and 
minimize and avoid reductions in state and local government services. 
[Footnote 1] A significant component of the Recovery Act was grants 
for use in states and localities. As of the end of October 2013, the 
Department of the Treasury had awarded approximately $219 billion of 
Recovery Act funds in the form of grants. These grants covered a broad 
range of areas including education, transportation, infrastructure, 
energy, the environment, health care, and housing. The importance of 
spending Recovery Act funds quickly was highlighted by the President's 
goal of spending 70 percent of the funds by September 30, 2010. You 
asked us to examine grant management lessons learned resulting from 
the Recovery Act and to provide examples of what worked well, as well 
as what challenges were experienced by federal, state, and local 
governments. 

To better understand grant management lessons learned resulting from 
the Recovery Act, we focused on two key issues involving grant 
implementation--accountability[Footnote 2] and transparency[Footnote 
3]--where Congress and the administration placed unprecedented 
emphasis when they crafted the Recovery Act. Specifically, this report 
identifies and provides examples of good practices employed and the 
challenges faced in meeting the Recovery Act's accountability and 
transparency requirements by select federal, state, and local agencies 
implementing grant programs funded by the Recovery Act. Additionally, 
in September 2013, we issued a related report examining federal 
efforts to increase the transparency of federal data and identifying 
lessons learned from operating existing data systems that could 
contribute to these efforts.[Footnote 4] 

To accomplish our objectives, we conducted a detailed literature 
review to identify relevant prior work by us and others regarding 
Recovery Act challenges and lessons learned.[Footnote 5] We then 
interviewed federal, state, and local officials involved in the 
implementation of the Recovery Act and obtained supporting 
documentation. The federal entities that we contacted with broad 
jurisdiction for the Recovery Act were the Recovery Implementation 
Office, the Office of Management and Budget (OMB), and the Recovery 
Accountability and Transparency Board (Recovery Board).[Footnote 6]
We developed criteria to select a subset of four federal agencies, three
state governments, and two local governments. We then contacted these
entities in order to obtain a more in-depth understanding of their
experiences with grant programs funded by the Recovery Act as well as
to identify examples of challenges and good practices. Our selection
criteria included factors such as the nature, type, and value of the grants
handled by the organization; whether the grants involved were already
well-established, greatly increased in size, or entirely new; and the extent
to which the organizations were identified in our previous work or in the
broader literature. The federal agencies we selected were the
Departments of Education, Energy, Transportation, and Housing and
Urban Development. We deemed Medicaid out of scope for the purposes
of this review. Although it was the largest grant program funded by the
Recovery Act, it is primarily an entitlement and is subject to specific rules
that are not typical of program grants. 

The state and local governments we selected included California,
Georgia, and Massachusetts, as well as New York, New York and
Denver, Colorado. These three states are part of a core group of 16
states and the District of Columbia that we selected for our series of
bimonthly reviews of how Recovery Act funds were being used by
recipients. The Recovery Act required that we conduct these bimonthly
reviews of how these funds were used by selected states and localities.
This report also fulfills this requirement in that we examined the use of
Recovery Act funds in the previously mentioned states and cities. To
obtain a broader state perspective, we interviewed officials from the state
Recovery Act coordinators' network, which included key state officials
responsible for implementing the Recovery Act from several states. For
additional context, we supplemented these interviews by meeting with
officials from state and local advocacy organizations such as the National
Association of State Auditors and Comptrollers; the National Association
of State Budget Officers; and the National Association of Counties. We
reviewed and synthesized the information provided by these officials, as 
well as previously issued work regarding challenges and good practices
that relate to our two key themes, and we developed descriptive
examples. We also reviewed and applied criteria established by
HowTo.gov, a source of guidance and leading practices for government
websites, to Recovery.gov and state and local Recovery websites. A full
description of our objectives, scope, and methodology is provided in
appendix I. 

We conducted this performance audit from December 2012 to January 2014 
in accordance with generally accepted government auditing standards. 
Those standards require that we plan and perform the audit 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 obtained provides a reasonable basis for our 
findings and conclusions based on our audit objectives. 

Background: 

The stated purposes of the Recovery Act are to: 

* preserve and create jobs and promote economic recovery; 

* assist those most impacted by the recession; 

* provide investments needed to increase economic efficiency by 
spurring technological advances in science and health; 

* invest in transportation, environmental protection, and other 
infrastructure that will provide long-term economic benefits; and: 

* stabilize state and local government budgets, in order to minimize 
and avoid reductions in essential services and counterproductive state 
and local tax increases.[Footnote 7] 

While many Recovery Act projects focused on immediately jumpstarting 
the economy, some projects--such as those involving investments in 
technology, infrastructure, and the environment--are expected to 
contribute to economic growth for many years. The Recovery Act 
established the Recovery Accountability and Transparency Board 
(Recovery Board) to provide additional monitoring and oversight. The 
board was originally scheduled to terminate operations by September 
30, 2013,[Footnote 8] but its mission has been extended until 
September 30, 2015, to provide oversight and monitoring of assistance 
provided in response to Hurricane Sandy, which hit the northeast in 
October 2012.[Footnote 9] The timeline in figure 1 displays selected 
events related to the Recovery Act and its requirements. 

Figure 1: Timeline of Selected Recovery Act Events: 

[Refer to PDF for image: timeline] 

February 2009: 
* Recovery Act is signed into law; 
* The Recovery Accountability and Transparency Board (Recovery Board) 
is established; 
* Recovery.gov website initially launches to provide projections for 
how, when, and where funds will be spent; 
* The Office of Management and Budget (OMB) issues the first in a 
series of implementation guidance for federal departments and agencies. 

March 2009: 
Recovery Act funds begin to be distributed to states and localities; 
* Federal agencies begin reporting on their use of Recovery Act funds. 

April 2009: 
* GAO reports on the first of its required bi-monthly reviews on the 
use of Recovery Act funds by selected states and localities. 

September 2009: 
* The President's Council of Economic Advisers issues first of 
required quarterly reports on the economic impact of the Recovery Act; 
* Recovery.gov is re-launched to provide additional information and 
new functionality. 

October 2009: 
* Recipients of Recovery Act funds begin reporting on funding used and 
job created. 

November 2009: 
* The Recovery Board launches the Recovery Operations Center; 
* Congressional Budget Office issues first of required estimates on 
the Recovery Act economic impact; 
* GAO issues first of its required quarterly comments on recipients' 
reports of jobs created or retained. 

January 2013: 
* Disaster Relief Appropriations Act, 2013, extends the Recovery 
Board's mission beyond its initial expiration date of September 30, 
2013 to track and monitor spending related to Hurricane Sandy relief 
efforts. 

October 2013: 
* As of October 31, 2013, $811.9 billion of total Recovery Act funds 
have been distributed (estimated 98 percent). 

Sources: GAO presentation of information from Congressional Budget 
Office, Office of Management and Budget, Recovery Board, and 
the White House. 

[End of figure] 

Recovery Act Funding: 

The Congressional Budget Office (CBO) initially estimated the cost of 
the Recovery Act to be approximately $787 billion; however, CBO's most 
recent estimate projects that the Recovery Act will cost approximately 
$830 billion over the 2009-2019 time period.[Footnote 10] As 
of October 31, 2013, the federal government provided a total of 
approximately $812 billion related to Recovery Act activities. This 
includes funding to 28 federal agencies that were distributed to 
states, localities, and other entities; individuals through a combination 
of tax benefits and cuts; entitlements; and loans, contracts, and 
grants. See figure 2 for an overview of Recovery Act spending by 
category and program. Although Medicaid was the single largest 
Recovery Act grant program, we did not include it in our review 
because it is primarily an entitlement program and subject to specific 
rules that are not typical of program grants.[Footnote 11] 
Accordingly, we included the Recovery Act funds directed to Medicaid 
in the entitlement category, rather than the grant category, in figure 
2. Emphasizing the importance of spending Recovery Act funds quickly, 
the President established a goal that by September 30, 2010, 70 
percent of Recovery Act funding should be spent (that is, both 
obligated and outlayed).[Footnote 12] Therefore, agencies had 
approximately 19 months to spend almost three-quarters of their 
Recovery funds. 

Figure 2: Overview of Recovery Act Spending by Program and Category, 
as of October 31, 2013: 

[Refer to PDF for image: 2 pie-charts; 1 vertical bar graph] 

All Recovery Act funding: 
Tax benefits: 36%; 
Entitlements: 32%; 
Contracts, grants and loans: 32%. 

Grants, contracts, and loans: 
Grants: 80%; 
Contracts: 15%; 
Loans: 5%. 

Grant programs by category[A]: 

Program category: Education; 
Grant amount: $83.3 billion; 

Program category: Transportation; 
Grant amount: $47.2 billion; 

Program category: Energy and Environment; 
Grant amount: $22.1 billion; 

Program category: Infrastructure; 
Grant amount: $17.1 billion; 

Program category: Research and Development and Science; 
Grant amount: $15.7 billion; 

Program category: Housing; 
Grant amount: $11.5 billion; 

Program category: Family; 
Grant amount: $5.1 billion; 

Program category: Health; 
Grant amount: $5.6 billion; 

Program category: Public Safety; 
Grant amount: $5.7 billion; 

Program category: Job Training and Unemployment; 
Grant amount: $4.8 billion; 

Program category: Other; 
Grant amount: $0.8 billion. 

Sources: GAO analysis of Recovery.gov, U.S. Treasury Federal Agency 
Financial and Activity Reports and Recovery Act recipient
reporting data. 

[A] Does not include Medicaid which is instead reflected in the 
entitlement category in the first pie chart above. 

[End of figure] 

Grant Programs Funded by the Recovery Act: 

Grants have played a key role in providing Recovery Act funds to 
recipients, with approximately $219 billion being awarded for use in 
states and localities through a wide variety of federal grant 
programs. With the intent of disbursing funds quickly to create and 
retain jobs and stabilize state and local budgets, a large majority of 
Recovery Act grant funding went to states and localities within 3 
years of the law's enactment. Recipients reported receiving 
approximately 88 percent of their grant awards by the end of the 2ND 
quarter of calendar year 2013. State and local spending was as follows: 

* Fiscal year 2009: spending totaled approximately $53 billion in 
actual outlays. 

* Fiscal year 2010: spending was at its highest level with 
approximately $112 billion in actual outlays. 

* Fiscal year 2011: spending decreased from its peak, with 
approximately $69 billion in actual outlays. 

The 28 federal agencies that received Recovery funds developed 
specific plans for spending the money.[Footnote 13] The agencies then 
awarded grants and contracts to state governments or, in some cases, 
directly to schools, hospitals, or other entities. OMB guidance 
directed these federal agencies to file weekly financial reports 
detailing how the money was being distributed. Recipients of the 
funds, in turn, were required by the Recovery Act to file quarterly 
reports on how they were spending the Recovery Act funds that they 
received. 

Recovery Act grants provided to states and localities covered a broad 
range of areas such as transportation, energy, and housing. Education 
programs were the largest recipients of Recovery Act grant awards. Of 
the education programs funded in the Recovery Act, the largest in 
terms of funding was the newly created State Fiscal Stabilization Fund 
(SFSF) program, which provided assistance to state governments to 
stabilize their budgets by minimizing budgetary cuts in education and 
other essential government services, such as public safety. The 
Recovery Act appropriated $53.6 billion for the SFSF program.[Footnote 
14] As figure 2 (above) shows, grants represent over one-quarter of 
Recovery Act funding. Out of that category, funding received in the 
program areas of education, transportation, and energy and environment 
amount to approximately $137 billion, or 70 percent, of Recovery Act 
grant spending to date. 

Recovery Act Oversight and Accountability Responsibilities of Key 
Participants: 

The Recovery Act called for a large amount of federal funds to be 
spent (that is, obligated and outlayed) in a short period of time--
approximately 19 months--by the end of September 30, 2010. To assure 
the public that their tax dollars were being spent efficiently and 
effectively, the Recovery Act placed increased emphasis on 
accountability and transparency through enhanced reporting, auditing, 
and evaluation requirements for users of Recovery Act funds. The 
Recovery Act delineated some of these increased accountability and 
transparency responsibilities to existing organizations and entities 
as well as newly-created ones. See table 1 for details regarding the 
primary accountability and oversight responsibilities of key 
organizations involved in implementing the Recovery Act. 

Table 1: Key Organizations and Their Primary Accountability and 
Oversight Responsibilities Regarding Implementation of the Recovery 
Act: 

Federal government: 

Key organizations and entities: Congressional Budget Office; 
Primary accountability and oversight responsibilities: 
* Provide periodic estimates on the Recovery Act's effect on economic 
output and employment. (Recovery Act, div. A, § 1512(e), 123 Stat. at 
288). 

Key organizations and entities: Council of Economic Advisers; 
Primary accountability and oversight responsibilities: 
* Prepare periodic reports on employment and economic impacts of 
Recovery Act spending. (Recovery Act, div. A, § 1513, 123 Stat. at 
288). 

Key organizations and entities: Federal agencies; 
Primary accountability and oversight responsibilities: 
* Report how they are distributing the funds on a weekly basis. 
(Office of Management and Budget Guidance, OMB Memorandum M-09-10); 
* Use a separate accounting identifier for Recovery Act funded 
projects. (Office of Management and Budget Guidance, OMB Memorandum M-
09-10); 
* Make publicly available recipient reports within 30 days of the end 
of each quarter. (Recovery Act, div. A, § 1512(d), 123 Stat. at 288). 
[Footnote 15]

Key organizations and entities: Government Accountability Office; 
Primary accountability and oversight responsibilities: 
* Conduct bimonthly reviews and prepare reports of such reviews of 
selected states' and localities' use of Recovery Act funds. (Recovery 
Act, div A, § 901(a), 123 Stat. at 191); 
* Comment on quarterly recipient reports on the number of jobs created 
or preserved. (Recovery Act, div. A, § 1512(e), 123 Stat. at 288); 
* Review areas such as trade adjustment assistance, new education 
incentive grants, and efforts to increase small business lending. 
(Recovery Act, div. B, § 1894, 123 Stat. at 423 and Recovery Act, div. 
A, § 14009, 123 Stat. at. 285). 

