Stimulus spenders race to the finish line

State and local recipients of stimulus law funding are scrambling to meet a deadline of Oct. 10 for filing the first detailed reports on how they are spending the money. But beating the clock is just one of their concerns.

The spending reports required by the American Recovery and Reinvestment Act are ushering in new and more complex challenges in fulfilling President Barack Obama’s transparency goals. “There is a tension between the ambitions of the act and the process of running a project this large,” said Thomas Lee, a technology director at the Sunlight Foundation, which is part of the Coalition for an Accountable Recovery.

Experts say federal and state authorities are likely to encounter problems with data quality, lack of compatibility in data formats and gaps in data searchability. They also face competition from private reporting services and must choose between deploying shiny new reporting tools or revitalizing older electronic systems.

Federal officials and vendors, including IBM, Microsoft and SAP Public Services, have been working with state and local clients to address some of the challenges. But now it is crunch time.

“There is so much data, and no one has done anything like this before,” said Jerry Brito, a senior research fellow at George Mason University’s Mercatus Center. “There are so many localities with different levels of capabilities.”

“The filing of the reports will be a high-profile event in the Obama administration’s transparency agenda,” said Craig Jennings, senior federal fiscal policy analyst at OMB Watch, which is also a member of the accountability coalition. “It could be great, or it could be an absolute mess.”

OMB and vendors step in

The stimulus law provides $787 billion in funding for roads, energy, health records, broadband and a host of other programs to help boost the economy. The Office of Management and Budget has released several sets of guidelines telling federal agencies how to report spending under the stimulus law.

State and local prime recipients and a single layer of subrecipients are required to register with and submit reports to the FederalReporting.gov Web site. They must describe their projects, the amount of money spent and the number of jobs created, among other details, by Oct. 10. Officials will review that data and publish it on another federal Web site, Recovery.gov, by the end of October so the public can access the information.

Nearly 200,000 recipients were expected to register, but as of early September, only about 14,000 had done so, prompting OMB to release a memo Sept. 11 that offers to send teams of advisers to states. In addition, a new, more interactive version of Recovery.gov is scheduled to go online by Oct. 10.

Meanwhile, major IT companies have stepped up to help agencies comply with the new rules. “There has been a spike of activity on the stimulus reporting,” said Carol Brubaker, director of strategic policy and programs at Microsoft. “The states are working diligently to fulfill the requirements.”

“It is a new and complex reporting environment, and it is understandable that many people need help with how to approach that,” said Mark Cleverley, director of strategy for global government industry at IBM.

Concerns about data quality

Even so, several challenges have yet to be addressed. For example, transparency advocates predict that data quality will be as much of a concern at Recovery.gov as it is at USAspending.gov, which Congress established in 2006 to provide visibility into federal spending. That site has been plagued with problems such as errors, missing data and mislabeled data.

The track record on data quality is disappointing, Jennings said. A pilot project to initiate subrecipient reporting on USAspending.gov was not successful, and similar problems can be expected to occur on Recovery.gov, he added.

“At the outset, the data will not be good,” Jennings said. “There will be confusion and technical issues. The states do not have the resources to make sure these data are correct.”

Furthermore, no central authority is responsible for overseeing data quality for Recovery.gov, and there is no reason to believe federal agencies will do a better job of providing accurate and complete data than they have for USAspending.gov, Lee said.

“There is diffuse responsibility for ensuring data quality,” he added. “I think there is reason to worry about missing records.”

Earl Devaney, chairman of the oversight board, told a Senate panel Sept. 10 that despite OMB’s guidance, there are still concerns about data quality and data integrity.

“These obstacles will need to be overcome,” Devaney testified before the Senate Homeland Security and Governmental Affairs Committee. “If recipients do not report the required information for whatever reason — mistake, neglect or willfulness – the data on Recovery.gov will not be as insightful as it should be.”

States are due to receive subrecipients’ reports by Oct. 10 and will have 10 days to review them, but there still might be gaps and missing data, Jennings and Lee said.

However, some steps have been taken to ameliorate those problems. For one, the Recovery Accountability and Transparency Board, which operates Recovery.gov, will review the data for at least 10 more days before making it publicly available at the end of October.

“That is a positive development,” Jennings said.

Also, after the data becomes public, citizen input will help identify mistakes and make corrections, he said, adding that “the quality will get better over time.”

Resolving the technical difficulties

Incompatible data formats are also a problem. Some federal and state agencies have advanced systems that use Extensible Markup Language while others are gathering data in spreadsheets and PDFs.

“There is a large range of capability,” said Sherry Amos, director of industry strategy at SAP Public Services. “Some organizations are well prepared, and others are not prepared at all.”

Vendors are offering solutions to deal with those problems. Some states are going beyond Recovery.gov’s requirements and asking vendors for more comprehensive capabilities that deliver more structured data so they can better judge performance and flag potential fraud and abuse problems, she added.

Furthermore, FederalReporting.gov allows states some flexibility in the formats in which they submit data.

“FederalReporting.gov is providing some good infrastructure to take the data in different formats,” Brito said. “Still, this is a huge burden on the locals to take all the data, format it and upload it to the federal Web sites.”

In addition, experts have raised concerns about searchability, specifically about Dun and Bradstreet’s proprietary Data Universal Numbering System database, which is a core element in identifying corporate and nonprofit entities on Recovery.gov. OMB Watch has called attention to limitations on search, accuracy and completeness caused by the lack of public access to the full DUNS database. Dun and Bradstreet officials say they constantly update the database and work with clients to provide access.

Nonetheless, having a privately owned database within Recovery.gov strikes some transparency advocates as the wrong approach. “Given the choice, I’d prefer an identifier that is not proprietary,” Brito said.

A question of priorities

Recovery.gov faces some stiff competition from nongovernment sites that are seeking to offer the same information. For example, Onvia operates Recovery.org as a marketing project with data similar to what Recovery.gov is collecting. It has won kudos from Sen. Susan Collins (R-Maine), who recently remarked that “progress on Recovery.gov initially has been slow…particularly when compared to some private-sector alternatives.”

Some advocates have also raised questions about priorities. Lee wonders why the administration is launching new Web sites such as Recovery.gov while an older reporting project, USAspending.gov, suffers from data quality issues.

“Data quality has been a problem for years, so why do we keep getting new Web sites instead of addressing these priorities?” Lee asked.

But he and others are also eager to see Recovery.gov take transparency to the next level.

“I hope that Recovery.gov is a success and that the lessons and principles can be applied to systems like USAspending.gov,” he said.