Key organizations and entities: Inspectors general; 
Primary accountability and oversight responsibilities: 
* Audit the programs, grants, and projects funded under the Recovery 
Act, both within their particular agency or department and 
collectively address concerns raised by the public. (Recovery Act, 
div. A, § 1514, 123 Stat. 289); 
* Serve on Recovery Act Board. (Recovery Act, div. A, § 1522(b), 123 
Stat. at 290);[Footnote 16]  
* Conduct whistleblower reprisal investigations. (Recovery Act, div. 
A, 123 § 1553, Stat. 297). 

Key organizations and entities: Office of Management and Budget (OMB); 
Primary accountability and oversight responsibilities: 
* Coordinate with federal agencies on recipient reporting guidance. 
(Recovery Act, div. A, § 1512(g), 123 Stat. at 288); 
* Coordinate with the Council of Economic Advisers on their reports. 
(Recovery Act, div. A, § 1513(a), 123 Stat. at 288). 

Key organizations and entities: Recovery Accountability and 
Transparency Board (Recovery Board); 
Primary accountability and oversight responsibilities: 
* Review whether use of Recovery Act funds met applicable standards 
and specified purposes. (Recovery Act, div. A, § 1523(a)(1), 123 Stat 
at 290); 
* Identify fraud, waste and mismanagement related to the use of 
Recovery Act funds and refer to federal Inspector General. (Recovery 
Act, div. A, § 1523(a)(2)(C), 123 Stat at 290); 
* Review whether there are sufficient and qualified personnel 
overseeing Recovery Act funds. (Recovery Act, div. A, § 1523(a)(2)(D), 
123 Stat at 290); 
* Submit quarterly and annual reports to the President and Congress, 
as well as "flash reports" on potential problems that require 
immediate attention. (Recovery Act, div. A, § 1523(b), 123 Stat at 
291); 
* Make recommendations to federal agencies on measures to prevent 
fraud, waste, and mismanagement of Recovery Act 
funds. (Recovery Act, div. A, § 1523(c)(1), 123 Stat at 291); 
* Established and maintains the Recovery.gov website. (Recovery Act, 
div. A, § 1526(a), 123 Stat at 293). 

Key organizations and entities: Recovery Implementation Office; 
Primary accountability and oversight responsibilities: 
* Support key administration officials and coordinate Recovery Act 
efforts at OMB; 
* Facilitate interagency coordination; 
* Complement oversight work led by the Recovery Board. 

Key organizations and entities: Recovery Independent Advisory Panel; 
Primary accountability and oversight responsibilities: 
* Provide recommendations to the Recovery Board to identify and 
prevent fraud, waste and abuse in Recovery Act programs. (Recovery 
Act, div. A, §1542, 123 Stat at 295). 

State government: 

Key organizations and entities: Governors; 
Primary accountability and oversight responsibilities: 
* Certify that the state will request and use funds provided by the 
Recovery Act in accordance with the law and that the funds will be 
used to create jobs and promote economic growth within 45 days of 
enactment. (Recovery Act, div. A, § 1607, 123 Stat at 303). 

Key organizations and entities: State auditors; 
Primary accountability and oversight responsibilities: 
* Work with the Recovery Board in coordinating oversight activities. 
(Recovery Act, div. A, § 1528, 123 Stat at 294). 

Key organizations and entities: State government agencies; 
Primary accountability and oversight responsibilities: 
* Report on the amount of funds received on a quarterly basis. 
(Recovery Act, div. A, § 1512 (c)(1) 123 Stat at 287); 
* Report on their use of funds on a quarterly basis. (Recovery Act, 
div. A, § 1512 (c)(2) 123 Stat at 287); 
* Report on an estimate of the number of jobs created and the number of 
jobs retained on the quarterly basis. (Recovery Act, div. A, § 
1512(c)(3) (D) 123 Stat at 287); 
* Use a separate accounting identifier for Recovery Act funded 
projects. (Office of Management and Budget Guidance, OMB Memorandum M-
09-10). 

Local government and others: 

Key organizations and entities: Recipients' of Recovery Act funds 
(local governments, universities and other research institutions, non-
profit organizations, and private companies); 
Primary accountability and oversight responsibilities: 
* Report quarterly on Recovery Act funds including on (1) the amount 
of funds received, (2) the amount of funds expended or obligated to 
projects and activities, (3) a detailed list of all projects and 
activities for which funds were expended or obligated, including a 
name, description, and evaluation of completion status for each 
project or activity, and (4) an estimate of the number of jobs created 
and the number of jobs retained by each project or activity. (Recovery 
Act, div. A § 1512 (c) 123 Stat at 287-288). 

Source: GAO analysis of Recovery Act and OMB/White House memoranda. 

[End of table] 

Practices at Federal, State, and Local Levels Contributed to Improved 
Accountability of Recovery Act Grant Programs but Challenges Existed: 

Strong Support by Top Leaders, a Collaborative Approach, and 
Systematic Use of Data Were Key to Managing Recovery Act 
Implementation: 

Under the Recovery Act, accountability for timely and effective 
implementation of the law was a shared responsibility that included 
agencies involved in directly implementing the law as well as the 
external oversight community. On the operational side, among the 
practices that facilitated accountability were (1) strong support by 
top leaders, (2) centrally-situated collaborative governance 
structures, and (3) the regular and systematic use of data to support 
management reviews. 

Strong Support by Top Leaders: 

We have previously reported on the importance of having the active 
support of top leadership when undertaking large and complex 
activities.[Footnote 17] This was the case in the implementation of 
the Recovery Act where, at the federal level, the President and Vice 
President made clear that effective Recovery Act implementation was a 
high priority for them. The President assigned overall management 
responsibility for the Recovery Act to the Vice President and 
appointed a former OMB deputy director to head the newly-created 
Recovery Implementation Office with direct reporting responsibilities 
to both him and the Vice President. The former head of the Recovery 
Implementation Office told us that his position gave him access to top 
leadership in the administration. This official said he participated 
in daily morning staff meetings with the White House senior staff, 
briefing them on any issues related to the Recovery Act. He briefed 
the President directly approximately once a month. In addition, he 
typically met with the Vice President's staff on a daily basis after 
the President's staff meeting. He also met with the Vice President 
directly every 1 to 2 weeks. Finally, he frequently interacted with 
the head of OMB and sometimes also sat in on his staff meetings. 

In each of these roles he had direct access to, and support from, the 
highest levels of government. The former head of the Recovery 
Implementation Office stated this was key to his ability to ensure 
cooperation and coordination with other federal departments during the 
Recovery Act. For example, he told us that senior government leaders 
knew that his office had the authority of the President and Vice 
President behind it, and if they did not do what was requested, they 
would have to explain their reasoning to senior White House officials. 
This awareness of the Recovery Implementation Office's line of 
authority helped to ensure that federal officials coordinated and 
cooperated with the office. In turn, the involvement and engagement of 
top leaders at individual federal agencies was facilitated by OMB 
guidance that required each agency to identify a senior accountable 
official--generally at the deputy secretary or subcabinet level--to be 
responsible for Recovery planning, implementation, and performance 
activities within the agency.[Footnote 18] These senior agency leaders 
were regularly involved with overseeing and reporting on Recovery Act 
efforts. 

At the state level, several governors demonstrated top leadership 
support by establishing specific positions, offices, or both that were 
responsible for state Recovery efforts. For example, the Governor of 
Massachusetts created the Massachusetts Recovery and Reinvestment 
Office as a temporary program management office for the specific task 
of overseeing Recovery activities. The former director of the office 
stated that he reported directly to, and drew his authority from, the 
Governor. The Governor also elevated the office to the rank of a 
senior level office. This action increased it's the office's 
visibility and gave it a seat at the Governor's weekly cabinet 
meetings, where its director would regularly report on the status of 
Recovery Act projects. In addition, no state Recovery Act program 
could be approved without the director's consent. The former director 
told us that the success of the office was attributable to the direct 
line of authority it had with the Governor of Massachusetts. In 
fiscal year 2012, Massachusetts' Office of Commonwealth Performance, 
Accountability, and Transparency was created, in part, as a direct 
result of the Recovery Act.[Footnote 19] According to Massachusetts' 
state officials, this office is the state's attempt to take lessons 
from the state's experience with the Massachusetts Recovery and 
Reinvestment Office and apply them post Recovery Act. 

Centrally-Situated Collaborative Governance Structures: 

Collaboration played a key role in ensuring timely implementation of, and
accountability for, Recovery Act grant programs. Because the success of
the Recovery Act relied on many programs being implemented quickly at
the federal, state, and local levels, cooperation and collaboration among
these groups was essential. While centrally-situated federal entities such
as the Recovery Implementation Office, OMB, and the Recovery Board
set the tone, issued guidance, and provided ongoing oversight, many
implementation decisions were left to state and local partners directly
engaged in managing Recovery Act programs. For example, agencies
and grantees were given freedom to publish notices of funding availability 
and to run competitions in a manner consistent with their individual
statutes, regulations, and agency practices. On the other hand, there was
also centralization of oversight as demonstrated by the direct involvement
of high-level officials such as the Vice President, cabinet secretaries, and
senior accountable officials in federal agencies receiving Recovery Act
funding, as well as centrally-placed policy and oversight organizations
such as OMB and the Recovery Board. This combination of a centralized
and decentralized approach to managing the implementation of the
Recovery Act represented a new method of managing grant oversight,
one which simultaneously recognized the importance of collaboration
while increasing the role of the center.[Footnote 20] 

Officials in the Recovery Implementation Office employed a 
collaborative, facilitative approach, while also leveraging the 
authority of the Vice President to facilitate the participation of 
stakeholders. The office functioned as a convener and problem-solver 
that engaged with a wide range of federal, state and local partners. 
This approach was embodied in the objectives identified by the Vice 
President when the office was established. These objectives included 
the expectation that office staff respond to requests and questions 
within 24 hours, cut across bureaucratic silos by reaching out to a 
variety of partners, and always be accessible. Toward this end, the 
office adopted the role of an "outcome broker," working closely with 
partners across organizational silos at all levels of government in 
order to foster implementation of the Recovery Act and achieve 
results.[Footnote 21] Another role of the Recovery Implementation Office 
was to closely monitor Recovery Act spending. One way it did so was to 
monitor grants to ensure that they were consistent with the objectives 
identified by the Vice President. A second way the office monitored 
spending was to review weekly financial reports on agency obligations 
and expenditures for programs receiving Recovery Act funds and to meet 
with the agencies on a regular basis. 

OMB sought to facilitate effective implementation of the Recovery Act 
by working to establish and strengthen relationships with the state 
and local governments that would ultimately implement the programs on 
the ground. This was done in two ways: (1) by soliciting feedback from 
state and local partners when formulating and revising rules and 
policies governing the implementation of Recovery Act programs and (2) 
by developing its capacity to respond to questions from the many 
states and localities that would be implementing those rules and 
policies. A senior OMB official directly involved in this work told us 
the office had to move out of its traditional role as mainly a policy-
making organization to adopt a more interactive and service-oriented 
approach. Under this approach, key activities involved engaging with 
and obtaining feedback from states and localities as well as providing 
technical support to these groups so that they could meet the Recovery 
Act's numerous reporting requirements. 

For example, to obtain feedback from state and local partners when 
developing key Recovery Act policies, OMB became actively involved in 
weekly conference calls that included a diverse group of federal, 
state, and local organizations. Starting in the spring of 2009, 
regular participants in these calls included OMB; GAO; the National 
Association of State Auditors, Comptrollers and Treasurers; the 
National Governors' Association; the National Association of State 
Budget Officers; the Recovery Board; the National Association of 
Counties; the National Association of State Chief Information 
Officers; and the National Association of State Purchasing Officers. 
These weekly calls were scheduled after several of these organizations 
wrote to OMB and GAO to express their strong interest in coordinating 
on reporting and compliance aspects of the Recovery Act. An important 
outcome of this regular information exchange was to make OMB aware of 
the need to clarify certain reporting requirements. The Recovery Act 
required federal agencies to make information publicly available on 
the estimate of the number of jobs created and number of jobs retained 
as a result of activities funded by the act. Our previous Recovery Act 
work in the states raised the issue that some local officials needed 
clarification regarding definitions when reporting on job data. The 
local partners participating in these calls were able to corroborate 
what we reported and provide OMB with specific information about what 
additional guidance was needed. To obtain information to further guide 
refinements to the Recovery implementation process, at the end of 
2009, OMB officials said they (1) interviewed and surveyed numerous 
stakeholders including governors and state and local recipients, and 
(2) worked with GAO to identify best practices. Based on these 
efforts, OMB subsequently revised its guidance, which focused on 
lessons learned around enhancing recipient reporting and compliance. 
[Footnote 22] 

To improve technical support provided to state and local governments 
implementing the Recovery Act, OMB worked with the Recovery Board to 
establish an assistance center based on an "incident command" model. 
[Footnote 23] One OMB official likened this approach to an extension 
of a traditional response model used during natural disasters, where 
the country's economic condition during the Great Recession was the 
"incident" and the Recovery Act was the intervention to be rolled out 
through many partners. To help implement this approach, OMB worked 
with officials from the Department of Agriculture who offered the 
services of one of their national emergency management teams to help 
set up and coordinate this effort. Given the large number of state and 
local governments that needed to be supported, OMB requested that each 
agency with grant programs receiving Recovery Act funds contribute 
personnel to support the center. According to OMB officials, from 
September to mid-December of 2009, the center responded to 
approximately 35,000 questions from states and localities. 

Regular and Systematic Use of Data to Support Management Reviews: 

Under the Recovery Act, some agencies used new data-driven approaches 
to inform how they managed programs, and some of those new approaches 
become institutionalized at the agencies post-Recovery. While the 
Government Performance and Results Act (GPRA) Modernization Act of 
2010 (GPRAMA) laid out requirements for data-driven quarterly 
performance reviews, several Recovery Act efforts aided agencies in 
implementing those requirements.[Footnote 24] For example, in February 
2013 we found that the Department of Energy (DOE) built on its 
Recovery Act-related performance reviews and established quarterly 
performance reviews, called business quarterly reviews, in 2011. 
[Footnote 25] Another control DOE implemented for large dollar 
projects was a "Stage-Gate" process, which did not allow the funds 
to be disbursed all at one time. It required the recipient to meet 
certain metrics or results before receiving additional funding at 
certain levels. DOE Office of Inspector General (OIG) officials 
believed this Stage-Gate approach was an effective internal control 
tool. Post-Recovery, DOE has institutionalized both the business 
quarterly reviews and Stage-Gate processes. 

As part of the Department of Housing and Urban Development's (HUD) 
implementation of the Recovery Act, the agency piloted a new approach 
to data management and accountability called HUDStat. HUD's Recovery 
Act team collected data about the status of projects and progress 
towards financial goals. Armed with this information, HUD leaders 
could identify and neutralize spending delays across the agency's 80 
field and regional offices. In some cases, a senior HUD official 
would make a phone call to a mayor or a governor to stress the need 
to spend funds quickly. In other cases, staff would refocus on regions 
where progress was slow and would work with grantees to move more 
quickly to promote economic growth. After the Recovery Act, and in 
accordance with GPRAMA requirements, HUD continued to use HUDStat to 
share data and resources across the agency. 

Heightened Accountability Requirements and Aggressive Implementation 
Timelines Led to Increased Coordination and Information Sharing: 

The Recovery Act contained increased accountability requirements in 
the areas of reporting, audits, and evaluations to help ensure that 
tax dollars were being spent efficiently and effectively. At the same 
time, the act provided aggressive timelines--approximately 19 months--
for the distribution of funds. The combination of these two factors 
placed high expectations on federal, state, and local governments and 
led to increased coordination both vertically across levels of 
government and horizontally within the same level of government to 
share information and work towards common goals. 

Networks Provided a Mechanism to Share Information: 

Organizations involved in overseeing and implementing grants funded by 
the Recovery Act made use of both new and established networks to 
share information. Shortly after the Recovery Act was signed into law, 
our then Acting Comptroller General and the Chair of the Council of 
the Inspectors General on Integrity and Efficiency hosted a 
coordination meeting with the OIGs or their representatives from 17 
federal agencies to discuss an approach to coordination and 
information sharing going forward. We also worked with state and local 
auditors and their associations to facilitate regular conference calls 
to discuss Recovery Act issues with a broad community of interested 
parties. Participants included the Association of Government 
Accountants; the Association of Local Government Auditors; the 
National Association of State Auditors, Comptrollers, and Treasurers; 
the Recovery Board; and federal OIGs. 

Another active venue for information sharing was the National 
Intergovernmental Audit Forum (NIAF). The NIAF, led during this period 
by our then Acting Comptroller General, is an association that has 
existed for over three decades as a means for federal, state, and 
local audit executives to discuss issues of common interest and 
enhance accountability. NIAF's May 2009 meeting brought together these 
executives and others including OMB, to update them on the Recovery 
Act and provide another opportunity to discuss emerging issues and 
challenges. In addition, several Intergovernmental Audit Forum 
meetings were scheduled at the regional level across the country and 
sought to do the same. This regional coordination and information 
sharing directly contributed to our Recovery Act work in the states. 
For example, our western regional director made a presentation at the 
Pacific Northwest Audit Forum regarding our efforts to coordinate with 
state and local officials in conducting Recovery Act oversight. In 
conjunction with that forum and at other related forums, she regularly 
met with the principals of state and local audit entities to 
coordinate oversight of Recovery Act spending. 

Officials from New York City also played a role in creating networks 
to share information. Believing that large cities were probably facing 
similar issues and challenges, Recovery officials in New York City 
established the American Recovery and Reinvestment Act Big City 
Network (BCN) to serve as a peer exchange group and facilitate 
information sharing among large municipalities across the country. The 
group was composed of over 20 large cities with geographical 
diversity, such as Los Angeles, Philadelphia, Phoenix, and Seattle, 
that received a significant amount of federal stimulus funding. The 
former head of the BCN told us that the organization held frequent 
teleconferences and used this collaboration to elevate issues unique 
to large cities with OMB, the White House's Recovery Implementation 
Office, and the Recovery Board. For example, BCN informally surveyed 
its members in January 2010 concerning each grant and associated funds 
they received. From this survey, BCN officials assembled a list of 
cross-jurisdictional issues reflecting the perspectives and 
experiences of large cities and shared them with the White House, OMB, 
and the Recovery Board. Likewise, OMB, the Recovery Implementation 
Office, and the Recovery Board used BCN as a vehicle for getting 
information out to its partners on the ground. 

Similarly, at the state level, a network was established where state 
Recovery Act coordinators shared information and lessons learned on a 
weekly basis. This state-level network also discussed ongoing Recovery 
Act policy and operational issues with the White House, OMB, and the 
Recovery Board to ensure successful implementation. Federal officials 
joined the state calls on a regular basis. Both BCN and the state 
network proved to be especially helpful in fostering intergovernmental 
communications. For example, the former head of the BCN stated that in 
response to a Senate Committee request in 2012, New York City 
leveraged both BCN and the state Recovery Act coordinators' network to 
inform the current discussion on the Digital Accountability and 
Transparency Act, proposed legislation which seeks to improve grant 
transparency through increased reporting.[Footnote 26] Cities and 
states mobilized quickly and came together on key consensus principles 
for Congress' consideration. 

Organizations Worked Together in New Ways to Achieve Common Goals: 

Under the tight time frames set for implementation of the Recovery 
Act, federal agencies needed to work together to accomplish their 
goals. For example, HUD and DOE shared a goal of weatherizing low-
income households through long-term energy efficiency improvements. To 
get the projects under way as quickly as possible, they worked 
together to ensure that homeowners met income standards. Before 
Recovery Act implementation, both DOE and HUD conducted their own 
independent income verifications. In May of 2009, DOE and HUD entered 
into a memorandum of understanding that eliminated the need for 
separate DOE income verification for people whose incomes had already 
been verified by HUD. According to DOE officials, this collaboration 
helped projects move faster, reduced the cost and administrative 
burden of duplicative verifications, and helped DOE weatherize 
numerous homes under the Recovery Act through 2013. DOE officials 
reported that between fiscal years 2010 and 2013, the joint effort 
helped weatherize approximately 1.7 million housing units, the 
majority of which were low-income. This policy of sharing low-income 
verifications for weatherizing homes has continued post-Recovery Act. 

At the state level, Massachusetts is an example where officials 
developed new ways of working together to achieve Recovery Act goals. 
For example, Massachusetts state officials established the Stimulus 
Oversight and Prevention (STOP) Fraud Task Force in 2009 to fulfill 
the Recovery Act's goal of preventing fraud, waste, and abuse of 
Recovery Act funds. This task force included the state OIG's office, 
the Attorney General's office, and the State Auditor. Over the next 2 
years, the group met bimonthly to discuss fraud prevention and 
collaborated with several federal agencies including the Department of 
Justice, the Federal Bureau of Investigation, and HUD. The group also 
brought in federal OIGs including DOE and Education, the state 
Comptroller's office, and the Massachusetts Recovery and Reinvestment 
Office to discuss our report findings and OMB guidance. According to 
officials from the Massachusetts Attorney General's office, the task 
force improved communication and furthered efforts to avoid overlap. 

The Recovery Act Prompted Adjustments and Innovations in Oversight to 
Foster Accountability: 

Faced with the short time frames and accelerated roll out of Recovery 
Act funds, both the oversight community and agencies adjusted their 
oversight approach and innovated to foster accountability for Recovery 
Act funds at the federal and state agency levels. These organizations 
became more engaged in up-front analysis and monitoring of programs 
under the Recovery Act and their reviews were often issued before 
money was spent. These practices included (1) assessing and planning 
for risks up front; (2) reviewing programs before and while they were 
being funded rather than waiting until after programs were 
implemented; (3) communicating findings quickly through informal 
processes as opposed to regular full reports; and (4) using advanced 
data analytics. 

Increased Use of Up-Front Risk Assessments and Planning: 

At the federal level, several agency OIGs conducted up-front risk 
planning to proactively prepare for the influx of Recovery Act funds. 
For example, the Department of Transportation's (DOT) OIG instituted 
a three-phase risk assessment process for DOT programs that received 
Recovery Act funds. The OIG first identified existing program risks 
based on past reports; it next assessed what the department was doing 
to address those risks; and it then conducted the audit work. DOT's 
OIG is continuing to use this three-phase scan approach for its work 
on Hurricane Sandy. 

At the Department of Education, when the OIG realized that Education's 
discretionary grant budget would increase from a typical allotment of 
$60 billion annually to over $100 billion under the Recovery Act, 
officials put aside their initial work plan and developed a new one 
which focused on the Recovery Act. Toward this end, the OIG conducted 
up-front risk assessments by looking at its prior work to identify 
persistent implementation issues going back to fiscal year 2003. The 
OIG then issued a 2009 capping report that summarized these issues. 
This report and additional risk assessments on Recovery Act-specific 
issues guided the OIG's internal control audits that focused on the 
use of funds, cash management, subrecipient monitoring, and data 
quality for Recovery Act education programs. 

Shortly after the Recovery Act was signed, DOE's OIG reviewed the 
challenges the agency would need to address to effectively manage the 
unprecedented level of funding and to meet the goals of the Recovery 
Act. The resulting report was based on a body of work by the OIG to 
improve operations and management practices.[Footnote 27] The OIG 
identified specific risks that they discovered during past reviews and 
investigations. The OIG also suggested actions that should be 
considered during Recovery Act planning and program execution to help 
reduce the likelihood that these historical problems would recur. 
Further, the OIG described the department's initial efforts to 
identify risks and to develop strategies to satisfy the Recovery Act's 
goals and objectives. In addition, the report outlined the OIG's 
planned oversight approach which adopted a risk-based strategy that 
included, among other things, early evaluations of internal controls 
and assessments of performance outcomes. 

At HUD, regional offices conducted front-end risk assessments of 
programs that would be receiving Recovery Act funds. The HUD OIG 
considered these risk assessments when preparing its work plan and 
carrying out audits. The office also conducted capacity reviews for 
programs that field offices had identified as having known issues. The 
purpose of these capacity reviews was to enable the office to actively 
address and work to resolve known issues before Recovery Act funds 
were distributed to programs. 

At the state level, audit organizations also adjusted their usual 
approaches when planning and conducting reviews of grant programs that 
received Recovery Act funds. Several state auditors conducted extra 
audit work of state programs up front in an effort to identify risks 
and inform their work moving forward. For example, the Office of the 
California State Auditor conducted "readiness reviews" that 
highlighted known vulnerabilities in programs receiving Recovery Act 
money. The office used the information coming out of these reviews to 
identify specific issues to focus on in future work as well as to 
inform the oversight committees of the state legislature and other 
state officials involved in Recovery Act oversight and implementation. 
As a result of one such review that focused on DOE's Weatherization 
Assistance Program, the State Auditor was able to identify key 
implementation issues that needed attention at a joint meeting of 
state and federal officials organized by the Governor's Recovery Act 
Task Force. The readiness review identified specific areas where the 
program needed to improve and informed the frequency with which state 
auditors would go back to program officials to check on progress. 
According to the California state auditor, among the benefits of this 
approach was the feedback it provided to state agencies on their level 
of readiness as well as the detailed information given to both the 
state legislature and the Governor's Recovery Act Task Force on the 
agency's progress. The use of readiness reviews has continued post-
Recovery Act. Most recently, the office employed the approach in 2013 
as it prepared to audit the implementation of the Affordable Care Act 
in California. 

Increased use of "Real Time" Information: 

The Recovery Act's short time frames prompted the oversight community 
to carry out some of its reviews in "real time" as Recovery funds were 
being rolled out, as opposed to the traditional approach of reviewing 
a program after implementation. Under this approach, members of the 
oversight community looked for ways to inform program officials of 
challenges and needed improvements much earlier in the process. For 
example, as described previously in table 1, the Recovery Act 
specified several roles for us, including conducting bimonthly reviews 
of selected states' and localities' use of funds made available under 
the Act. We subsequently selected a core group of 16 states and the 
District of Columbia to follow over the next few years to provide an 
ongoing longitudinal analysis of the use of funds provided in 
conjunction with the Recovery Act. The Recovery Act also assigned us a 
range of responsibilities to help promote accountability and 
transparency. Some were recurring requirements such as providing 
bimonthly reviews of the use of funds made available under various 
provisions of the Recovery Act by selected states and localities and 
reviews of quarterly reports on job creation and job retention as 
reported by Recovery Act fund recipients. Other requirements included 
targeted studies in several areas such as small business lending, 
education, and trade adjustment assistance. In total, we issued 
approximately 125 reports on, or related to, the Recovery Act 
resulting in more than 65 documented accomplishments. 

The interest in obtaining "real time" feedback concerning Recovery Act 
implementation was not limited to the oversight community. For 
example, DOT's Federal Highway Administration (FHWA) established 
National Review Teams (NRT) within 3 months of the Recovery Act's 
passage to help assist its division offices attain the greater level 
of accountability and transparency called for under the Recovery Act. 
As we previously reported, the NRTs were composed of FHWA staff--
separated from the rest of FHWA--to act as a neutral third party to 
conduct oversight.[Footnote 28] The mission of the NRTs was to conduct 
quick reviews of FHWA programs and assess processes and compliance 
with federal requirements in six key risk areas: (1) preliminary 
plans, specifications, and estimates; (2) contract administration; (3) 
quality assurance of construction materials; (4) local public 
agencies; (5) disadvantaged business enterprises; and (6) eligibility 
for payments. As a review progressed, the NRT discussed findings with 
division office and state transportation staff. According to FHWA 
officials, independent reviews had several benefits: 

* a consistent, comparative perspective on the oversight regularly 
conducted by division offices, and the collection of information at 
the national level on both best practices and recurring trouble spots 
across FHWA division offices; 

* additional "boots on the ground" for project-level oversight and 
increased awareness of federal oversight activity among states, 
Metropolitan Planning Organizations, and other transportation 
organizations receiving Recovery Act funds; and: 

* an independent outside voice to examine Recovery Act projects and 
point out problems, keeping the partnering relationship between the 
division offices and the state DOTs intact. 

Division offices and state officials with whom we spoke responded 
positively to the NRT reviews. The NRT was viewed as a success for 
FHWA and it has since added independent reviews based largely on the 
NRT model to provide independent corporate level review of projects 
and programs in addition to providing other support services. 

Earlier Communication of Audit Findings: 

The rapid pace at which Recovery Act funds were being distributed also 
prompted audit organizations to communicate their findings earlier in 
the audit process. For example, DOT's OIG issued periodic advisories 
within the agency rather than waiting until an audit was completed to 
share its findings. According to OIG staff, these advisories informed 
the department of issues or concerns shortly after they were 
discovered, thereby permitting program staff to take corrective action 
much more quickly. 

In our first report on our bimonthly reviews of the use of Recovery 
Act funds by selected states and localities, we determined that the 
Single Audit process needed adjustment to provide the necessary level 
of focus and accountability over Recovery Act funds in a timelier 
manner than the current schedule.[Footnote 29] Subsequently, we 
recommended that the director of OMB adjust the Single Audit process 
to provide for review of the design of internal controls during 2009 
over programs to receive Recovery Act funding, before significant 
expenditures in 2010. In response, in October 2009 OMB implemented the 
Single Audit Internal Control Project--a collaborative effort between 
16 volunteer states receiving Recovery Act funds, their auditors, and 
the federal government--to achieve more timely communication of 
internal control deficiencies for higher-risk Recovery Act programs. 
[Footnote 30] The project encouraged auditors to identify and 
communicate significant deficiencies and material weaknesses in 
internal controls over compliance for selected major Recovery Act 
programs 3 months sooner than the 9-month time frame required under 
statute. The project allowed program management officials at an 
audited agency to expedite corrective action and help mitigate the 
risk of improper Recovery Act expenditures. In May 2010, we reported 
that the project met some of its objectives and was helpful in 
identifying critical areas where further OMB actions were needed to 
improve the Single Audit process over Recovery Act funding.[Footnote 
31] 

Auditors at the local level also communicated their findings early. 
For example, the Denver City Auditor's Office adopted new practices to 
provide more timely information on Recovery Act programs to the Mayor 
and other key officials, particularly on issues affecting compliance 
with Recovery Act reporting requirements. Using a tiered notification 
process, the auditor's office would initially notify the appropriate 
city department informally through e-mail or a similar means of 
potential issues they were finding during an on-going audit. The 
auditor's office would revisit the issues later and, if the office 
determined the issue had not been addressed, it would then formally 
communicate any substantive issue on a real-time basis through an 
"audit alert." These alerts were typically brief documents and went to 
the affected departments as well as directly to the Mayor's work group 
that oversaw the city's Recovery Act implementation. If appropriate 
action was still not forthcoming, the city auditor might issue a 
public alert or maybe a full public audit report. According to a 
senior city audit official, the alerts were beneficial because the 
city auditor did not have to conduct a full audit to communicate risks 
and findings to decision makers, allowing them to more quickly address 
problems. The city auditor issued its first audit alert in October 
2009 and subsequently issued another one in February 2010 when 
problems from the first one had not been addressed. After the second 
alert, the city administration corrected the identified problems. 

Use of Advanced Data Analytics: 

To further increase accountability under the Recovery Act, the 
Recovery Board utilized innovative data analytics in carrying out its 
oversight responsibilities. Data analytics is a term typically used to 
describe a variety of techniques that can be used to analyze and 
interpret data to, among other things, help identify and reduce fraud, 
waste, and abuse. Specifically, predictive analytic technologies can 
be used to identify potential fraud and errors before payments are 
made, while other techniques, such as data-mining and data-matching of 
multiple databases, can identify fraud or improper payments that have 
already been awarded, thus assisting agencies in recovering these 
dollars.[Footnote 32] In October 2009, the Recovery Board established 
an innovative center to analyze the use of Recovery Act funds by 
employing data analytics (see figure 3). The Recovery Operations 
Center (ROC) served as a centralized location for analyzing Recovery 
Act funds and their recipients through the use of such predictive 
analytic technologies. 

According to Recovery Board staff, the results of these approaches 
provided the OIG community and other oversight authorities with 
information they could use to focus limited resources on cities, 
regions, and high-risk government programs where historical data and 
current trends suggested the likelihood of future risk. ROC analysts 
would cross-reference lists of grant recipients or sub-recipients 
against a variety of databases to look for risk indicators such as 
criminal convictions, lawsuits, tax liens, bankruptcies, risky 
financial deals, or suspension/debarment proceedings. 

One tool used to do this is link analysis, which assists the analyst 
in making connections by visually representing investigative findings. 
Link analysis charts visually depict how individuals and companies are 
connected, what awards an entity has received, and how these actors 
may be linked to any derogatory information obtained from the 
databases described above . Such tools, when combined with enhanced 
Geographic Information System capabilities, enable ROC analysts to 
conduct geospatial analysis by displaying data from multiple datasets 
on maps to help them make linkages and discover potential problems. 

For example, the ROC helped a federal agency investigate possible 
contract fraud related to over-billing on multiple contracts. ROC 
analysts found 99 recipient awards made to a single company totaling 
over $12 million. In another example, the ROC helped to investigate 
allegations of false claims and major fraud against the United States. 
ROC analysts found officers of one company were also executives of 
more than 15 other companies, many of which were located at the same 
address, and collectively received millions in Recovery Act funds. 

More recently, the ROC has been used to track funds and help reduce 
fraud, waste, and abuse related to the tens of billions of dollars 
that have been awarded to states and communities to assist in their 
recovery after Hurricane Sandy hit in October 2012. Recovery Board 
staff have sought to leverage the expertise they have developed in 
analyzing financial spending and identifying potential fraud and high-
risk indicators based on their experience with the Recovery Act. 

Figure 3: An Analyst Working in the Recovery Board's Recovery 
Operations Center and a Sample Output of One of ROC's Link Analysis 
Tools: 

[Refer to PDF for image: photograph and illustrative example of link 
analysis tool] 

Sources: GAO representation of Recovery Board information; Recovery 
Board (photo). 

[End of figure] 

The Recovery Act's Accountability Requirements Also Presented 
Oversight Challenges: 

To assure the public that their tax dollars were being spent 
efficiently and effectively, the Recovery Act called for increased 
oversight and accountability of those funds by oversight and program 
entities at the federal, state, and local levels. This increased 
emphasis on oversight and accountability presented challenges for 
those entities stemming from (1) a lack of financial resources to 
conduct oversight at the state and local levels, (2) human capital 
issues, and (3) the accelerated roll out of Recovery Act funds. 

Limited Resources to Conduct Oversight at the State and Local Levels: 

Officials with whom we spoke in several states expressed concerns that 
the Recovery Act did not provide funding to state oversight entities, 
although it placed additional federal requirements on them to provide 
proper accounting and to ensure transparency. Federal agency OIG 
offices received a significant amount to conduct oversight of Recovery 
Act funds--ranging anywhere from $1 million to $48.25 million 
distributed to more than 28 agencies. In contrast, states and 
localities relied on their existing budgets and human capital 
resources (and, in some cases, supplemented by a small percentage of 
administrative funds) to carry out their additional oversight 
activities. 

Due to fiscal constraints, states reported significant declines in the 
number of management and oversight staff--limiting states' ability to 
ensure proper implementation and management of Recovery Act funds. 
With oversight capacity already strained in many states, the situation 
was further exacerbated by increased workloads resulting from 
implementation of new or expanded grant programs funded by the 
Recovery Act. For example, Massachusetts officials explained that the 
state oversight community faced budget cuts of about 10 percent. 
According to officials from the OIG and the State Auditor's office, 
their budgets are almost entirely composed of salaries, and any cuts 
in funding resulted in fewer staff available to conduct oversight. As 
a result of the cuts, the Inspector General stated that his department 
did not have the resources to conduct any additional oversight related 
to Recovery Act funds. Further, the Massachusetts State Auditor 
described how his department had to furlough staff for 6 days in 
fiscal year 2009. In recognition of this situation and reflective of 
the state's desire to pursue fraud in the Recovery Act program, for 
state fiscal years 2009 through 2012, the Massachusetts Recovery and 
Reinvestment Office allocated funds from the state's central 
administration account to the Attorney General, State Auditor, and 
OIG offices to ensure that oversight would take place. 

The California State Auditor also cited the lack of federal funding 
for state and local oversight as a challenge to ensuring 
accountability in the implementation of the Recovery Act. In a 2009 
testimony to the California state budget committee, the State Auditor 
said that her office would need to conduct an additional 14 audits 
based on an initial analysis of the estimated stimulus funds that 
California would receive. Furthermore, the programs that the office 
was auditing at the time received additional funds, which potentially 
increased the workload and cost to audit those programs as well. 
Finally, new requirements created by the Recovery Act for existing 
programs also impacted the State Audit Office's efforts. The 
California State Auditor noted that given the additional 
responsibilities her office faced due to the influx of stimulus funds, 
any budget cuts would adversely affect the office's ability to conduct 
audits. 

In another example, Colorado's state auditor reported that state 
oversight capacity was limited during Recovery Act implementation, 
noting that the Department of Health Care Policy and Financing had 
three controllers in 4 years and the state legislature's Joint Budget 
Committee cut field audit staff for the Department of Human Services 
in half. In addition, the Colorado DOT's deputy controller position 
was vacant, as was the Department of Personnel & Administration's 
internal auditor position. Colorado officials noted that these 
actions were, in part, due to administrative cuts during a past 
economic downturn in an attempt to maintain program delivery levels. 

Accelerated Rollout of Recovery Act Programs Presented Oversight 
Challenges: 

The President's goal for quickly spending Recovery Act funds created a 
large spike in spending for a number of programs in the 28 agencies 
receiving Recovery Act funds. The act also created a number of new 
programs--requiring agencies to move quickly. As a result, under the 
Recovery Act's accelerated rollout requirements, some federal agencies 
and states faced oversight challenges. 

For example, DOT and states faced numerous challenges in implementing 
the Recovery Act's maintenance-of-effort oversight mechanism due to 
the accelerated rollout of funds. The Recovery Act contains 
maintenance of effort provisions designed to prevent recipients, such 
as state DOTs, public housing agencies, and private companies, from 
substituting planned spending for a given program with Recovery Act 
funds. That is, the provisions ensured that the increased federal 
spending would supplement rather than replace state, local, or private 
spending.[Footnote 33] The maintenance-of-effort provision for DOT in 
the Recovery Act required the governor of each state to certify that 
the state would maintain its planned level of transportation spending 
from February 17, 2009, through September 30, 2010.[Footnote 34] 
Twenty-one states did not meet their certified planned spending levels, 
and a January 2011 preliminary DOT report found that some of these 
states were unclear on what constituted "state funding". DOT also 
found some of the states were unclear about how well DOT guidance on 
calculating planned expenditures would work in the many different 
contexts in which it would have to operate. As a result, many problems 
came to light only after DOT had issued initial guidance and states had 
submitted their first certifications. DOT issued guidance seven times 
during the first year after the act was signed to clarify how states 
were to calculate their planned or actual expenditures for their 
maintenance-of-effort certifications. Further, many states did not 
have an existing means to identify planned transportation expenditures 
for a specific period, and their financial and accounting systems did 
not capture that data. Therefore, according to DOT and some state 
officials, a more narrowly focused requirement applying only to 
programs administered by state DOTs or to programs that typically 
receive state funding could have helped address the maintenance-of-effort 
challenges. DOT and state officials told us that while the maintenance-
of-effort requirement can be useful for ensuring continued investment 
in transportation, allowing more flexibility for differences in states 
and programs, and adjustments for unexpected changes to states' 
economic conditions, should be considered for future provisions. 

At DOE, the department initially encountered some challenges with 
fully developing a management and accountability infrastructure 
because of the large amount of Recovery Act funding it received in a 
short period of time. According to an official in the DOE OIG's office, 
this was especially true with the new Energy Efficiency Conservation 
Block Grant program.[Footnote 35] This official told us that some 
states and localities also did not have the infrastructure in place 
(including the necessary training) to manage the large amount of 
additional federal funding. Further, DOE required recipients' 
weatherization plans to address how the respective state's current and 
expanded workforce (employees and contractors) would be trained. In 
May 2010, according to DOE, the agency was in the process of 
developing national standards for weatherization certification and 
accreditation. DOE estimated that developing the standards would take 
about 2 years--a time frame that did not match the accelerated timing 
of the Recovery Act's funds' distribution. Several years after the 
Recovery Act was implemented, DOE reported that it had completed 
certain milestones toward developing national standards for 
weatherization, training, certification, and accreditation, but was 
still working to finalize other elements such as its national 
certification program. 

The Recovery Act Resulted in Increased Transparency but Also Presented 
Challenges: 

Recovery Act Transparency Websites Embody Several Leading Practices: 

In an April 2009 memorandum, OMB directed agencies to follow leading 
practices for federal website development and management, such as 
those listed on HowTo.gov, a website managed by the Federal Web 
Managers Council and the General Services Administration.[Footnote 36] 
HowTo.gov makes available a list of the "Top 10 Best Practices" for 
federal websites as a resource to improve how agencies communicate and 
interact with customers and provide services and information.[Footnote 
37] Recovery.gov, as well as selected state and city Recovery 
websites, demonstrated several of these leading practices including 
establishing a clear purpose of the website, using social networking 
tools to garner interest in the website, tailoring websites to meet 
audience needs, and obtaining stakeholder input when designing the 
website. In addition, we found that some websites enabled place-based 
performance reporting. 

Establish a Clear Purpose of the Website: 

Consistent with leading practices for the development of federal 
websites on HowTo.gov, Recovery.gov and selected state Recovery 
websites clearly identify for the user the purposes of the site and 
the ways it can be used to accomplish tasks efficiently. According to 
HowTo.gov, this is important because people often visit government 
websites with a specific task in mind, and if it is not easy to find 
the information quickly they need to quickly complete that task, they 
will leave the site. Recovery.gov contains an entire page that outlines 
what users can do on the site, including how to use the raw data 
available through the website; report waste, fraud, and abuse; or find 
job and grant opportunities. Further, Recovery.gov has a "Get Started" 
page with an overview of the information on the site including 
Recovery Act goals, the Recovery Board's mission, what information is 
not available on the website, and what users can do on the website. 

Similarly, Massachusetts' Recovery website has tabs on its homepage 
that link to information on how to use the website to track Recovery 
Act jobs, spending, vendors, and the impact of Recovery Act dollars 
in the state.[Footnote 38] For example, the "track jobs" page informs 
users how they can track jobs created and retained in their community 
and provides a user guide to assist them in their query. 

Use Social Networking Tools to Garner Interest in the Website: 

Another leading practice for federal websites includes the use of 
social networking tools. According to Howto.gov, social media is 
transforming how government engages with citizens, allowing agencies 
to share information and deliver services more quickly and effectively 
than ever before. Recovery.gov and selected state and local Recovery 
websites use social networking tools to garner interest in their 
websites. These websites integrated Web 2.0 technologies to help 
people share and use the information they provide. For example, to 
develop web-based communities of interest, Recovery.gov has a 
dedicated social media web page that has links to Recovery's presence 
on various social-networking tools such as Facebook, Twitter, YouTube, 
and Flickr.[Footnote 39] Recovery.gov's social media page enables 
users to (1) download a Recovery application for iPhones and for iPads 
with a mapping feature showing how Recovery Act funds were being 
spent, (2) sign up for a Recovery.gov month-in-review email, and (3) 
sign up to receive Recovery RSS web feeds.[Footnote 40] Finally, 
Recovery.gov also has a blog, written by Recovery Board staff, with a 
stated purpose to further a dialog on transparency and accountability 
in government, as well as to provide a forum for thoughts, comments, 
and suggestions from the public. 

New York City also made use of social networking to communicate 
information regarding Recovery Act implementation through the use of a 
Tumblr blog.[Footnote 41] City officials used this blog to communicate 
stories and examples to its residents about how it was using Recovery 
Act funds and the impact of those investments.[Footnote 42] City 
officials said the blog allowed them to get behind full-time 
equivalent numbers and dollar expenditures so that people could better 
understand how the Recovery Act was helping them tackle problems where 
they work and live. For example, the blog described one project that 
had no net increase in jobs but still made a valuable difference for 
the city because Recovery Act funds were used to repair 300,000 
potholes and move to zero diesel fuel emissions for city vehicles. 

Tailor Website to Meet Audience Needs: 

Organizing a website according to the needs of its audience is also a 
key leading practice for federal websites since an agency's goal is to 
build the right website for the people who need it and serve them 
effectively by learning as much as possible about the website's 
customers and what they do. Recovery.gov has dedicated pages for 
different audiences that compile and organize relevant resources 
according to their needs and interests. On its home page, Recovery.gov 
has a tab which provides links to pages designed with specific users 
in mind such as citizens, the press, and grant recipients. There are 
also links to pages on neighborhood Recovery Act projects, information 
on the Recovery Board, and other information users are looking for. 
For example, grant recipients have a dedicated page that provides 
resources such as reporting timelines, user guides, a service/help 
desk, recipient reporting information, and a recipient awards map. 
(See figure 4.) 

Figure 4: Screenshot of Recovery.gov User Identification Feature: 

[Refer to PDF for image: screenshot] 

Depicted: links: 

I Am: 

An Interested Citizen: 
See information about projects in your area, learn more about the 
Recovery Act, and connect with Recovery.gov via social media. 

A Data User: 
Download recipient data and find widgets that you can post on your own 
website. 

A Member of the Press: 
Learn about the Recovery Board, and get the details on recipient 
reporting. 

A Recipient: 
Review the reporting schedule for the current reporting cycle, and see 
the latest enhancements to FederalReporting.gov. 

I Am Looking For: 

Projects in My Neighborhood: 
Enter your zip code to see the Recovery projects in your area, and 
visit the Map Gallery. 

Opportunities and Benefits: 
Search for jobs through a variety of job searches, and find 
information about COBRA and Unemployment Insurance. 

Recovery Act and Recovery Board Information: 
Read about the Recovery Act, the Board and its members, and actions of 
the Inspectors General. 

A Snapshot of Recovery: 
See pictures on the Recovery.gov Flickr page, watch Recovery videos, 
and read stories about Recovery projects. 

Source: Recovery.Gov. 

Note: The link to the above web page is [hyperlink, 
http://www.recovery.gov/Pages/audience_landing.aspx]. 

[End of figure] 

On Recovery.gov's “Developer Center” web page, users can access data
reported by recipients of Recovery awards through the Recovery
application program interface (API) and the Mapping API.[Footnote 43] 
Users can also find widgets providing data summaries by state, county,
congressional district, or ZIP code as reported by recipients. 
[Footnote 44] The web page also has a tool for users to build 
customized charts and graphs displaying information such as funds 
awarded and received by state, agencies by number of awards, and 
spending categories by funds awarded. 

The state of Massachusetts also tailored its Recovery Act website to meet
its audience's needs. Prior to its implementation of the Recovery Act's
transparency provisions, Massachusetts had little experience with
electronic reporting and disclosure of federal contracts, grants, and loans.
The MassRecovery website provided weekly citizen updates and
testimonials of how spending has benefited lives. The Citizens' Update
web page provides a summary of where the state's Recovery Act dollars
are going, where jobs are being created and retained, and information on
beneficiaries of funds received. In December 2009, MASSPIRG, an
independent consumer research group, issued a brief pointing to the
strengths of the Massachusetts Recovery website including the ability of
the Citizens' Update web page to show money spent and jobs created
and retained in easy-to-read pie charts and tables; a summary of funds
distributed through the state; and an interactive state map of Recovery
Act spending. Further, in January 2010, Good Jobs First, a national policy
resource center, reviewed and evaluated states' Recovery Act websites.
The organization ranked Massachusetts' Recovery website on its top 10
list citing such beneficial features as the site's comprehensive search
engine, data download capability, and information on five key Recovery
Act project elements—description, dollar amount, recipient name, status,
and the text of the award.

Obtain Stakeholder Input When Designing the Website: 

Leading website practices also recommend that developers obtain 
stakeholder input when designing federal websites by engaging 
potential users through focus groups and other outreach; regularly 
conducting usability tests to gather insight into navigation, the 
organization of content, and the ease with which different types of 
users can complete specific tasks; and collecting and analyzing 
performance, customer satisfaction, and other metrics. According to 
leading website practices, these efforts are important for collecting 
and analyzing information about audiences, their needs, and how they 
are using, or want to use, the website. 

The developers of Recovery.gov followed this leading practice by using 
input from user forums, focus groups, and usability testing with 
interested citizens to collect feedback and recommendations, which then 
inform the development of the website from its initial stages. For example, 
teaming with OMB and the National Academy of Public Administration, 
the developers of Recovery.gov hosted a week-long electronic town hall 
meeting at the end of April 2009 entitled "Recovery Dialogue on 
Information Technology Solutions." Over 500 citizens, information 
technology specialists, and website development experts registered for 
the event and submitted numerous ideas. Recovery.gov adopted some of 
the ideas right away and included others in the re-launched version of 
the website in September 2009. These changes included a standardized 
reporting system for recipients, a greater use of maps, and a feedback 
section for users. Additionally, in October 2009, Recovery.gov 
developers conducted remote usability testing with 72 users, where the 
developers received suggested changes, some of which they later 
implemented. Further, in 2012, significant changes were made to 
Recovery.gov based on user feedback on the website. These changes 
included creating a recipient and agency data page, agency profiles, 
and a new Recipient Projects Map with a series of dropdown menus and 
checkboxes that enable users to filter data so they can see it in a 
targeted fashion (for example, by state, agency, or category). 

Enable Place-Based Performance Reporting: 

For websites covering numerous projects at various locations, a place-
based geographic information system can be a useful tool. According 
to the White House's Digital Government Strategy, the federal 
government needs to be customer-centric when designing digital service 
platforms such as websites. In other words, agencies need to be 
responsive to customers' needs by making it easy to find and share 
electronic information and accomplish important tasks. From the 
beginning, recipient reported data on Recovery.gov was geo-coded in a 
way that made it possible for users to find awards and track the progress 
of projects on a block-by-block basis. The presentation of information on 
Recovery.gov and on many state websites generally targeted individual 
citizens who were not experts in data analysis. The format and content 
of data prioritized mapping capabilities and invited people to enter 
their ZIP code and locate projects in their immediate area. For example, 
figure 5 shows the map a user sees if ZIP code 30318 in Georgia is entered 
into this web page. From this map, the user can click on any of the 
dots that represent Recovery projects to find out information such as 
the project recipient name, the award amount, project description, the 
number of jobs created, and completion status. Additional information 
available to users includes the amount of funds received by recipients 
as well as the overall distribution of grants by funding categories for 
that area. 

Figure 5: Screenshot of Recovery.gov's Recipient Projects Page for a 
Georgia ZIP Code, 30318: 

[Refer to PDF for image: screenshot] 

Depicts the following: 

Recipient Projects; 
Total Funds Awarded; 
Total Awards; 
List of Awards. 

Source: Recovery.gov. 

Note: The link to access Recovery.gov's recipient projects page can be 
found at [hyperlink, 
http://www.recovery.gov/arra/Transparency/RecoveryData/Pages/RecipientRe
portedDataMap.aspx]. 

[End of figure] 

States and localities also utilized mapping features on their Recovery 
websites. For example, in New York City, Recovery officials launched a 
Recovery Act website, the NYCStat Stimulus Tracker, as an interactive, 
comprehensive reporting tool. The federal government's website,
Recovery.gov, served as the design inspiration and, according to a senior
city official, Stimulus Tracker was one of the first publicly-accessible
websites to report Recovery Act data for a local jurisdiction. City
Recovery officials were able to develop and launch New York City's
stimulus website more quickly than other locations—approximately 6
weeks from start to completion—because they were able to leverage a
previously implemented information technology platform to support
citywide performance reporting. Stimulus Tracker allowed the public to
explore several levels deeper than what was at Recovery.gov, which
reported at the funding award level. For example, Stimulus Tracker broke
down each award into several projects, each of which had its own
dashboard page that displayed information such as (1) the status of the
project, (2) the percentage of total funds spent, (3) start date and
spending deadlines, and (4) the number of jobs created or retained.
Visitors to the site could drill into a record of every payment made with
stimulus funds through the additional feature “Payment Tracker” and
every contract to carry out stimulus-funded work through “Contract
Tracker.”

Stimulus Tracker also offered an interactive map for site visitors who 
were interested in knowing how stimulus dollars were allocated 
geographically and where specific projects were located. This 
information was layered on top of the city's existing online map 
portal. It included such items as the locations of schools, libraries, 
hospitals, and subways, as well as online property, building, statistics, 
and census information. As New York City's existing online map portal 
could already be navigated either by entering a specific address or 
simply using zoom and scroll tools, city Recovery Act officials were 
able to build on this application and include a city mapping tool for 
Recovery Act funds where the public could find any project with a 
discrete location. See figure 6 for a screen shot of New York City's 
mapping tool depicting the city's Recovery Act projects. 

Figure 6: Screenshot of NYCStat Stimulus Tracker Mapping Feature: 

[Refer to PDF for image: screenshot] 

Depicted on map: call out of site data: 

Federal Stimulus: 
Wards Island Wastewater Treatment Plant Replacement of Primary Sludge 
System; 
Description: Replacement of Primary Sludge System; 
Stimulus Tracker ID: 107006; 
Lead City Agency: DEP. 

This project is funded by the American Recovery and Reinvestment Act. 

Source: City of New York (Copyright © 2013, The City of New York). 

Note: The link to the NYC Stimulus Tracker webpage is [hyperlink, 
http://maps.nyc.gov/doitt/nycitymap/?featuretypes=STIMULUS]. 

[End of figure] 

Recovery Act Performance Was Mostly Measured by Outputs Rather than 
Outcomes, and Challenges with Both Existed: 

Recipients and Agencies Were Required to Report Amount and Speed of 
Funding but Faced Challenges in Doing So: 

The Recovery Act requires recipients to report on their use of 
funding and agencies that provide those funds to make the reports 
publicly available.[Footnote 45] The Recovery Act's recipient 
reporting requirements apply only to nonfederal recipients of funding, 
including all entities other than individuals receiving Recovery Act 
funds directly from the federal government such as state and local 
governments, private companies, educational institutions, nonprofits, 
and other private organizations. As required by section 1512(c) of the 
Recovery Act, recipients were to submit quarterly reports that 
included the total amount of Recovery Act funds received, the amount 
of funds expended or obligated to projects or activities, and a 
detailed list of those projects or activities.[Footnote 46] For each 
project or activity, the detailed list was to include the project's 
name, description, and an evaluation of its completion status. Also, 
the recipient reports were to include detailed information on any 
subcontracts or subgrants as required by the Federal Funding 
Accountability and Transparency Act of 2006.[Footnote 47] For example, 
recipient reports are required to also include details on sub-awards 
and other payments. 

With the Recovery Act's enhanced reporting requirements on spending, 
agencies and recipients faced several challenges. Many agencies and 
state and local partners were limited in their capacity to meet the 
enhanced reporting requirements due to a lack of knowledge and 
expertise. Others struggled with the burden of double reporting when 
they had to report to federal systems tracking Recovery dollars as 
well as to agency systems because, in some cases, agencies required 
more data to manage their programs. Finally, some had trouble 
reporting data for certain projects within the operational limitations 
of place-based data mapping systems. 

Capacity to meet reporting requirements. Many state and local partners 
were limited in their capacity to meet spending reporting requirements 
because they lacked knowledge and expertise. Using a centralized 
mechanism like FederalReporting.gov to capture recipient reporting 
information was a new process that recipients and agencies had to 
learn. We have previously reported on the questions raised by state 
officials regarding the reporting capacities of some local 
organizations, particularly small rural entities, boards, or 
commissions, and private entities not used to doing business with the 
federal government.[Footnote 48] In addition, some state officials 
said that the Recovery Act's requirement that recipients report on the 
use of funds within 10 days after a quarter ends was a challenge 
because some sub-recipients were unable to send them the needed data on 
time. 

Officials at several agencies suggested that if FederalReporting.gov 
had allowed certain key award and identifying data fields to be pre-
populated each quarter, it would have likely resulted in fewer data 
errors for agencies to address and eased the reporting burden on 
recipients. In our September 2013 report and testimony on federal data 
transparency, we concluded that the transparency envisioned under the 
Recovery Act for tracking spending was unprecedented for the federal 
government, requiring the development of a system that could track 
billions of dollars disbursed to thousands of recipients. Such a system 
needed to be operational quickly to enable posting of spending information 
rapidly for a variety of programs. However, because agency systems did 
not collect spending data in a consistent manner, the most expedient 
approach for Recovery Act reporting was to collect data directly from 
fund recipients.[Footnote 49] Recipients had the additional burden of 
having to provide this information and when the data had to be entered 
manually, it could impact the accuracy of the data.[Footnote 50] Thus, 
in September 2013 we recommended that the director of OMB, in 
collaboration with members of the Government Accountability and 
Transparency Board, develop a plan to implement comprehensive 
transparency reform, including a long-term timeline and requirements 
for data standards, such as establishing a uniform award identification 
system across the federal government.[Footnote 51] 

Earlier this year, the Recovery Board noted that agencies and OIGs 
also experienced difficulties adapting to the more frequent reporting 
(every quarter) and more detailed reporting (e.g., jobs created or 
individual project activities) reporting required of most government 
grant recipients. [Footnote 52] Agency officials acknowledged spending 
considerable staff hours training recipients, providing technical 
assistance to them, verifying and validating their data, and following 
up with them when issues arose. Despite efforts to streamline and 
enhance existing review protocols, agencies still needed skilled people 
to review and process applications for awards. Although agencies and 
OIGs credited outreach to recipients for reducing noncompliance with 
reporting requirements, the amount of staffing resources it took to 
conduct that outreach was significant. 

Double reporting. We have previously noted that recipients of Recovery 
Act funds were required to report similar information to both agency 
reporting systems and FederalReporting.gov.[Footnote 53] Several 
federal agency and state government officials we spoke with also 
mentioned that reporting to FederalReporting.gov resulted in double 
reporting for their agency and grantees as several of them deemed 
their existing internal systems superior and therefore would end up 
reporting to both. For example, at HUD, program offices were unable 
to abandon their established reporting systems because the agency's 
systems collected data necessary to support HUD's grants management 
and oversight processes. HUD officials told us that requiring 
grantees to report using two systems resulted in double reporting 
of data and proved burdensome to recipients and to HUD staff who 
spent many hours correcting inaccurate entries. 

At DOT, officials preferred using the agency's own data because it was 
more detailed and were reported monthly--more frequently than the 
Recovery.gov data. In a focus group involving state transportation 
officials, several echoed the redundancy of reporting systems. These 
officials indicated that having to report to three systems--the 
internal state system, DOT's system, and FederalReporting.gov--
increased their agencies' burden. As we reported in our previously 
mentioned September 2013 report and testimony on federal data 
transparency efforts, the lack of consistent data and standards and 
commonality in how data elements are defined places undue burden on 
federal fund recipients. This can result in them having to report 
the same information multiple times via disparate reporting platforms. 
[Footnote 54] To address this issue, as OMB developed procedures for 
reporting on the use of federal funds, it directed recipients of 
covered funds to use a series of standardized data elements. Further, 
rather than report to multiple government entities, each with its 
own disparate reporting requirements, all recipients of Recovery 
Act funds were required to centrally report into the Recovery 
Board's inbound reporting website, FederalReporting.gov. 

Difficulty of using place-based GIS data for some types of projects. 
While Recovery.gov enabled users to locate Recovery Act projects on a 
block-by-block basis, some of the Recovery Act data did not lend 
itself to the geospatial reporting presentation format on the website. 
For example, according to Recovery Board officials, the website only 
allowed one location to be reported per project even though some 
projects spanned multiple locations. Therefore, if a DOT highway 
project crossed multiple ZIP codes, only one location of performance 
could be reported. Further, certain locations were difficult to map 
such as rural roads, post office boxes, county level data, and 
consultant contractors who worked out of their homes. 

Recipients Were Required to Report Outcome Measure of Jobs Created and 
Retained but Faced Some Challenges: 

The other major performance measure required under the Recovery Act 
focused on the estimate of the number of jobs created or number of 
jobs retained as a result of funding provided by the act. In addition 
to the previously described reporting on funds spent and activities, 
recipients were required in their quarterly reports to estimate the 
number of jobs created or retained by that project or activity. 
[Footnote 55] OMB issued clarifying guidance for recipient reporting 
in June 2009 and recipients began reporting on jobs starting in 
October 2009.[Footnote 56] Among other things, the guidance clarified 
that recipients of Recovery Act funds were to report only on jobs 
directly created or retained by Recovery Act-funded projects, 
activities, and contracts. Recipients were not expected to report on 
the employment impact on materials suppliers ("indirect" jobs) or on 
the local community. Recipients had 10 days after the end of each 
calendar quarter to report. OMB's guidance also provided additional 
instruction on calculating the number of jobs created or retained by 
Recovery Act funding on a full-time equivalent (FTE) basis.[Footnote 
57] 

Recipients faced several challenges meeting these requirements. They 
had difficulty accurately defining FTEs, as various recipients 
interpreted and applied the FTE guidance from OMB differently. 
Further, many recipients struggled to meet reporting deadlines as they 
had little time to gather, analyze, and pass on information to the 
federal government at the end of each fiscal quarter. 

Definitional challenges and discrepancies in reporting FTEs. Under OMB 
guidance, jobs created or retained were to be expressed as FTEs. In 
our November 2009 report we found that recipients reported data 
inconsistently even though OMB and federal agencies provided 
significant guidance and training.[Footnote 58] Specifically, we found 
that while FTE calculations should allow for different types of jobs--
part time, full time or temporary--to be aggregated, differing 
interpretations of the FTE guidance compromised the recipients' 
ability to aggregate the data. For example, in California, two higher 
education systems calculated FTEs differently. One 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. The result was almost a three-to-one 
difference in the number of FTEs reported for each university system 
in the first reporting period. Although the Department of Education 
provided alternative methods for calculating an FTE, in neither case 
did the guidance explicitly state the period of performance of the 
FTE. We recommended that OMB clarify the definition of FTE jobs and 
encourage federal agencies to provide or improve program-specific 
guidance for recipients. Further, we recommended that OMB be more 
explicit that jobs created or retained are to be reported as hours 
worked and paid for by the Recovery Act. In general, OMB and agencies 
acted upon our recipient reporting-related recommendations and later 
reporting periods indicated significant improvements in FTE 
calculations. OMB's guidance changed the original formula and 
consequently, agencies had to rush to educate recipients about the 
changes. Agencies spent extra time and resources that quarter 
reviewing and validating recipient data to reduce errors. In some 
cases, agencies communicated daily with recipients via phone or e-mail 
to ensure their report submissions were accurate. 

Capacity of recipients to meet deadlines. The requirement to regularly 
report on jobs created and retained further strained the capacity of 
some recipients. Recipients only had 10 days after the end of each 
fiscal quarter to determine this information and pass it on to the 
federal government.[Footnote 59] Some state education officials told 
us that deadlines for reporting should have been extended by 1 to 2 
weeks so they were not rushing to input data. One of these officials 
said she was directed by other state officials to put in "the best 
data you have, even if it's not correct…and go back and correct it 
later." City officials also reported concerns with the quick turn-
around time for reporting. For example, one city official stated that, 
in order to meet reporting deadlines, it was necessary to enter data 
manually, which created additional work. The Recovery Board accepted 
these post-correction actions as it extended the quality assurance 
period to provide more time for agencies to review reports and 
recipients to make corrections in FederalReporting.gov. As a result, 
recipients could change their reports up to about 2 weeks before the 
start of the next reporting period. 

Program Specific Performance Measures Varied by Program and Agency 
with Some Focusing More on Outputs than Outcomes: 

The administration required agencies receiving Recovery Act funds to 
submit performance plans that identified additional measures on a 
program-by-program basis. Consistent with existing GPRA requirements 
for agencies to set outcome-oriented performance goals and measures, 
OMB's initial Recovery Act implementation guidance required federal 
agencies to ensure that program goals were achieved. OMB required 
agencies to measure specific program outcome measures, supported by 
corresponding quantifiable output measures, and improved results on 
broader economic indicators.[Footnote 60] In responding to this 
requirement, agencies typically resorted to existing measures in 
their grant programs' performance plans. This information is 
reported by agency and by program within each agency, as opposed to 
government-wide. While Recovery.gov provided a template for 
facilitating the reporting of this information, the level of detail 
and specificity of outcomes varied greatly for some of the agencies 
we reviewed, making it difficult to determine the extent to which 
some were making progress toward their goals and demonstrating results. 

For example, Education's performance plan described the agency's 
accountability mechanisms, the type and scope of project activities, 
and specific program performance measures. With the exception of the 
number of jobs created or retained, Education's plan stated the agency 
was primarily using existing established agency performance measures 
that applied to both Recovery and non-Recovery funds. For example to 
measure the success of one type of education grant fund (specifically, 
Title I of the Elementary and Secondary Education Act of 1965, as 
amended) which the Recovery Act made available to local educational 
agencies, Education used existing agency performance measures, such as 
the percentage of economically disadvantaged students in grades 3 to 8 
scoring at the proficient or advanced levels on state reading and 
mathematics assessments. 

On the other hand, DOT filled out the templates to report on its 12 
programs, and its performance measures were generally less specific 
and outcome oriented. For example, DOT's Capital Assistance for High 
Speed Rail Corridors and Intercity Passenger Rail Service performance 
plan metrics included whether interim guidance was published within 
time frames, the number of applicants received for the program, and 
the number of grants awarded for the program. Further, as we 
previously reported, DOT released a series of performance plans in May 
2009 to measure the impact of Recovery Act transportation programs, 
but these plans generally did not contain an extensive discussion of 
the specific goals and measures to assess the impact of Recovery Act 
projects.[Footnote 61] For example, while the plan for the highway 
program contained a section on anticipated results, three of its five 
measures were the percent of funds obligated and expended and the 
number of projects under construction. The fourth measure was the 
percentage of vehicle miles traveled on pavement on the National 
Highway System rated in good condition, but the plan said that goals 
for improvement with Recovery Act funds were yet to be determined. The 
fifth goal was number of miles of roadway improved, and DOT's plan 
reported that even with the addition of Recovery Act funds, the new 
target would remain the same as previously planned. As a result, we 
recommended in May 2010 that DOT ensure that the results of these 
projects were assessed and a determination made about whether these 
investments produced long-term benefits. DOT did not implement our 
recommendation. 

Concluding Observations: 

Created in response to the recent serious recession, the Recovery Act 
represents a significant financial investment in improving the 
economy. Grant programs were a key mechanism for distributing this 
support. By increasing accountability and transparency requirements 
while at the same time setting aggressive timelines for the 
distribution of funds, the Recovery Act created high expectations as 
well as uncertainty and risk for federal, state, and local governments 
responsible for implementing the law. 

Faced with these challenges, some of these organizations looked beyond 
their usual way of doing business and adjusted their usual practices to 
help ensure the accountability and transparency of Recovery Act funds. 
The oversight community adopted a faster and more flexible approach to 
how they conducted and reported on their audits and reviews so that 
their findings could inform programs of needed corrections before all 
Recovery funds were expended. They leveraged technology by using 
advanced data analytics to reduce fraud and to create easily 
accessible Internet resources that greatly improved the public's 
access to, and ability to make use of, data about grants funded by the 
Recovery Act. These and other experiences, as well as the challenges 
identified in this report, provide potentially valuable lessons for 
the future. Underlying many of these lessons is the importance of 
increased coordination and collaboration, both vertically--
transcending federal, state, and local levels of government--and 
horizontally--across organizational silos within the federal 
community--to share information and work towards common goals. 

One question that remains unresolved is the extent to which good 
practices developed in response to the Recovery Act's special 
challenges and conditions can ultimately be incorporated in everyday 
practice for managing and overseeing grants. Some of the practices 
we found, such as the use of the Recovery Operations Center and 
state readiness reviews, have been able to make this transition. 
Others, such as some of the information sharing networks established 
during the Recovery Act, have had more difficulty in doing so. 
Proposals under consideration by Congress and the administration 
to extend Recovery Act requirements for spending transparency to 
all federal grants suggest that this has been the case for tracking 
dollars.[Footnote 62] Still to be seen is whether it will be possible 
to provide this type of government-wide transparency to other 
measures of performance, such as grant outcomes. 

Agency Comments: 

We provided a draft of this report to the Secretaries of the Departments of
Education, Energy, Housing and Urban Development, and Transportation; and 
to the Director of the Office of Management and Budget. We also provided 
drafts of the examples included in this report to cognizant officials 
from the relevant state and local agencies to verify accuracy and 
completeness, and we made technical changes and clarifications where 
appropriate. The agencies generally agreed with our findings and provided 
technical comments which were incorporated in the report. 

We are sending copies of this report to other interested congressional 
committees; the Secretaries of the Departments of Education, Health 
and Human Services, Housing and Urban Development, and Transportation; 
and the Director of the Office of Management and Budget. In addition, 
the report will be available on our web site at [hyperlink, 
http://www.gao.gov]. 

If you or your staff have any questions regarding this report, please 
contact me at (202) 512-6806 or by email at czerwinskis@gao.gov. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. Key contributors 
to this report are listed in appendix I. 

Signed by: 

Stanley J. Czerwinski: 
Director, Strategic Issues: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To better understand grant management lessons resulting from the 
American Recovery and Reinvestment Act of 2009 (Recovery Act), we 
focused on two key issues involving grant implementation during the 
Recovery Act: accountability and transparency. Specifically, this 
report identifies and provides examples of good practices employed and 
the challenges faced by select federal, state, and local agencies 
implementing grant programs funded by the Recovery Act, in the areas 
of accountability and transparency. 

To obtain a broad view of lessons learned during the implementation of 
grants funded by the Recovery Act, we conducted a detailed literature 
review of relevant reports describing lessons learned from 
implementing grants funded by the Recovery Act from GAO; federal and 
state inspectors general; federal agencies; state and local 
governments; accountability boards; state and local government 
advocacy organizations; think tanks; and academia.[Footnote 61] We 
developed selection criteria to identify relevant federal agencies and 
state and local governments to obtain their views related to the 
implementation of grant programs funded by the Recovery Act. We then 
selected four federal agencies, three states, and two localities based 
on the extent to which they had information related to our focus areas 
of accountability and transparency; information from our colleagues, 
subject matter experts, and academics; and citations in the 
literature. To capture a diverse mix of Recovery Act grants and 
identify potential good practices and challenges, we selected a 
variety of grants--some that had their funding structures already well 
established, others that had their funding greatly increased as a 
result of the Recovery Act, as well as new programs.[Footnote 62] 
Although Medicaid was the largest grant program funded by the Recovery 
Act, we deemed it out of scope for the purposes of this review since 
it is primarily an entitlement and subject to specific rules that are 
not typical of program grants. Further, Medicare and unemployment 
insurance were not included in the recipient reports we examined. 

To obtain illustrative examples of the good practices employed and the 
challenges faced during the implementation of grants funded by the 
Recovery Act related to accountability and transparency, we conducted 
interviews with a wide range of officials and experts. We interviewed 
cognizant officials and obtained supporting documentation from 
government-wide oversight entities at the federal level including the 
Recovery Implementation Office, Office of Management and Budget, and 
the Recovery Accountability and Transparency Board. In addition, we 
interviewed and obtained supporting documentation from select federal 
agency officials from the Departments of Education; Energy; Housing 
and Urban Development; and Transportation; and their respective 
inspectors general. At the state level, we interviewed and obtained 
supporting documentation from agency and audit officials from the 
states of California, Georgia, and Massachusetts. To get a broader 
state perspective, we also interviewed officials from the state 
Recovery Act coordinators'network, which included key state officials 
involved in implementing the Recovery Act from 16 other states.
[Footnote 63] At the local level, we interviewed officials from Denver, 
Colorado and New York City, New York. 

We also interviewed officials from leading state and local advocacy
organizations that were involved in Recovery Act implementation such as
the National Association of State Auditors and Comptrollers, the National 
Association of State Budget Officers, and the National Association of
Counties. We obtained additional information on lessons learned related 
to the Recovery Act from officials representing the Government 
Accountability and Transparency Board, Sunlight Foundation, Council of 
Government Relations, National Council of Non-profits, Center for 
Effective Government, the Federal Demonstration Project, and National 
Association of State Chief Information Officers. In addition, we 
conducted seven focus groups representing a range of federal fund 
recipients.[Footnote 64] Focus groups included: (1) state comptrollers; 
(2) state education and transportation officials; and (3) local 
government officials from both large and small municipalities; 
Each focus group had between four and eight participants who were 
recruited from randomized member lists provided by the recipient 
associations we interviewed. 

Lastly, we reviewed and synthesized information provided in previously 
issued reports related to the Recovery Act that included the following 
sources: our previous work; inspectors general from the Departments of 
Education, Energy, Housing and Urban Development, and Transportation; 
the Recovery Accountability and Transparency Board; the White House; 
and various non-governmental sources including the IBM Center for The 
Business of Government. In addition, we reviewed and applied criteria 
established by HowTo.gov, a source of guidance and leading practices 
for government websites, to Recovery.gov and state and local 
Recovery websites. The scope of our work did not include independent 
evaluation or verification of the effectiveness of the examples we 
identified. We also did not attempt to assess the prevalence of the 
practices or challenges we cite either within or across levels of 
government. Therefore, entities other than those cited for a 
particular practice may or may not have employed the same or similar 
practice, and it is not possible to generalize how prevalent the 
practices and challenges may be across all Recovery Act grants. 

We conducted this performance audit from December 2012 through January 
2014, in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
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 obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Stanley J. Czerwinski, Director (202) 512-6806 or czerwinskis@gao.gov: 

Staff Acknowledgments: 

In addition to the contact named above, Peter Del Toro, Assistant 
Director; Mark Abraham; and Jyoti Gupta made significant contributions 
to this report. Also contributing to this report were Tom Beall, 
Robert Gebhart, Jacob Henderson, Donna Miller, Robert Robinson, 
Beverly Ross, and Andrew J. Stephens. 

[End of section] 

Footnotes: 

[1] Pub. L. No. 111-5, 123 Stat. 115. 

[2] The Recovery Act established multiple mechanisms to provide 
accountability including those aimed at preventing fraud, waste, 
and abuse. According to the Office of Management and Budget's 
(OMB) initial Recovery Act implementation guidance, meeting the 
Recovery Act's accountability objectives included ensuring that 
funds were awarded and distributed in a prompt manner; benefits 
of these funds were reported in a timely manner; and projects 
funded avoided unnecessary delays and cost overruns. OMB further 
specified that a critical accountability objective is ensuring 
funds are used for authorized purposes and instances of fraud, 
waste, and abuse are mitigated. See OMB, Initial Implementing 
Guidance for the American Recovery and Reinvestment Act of 2009, 
OMB Memorandum M-09-10 (2009). 

[3] In 2009, the President and OMB issued memos stating that 
“transparency promotes accountability and provides information 
for citizens about what the Government is doing.” Further, the 
Federal Funding Accountability and Transparency Act of 2006, as 
amended, requires information disclosure concerning entities 
receiving federal financial assistance through federal awards 
such as federal contracts, sub-contracts, grants, and sub-grants. 
31 U.S.C. § 6101 note. Office of Management and Budget, Open 
Government Directive, OMB Memorandum M-10-06 (2009); and Open 
Government Directive–Federal Spending Transparency and Subaward 
and Compensation Data Reporting (2010). 

[4] GAO, Federal Data Transparency: Opportunities Remain to 
Incorporate Lessons Learned as Availability of Spending Data 
Increases, [hyperlink, http://www.gao.gov/products/GAO-13-758] 
(Washington, D.C.: Sept. 12, 2013). 

[5] For additional information on GAO's broad body of work related to 
the Recovery Act, see [hyperlink, http://www.gao.gov/recovery/]. 
External reports we reviewed include studies by the White House, 
Recovery Accountability and Transparency Board, federal Inspectors 
General, IBM Center for the Business of Government, and George Mason 
University. See appendix I for additional information on studies 
reviewed. 

[6] The Recovery Implementation Office, with a staff of not more than 
eight full-time equivalents, was created by Vice President Biden to 
oversee the high-level management dimensions of the Recovery Act. The 
Recovery Accountability and Transparency Board was created by the 
Recovery Act to carry out a wide range of accountability and 
transparency functions. See table 1 for more specifics. 

[7] Recovery Act, § 3(a), 123 Stat. at 116. 

[8] The authority of the Recovery Board was expanded by the 
Consolidated Appropriations Act, 2011, under which the Recovery 
Accountability and Transparency Board was appropriated $28.35 million, 
to carry out title XV of the Recovery Act and to "develop and test 
information technology resources and oversight mechanisms to enhance 
transparency of and detect and remediate waste, fraud, and abuse in 
federal spending." Pub. L. No. 112-74, 125 Stat. 786, 920 (2011). 

[9] Disaster Relief Appropriations Act, 2013, Pub. L. No. 113-2, § 
904(d), 127 Stat. 4, 18. 

[10] Congressional Budget Office, Estimated Impact of the American 
Recovery and Reinvestment Act on Employment and Economic Output from 
October 2012 Through December 2012, (Washington, D.C.: Feb. 21, 2013). 
In January 2010, CBO estimated that the cost of the Recovery Act would 
be larger than originally estimated. Among the factors contributing to 
the higher estimates were higher than anticipated use of entitlement 
programs such as unemployment insurance and nutritional assistance, as 
well as higher than anticipated use of the Build America Bonds program. 

[11] Medicaid is a joint federal-state program that finances health 
care for certain categories of low-income individuals, including 
children, families, persons with disabilities, and persons who are 
elderly. 

[12] An "obligation" is the definite commitment that creates a legal 
liability of the government for the payment of goods and services 
ordered or received, or a legal duty on the part of the United States 
that could mature into a legal liability by virtue of actions on the 
part of the other party beyond the control of the United States. An 
"outlay" is the issuance of checks, disbursement of cash, or 
electronic transfer of funds made to liquidate a federal obligation. 
See GAO, A Glossary of Terms Used in the Federal Budget Process, 
[hyperlink, http://www.gao.gov/products/GAO-05-734SP], (Washington, 
D.C.: Sept. 2005). Spending by the federal government (i.e., funds 
obligated and outlayed) can represent just the first steps of using 
the funds. For instance, the Department of Education makes grants 
to state educational agencies. After the federal government has 
outlayed the funds to the state educational agencies, they may, in 
turn, make grants to local educational agencies, which would then, 
in turn, spend the money on salaries, school facilities, or other 
items. 

[13] Some programs administered by these agencies followed a different 
procedure. For example, some of the Recovery Act funds provided to the 
Department of Transportation were distributed to states and localities 
through the statutory formulas and rules governing existing programs. 
The states and localities retained responsibility for selecting 
projects, which were required to meet additional requirements 
specified in the Act. 

[14] Under the Recovery Act, the Department of Education's SFSF Grant 
authorized three programs--SFSF State Grants, State Incentive Grants, 
and an Innovation Fund. Of the $53.6 billion appropriated for SFSF, 
the Department used $48.6 billion for the State Grants, $4.35 million 
for Race to the Top Grants (authorized under the State Incentive 
Grants), and $650,000 for the Investing in Innovation program 
(authorized under the Innovation Fund). Recovery Act, div. A, §§ 14001-
14012, 123 Stat. at 279-286. 

[15] Although the law gave responsibility to agencies to make 
recipient reports available, recipients actually submitted 
information to a single website operated by the Recovery Board. 
Data were then provided to agencies for review and recipients 
were requested to make any needed corrections. The Recovery 
Board then made the data available on its website, Recovery.gov. 

[16] The Recovery Accountability and Transparency Board is 
comprised of a chairperson appointed by the President and 
inspectors general from the Departments of Agriculture, Commerce, 
Education, Energy, Health and Human Services, Homeland Security, 
Justice, Transportation, and Treasury, and any other inspector 
general designated by the President from any agency that expends 
or obligates Recovery Act funds. 

[17] GAO, Managing for Results: Key Considerations for Implementing 
Interagency Collaborative Mechanisms, [hyperlink, 
http://www.gao.gov/products/GAO-12-1022] (Washington, D.C.: Sept. 27, 
2012); Streamlining Government: Key Practices from Select Efficiency 
Initiatives Should be Shared Government wide, [hyperlink, 
http://www.gao.gov/products/GAO-11-908] (Washington, D.C.: Sept. 30, 
2011); Gulf Coast Rebuilding: Preliminary Observations on Progress to 
Date and Challenges for the Future, [hyperlink, 
http://www.gao.gov/products/GAO-07-574T] (Washington, D.C.: Apr. 12, 
2007); and Catastrophic Disasters: Enhanced Leadership, Capabilities, 
and Accountability Controls Will Improve the Effectiveness of the 
Nation's Preparedness, Response, and Recovery System, [hyperlink, 
http://www.gao.gov/products/GAO-06-618] (Washington, D.C.: Sept. 6, 
2006). 

[18] OMB, Initial Implementing Guidance for the American Recovery and 
Reinvestment Act of 2009, OMB Memorandum M-09-10 (2009). 

[19] Mass. Gen. Laws ch. 7, § 4A(e). 

[20] For a detailed discussion of this and related issues see, Posner, 
Paul L., et. al., Implementation of the Recovery Act: Networks Under 
Stress, George Mason University, Centers on the Public Service, 
(February 2013). 

[21] For more information on the concept of an "outcome broker", 
please see Frank Digiammarino, Can Government Work Like Open Table? 
Innovation in the Collaborative Era (2012), accessed January 22, 2014, 
[hyperlink, http://www.scribd.com/doc/115361546/Can-Government-Work-
Like-OpenTable]. 

[22] OMB, Updated Guidance on the American Recovery and Reinvestment 
Act - Data Quality, Non-Reporting Recipients, and Reporting of Job 
Estimates, OMB Memorandum10-08 (2009). 

[23] An example of an incident command system can be found within the 
Department of Homeland Security's (DHS) National Incident Management 
System, which is intended to provide a consistent framework for 
incident management at all jurisdictional levels regardless of cause, 
size, or complexity of the situation and to define the roles and 
responsibilities of federal, state, and local governments during an 
emergency event. DHS's system has an incident command system component 
designed to coordinate the communications, personnel, and procedures 
of different agencies and levels of government within a common 
organizational structure during an emergency. 

[24] Pub. L. No. 111-352, 124 Stat. 3866. GPRAMA updated the 
Government Performance and Results Act of 1993 (GPRA). Pub. L. No. 103-
62, 107 Stat. 285. 

[25] GAO, Managing for Results: Data-Driven Performance Reviews Show 
Promise But Agencies Should Explore How to Involve Other Relevant 
Agencies, [hyperlink, http://www.gao.gov/products/GAO-13-228] 
(Washington, D.C.: Feb. 27, 2103). 

[26] Digital Accountability and Transparency Act of 2013, H.R. 2061, 
113th Cong. (2013); Digital Accountability and Transparency Act of 
2013, S. 994, 113th Cong. (2013). 

[27] Special Report on The American Recovery and Reinvestment Act at 
the Department of Energy (OAS-RA-09-01, March 2009). 

[28] GAO, Highway Infrastructure: Federal-State Partnership Produces 
Benefits and Poses Oversight Risks, [hyperlink, 
http://www.gao.gov/products/GAO-12-474] (Washington, D.C.: Apr. 26, 
2012). 

[29] GAO, Recovery Act: As Initial Implementation Unfolds in States 
and Localities, Continued Attention to Accountability Issues is 
Essential, [hyperlink, http://www.gao.gov/products/GAO-09-580] 
(Washington, D.C.: Apr. 23, 2009). 

[30] GAO, Recovery Act: States' and Localities' Use of Funds and 
Actions Needed to Address Implementation Challenges and Bolster 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-10-604] 
(Washington, D.C.: May 26, 2010); and Recovery Act: One Year Later, 
States' and Localities' Use of Funds and Opportunities to Strengthen 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-10-437] 
(Washington, D.C.: Mar. 3, 2010). 

[31] [hyperlink, http://www.gao.gov/products/GAO-10-604]. 

[32] GAO, Highlights of a Forum: Data Analytics for Oversight and Law 
Enforcement, [hyperlink, http://www.gao.gov/products/GAO-13-680SP] 
(Washington, D.C.: July 2013). 

[33] GAO, Recovery Act: Funding Used for Transportation Infrastructure 
Projects, but Some Requirements Proved Challenging, [hyperlink, 
http://www.gao.gov/products/GAO-11-600] (Washington, D.C.: June 29, 
2011) and Recovery Act: Planned Efforts and Challenges in Evaluating 
Compliance with Maintenance of Effort and Similar Provisions, 
[hyperlink, http://www.gao.gov/products/GAO-10-247] (Washington, D.C.: 
Nov. 30, 2009). 

[34] Recovery Act, div. A, § 1201(a), 123 Stat. at 212. 

[35] Although the Energy Efficiency Conservation Block Grant was 
authorized in 2007 by the Energy Independence and Security Act of 
2007, it was not funded (and the monies could not be spent) until the 
Recovery Act was enacted in 2009 and therefore is considered a new 
program. 

[36] See [hyperlink, http://www.howto.gov/about-us], accessed December 
12, 2013. 

[37] GAO, Managing for Results: Leading Practices Should Guide the 
Continued Development of Performance.gov, [hyperlink, 
http://www.gao.gov/products/GAO-13-517] (Washington, D.C.: June 6, 
2013). 

[38] See [hyperlink, http://www.mass.gov/recovery/], accessed December 
12, 2013. 

[39] Facebook is a social networking website that allows registered 
users to create profiles, upload photos and video, and send messages. 
Twitter is a social networking microblogging service that allows 
members to broadcast short posts called tweets. Twitter members can 
broadcast tweets and follow other users' tweets on multiple platforms 
and devices. YouTube is a video-sharing website that allows members to 
store and serve video content. Flickr is an image hosting and video 
hosting website that allows users to share and embed photographs. 

[40] A feed is a regularly updated summary of new content that also 
links to the content. The RSS feed allows Recovery.gov to publish 
frequently updated information by syndicating content automatically. 

[41] Tumblr is a microblogging platform and social networking website 
which allows users to post multimedia and other content to a short-
form blog. 

[42] See [hyperlink, http://nycarra.tumblr.com/], accessed December 
12, 2013. 

[43] An API specifies how some software components should interact 
with each other. APIs make it easier for software to interact with an 
outside program like a database or computer service such as a display 
control. 

[44] A widget is an application that allows a website to perform a 
function, ranging from displaying a simple clock to pulling data from 
multiple sources for display. Recovery.gov provides widgets that let 
users display state-level recipient data or search the Recovery.gov 
databases from their own websites. 

[45] When measuring the implementation of Recovery Act, both the 
amount and speed of grant funding can be thought of as output 
measures. These measures typically describe an activity or effort 
including a description of the characteristics (e.g., amount or 
timeliness) established as standards for the activity (in this case 
grant funding). In contrast, outcome measures provide an assessment of 
results compared to the intended purpose to be achieved. 

[46] These reports were submitted to FederalReporting.gov, the central 
governmentwide data collection system for federal agencies and 
recipients of federal awards using Recovery Act funds. 

[47] 31 U.S.C. § 6101 note. 

[48] GAO, Recovery Act: As Initial Implementation Unfolds in States 
and Localities, Continued Attention to Accountability Issues is 
Essential, [hyperlink, http://www.gao.gov/products/GAO-09-580] 
(Washington, D.C.: Apr. 23, 2009). 

[49] GAO, Federal Data Transparency: Opportunities Remain to 
Incorporate Recovery Act Lessons Learned, [hyperlink, 
http://www.gao.gov/products/GAO-13-871T] (Washington, D.C.: Sept. 18, 
2013); Federal Data Transparency: Opportunities Remain to Incorporate 
Lessons Learned as Availability of Spending Data Increases, 
[hyperlink, http://www.gao.gov/products/GAO-13-758] (Washington, D.C.: 
Sept. 12, 2013); and [hyperlink, 
http://www.gao.gov/products/GAO-13-680SP]. 

[50] After the first few quarters of Recovery Act reporting, the 
system stabilized so recipients generally only needed to update a few 
data fields each cycle. 

[51] OMB staff agreed that the Government Accountability and 
Transparency Board's early plan provides an initial strategy and added 
that multiple initiatives are under way. One of these initiatives is 
the administration's fiscal year 2014 budget proposal that would 
operationalize comprehensive transparency through the transfer of 
USAspending.gov from the General Services Administration to the 
Department of the Treasury. 

[52] This report was issued by the Department of the Interior OIG 
on behalf of the Recovery Board and included input from sixteen 
agencies and their OIGs. For more, see U. S. Department of Interior, 
Office of the Inspector General, Lessons Learned from the Recovery 
Act: An Agency and OIG Retrospective, Report No. RO-SP-MOI-0008-2012 
(Washington, D.C.: May 2013). 

[53] See [hyperlink, http://www.gao.gov/products/GAO-12-913T]. 

[54] [hyperlink, http://www.gao.gov/products/GAO-13-871T] and 
[hyperlink, http://www.gao.gov/products/GAO-13-758]. 

[55] Recovery Act, div. A, § 1512(c)(3)(D), 123 Stat. at 288. 

[56] These reporting requirements applied only to nonfederal 
recipients of funding, including all entities receiving Recovery Act 
funds directly from the federal government such as state and local 
governments, private companies, educational institutions, nonprofits, 
and other private organizations. 

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

[58] 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, 
http://www.gao.gov/products/GAO-10-223] (Washington, D.C.: Nov. 19, 
2009). 

[59] According to a senior Recovery Board official, in an effort to 
accommodate weekends and holidays, the Recovery Board regularly 
allowed recipients 14 days to submit their data to 
FederalReporting.gov. 

[60] See OMB Memorandum M-09-10 (2009). This information was to be 
provided by all agencies receiving Recovery Act funds, covering each 
grant program using these funds, in the agencies' “Recovery Program 
Plans” submitted to OMB. Initially due on May 1, 2009, the plans 
were to be updated by the agencies as needed and were to be 
published on Recovery.gov as well as agency websites. These plans 
included information on each Recovery Act program's objectives, 
activities, delivery schedule, accountability plan, monitoring 
plan, and program performance measures. 

[61] GAO, Recovery Act: States' and Localities' Use of Funds and 
Actions Needed to Address Implementation Challenges and Bolster 
Accountability, [hyperlink, http://www.gao.gov/products/GAO-10-604] 
(Washington, D.C.: May 26, 2010). 

[62] Digital Accountability and Transparency Act of 2013, H.R. 2061, 
113th Cong. (2013); Digital Accountability and Transparency Act of 
2013, S. 994, 113th Cong. (2013). 

[63] External reports reviewed include Khademian, Anne and Sang Choi, 
Virginia's Implementation of the American Recovery and Reinvestment 
Act: Forging a New Intergovernmental Partnership, IBM Center for the 
Business of Government (2011); DeSeve, G. Edward, Managing Recovery: 
An Insider's View, IBM Center for the Business of Government (2011); 
Posner, Paul L., et. al., Implementation of the Recovery Act: Networks 
Under Stress, George Mason University, Centers on the Public Service, 
(February 2013); U.S. Department of the Interior, Office of Inspector 
General, Lessons Learned from the Recovery Act: An Agency and OIG 
Retrospective, RO-SP-MOI-0008-2012 (Washington, D.C.: May 2013); White 
House, A New Way of Doing Business: How the Recovery Act is Leading 
the Way to 21st Century Government, (February 2012); Rojas, Francisca 
M., Recovery Act Transparency: Learning from States' Experience, IBM 
Center for the Business of Government (2012); Callahan, Richard, 
Sandra O. Archibald, Kay A. Sterner, and H. Brinton Milward, Key 
Actions That Contribute to Successful Program Implementation: Lessons 
from the Recovery Act, IBM Center for the Business of Government 
(2012); U.S. Department of Energy, Office of Inspector General ,Office 
of Audits and Inspections, Lessons Learned/Best Practices during the 
Department of Energy's Implementation of the American Recovery and 
Reinvestment Act of 2009, OAS-RA-12-03 (Washington, D.C.: January 
2012); and, U.S. Department of Housing and Urban Development, Office 
of Inspector General, American Recovery and Reinvestment Act Lessons 
Learned Initiative, Memorandum No.: 2013-IE-0801, (October 18, 2012). 

[64] The specific grants we focused on were: at DOE, Energy Efficiency 
and Conservation Block Grant and the Weatherization Assistance 
Program; at DOT, Transportation Investment Generating Economic 
Recovery (TIGER) grants and the Federal Aid Highway Program; at HUD, 
Community Development Block Grants and the Tax Credit Assistance 
Program; at Education, Race to the Top grants, and the State Fiscal 
Stabilization Fund. 

[65] The states represented in the State Coordinators' Network meeting 
were Arizona, Arkansas, Delaware, Florida, Maryland, Michigan, 
Minnesota, Missouri, Nebraska, Nevada, Oregon, Rhode Island, 
Tennessee, Texas, Utah, and Wisconsin. 

[66] Results from nongeneralizable samples cannot be used to make 
inferences about a population. 

[End of section] 

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