Report finds room for improvement in Recovery Act transparency

The Obama administration has made progress in developing a transparent system for tracking hundreds of billions of dollars in Recovery Act funds, but significant gaps in recipient reporting and performance measurement persist, according to a watchdog group.

"It appears the Obama administration is putting in place a system that will serve the public well -- and may be a model to learn from as meaningful disclosure is brought to annual federal spending," the nonprofit group OMB Watch said in a report released on Thursday. "Even so, as of today, the federal government's efforts to make Recovery Act spending fully transparent and accountable still have a long way to go."

Information the Obama administration is collecting from stimulus recipients is not comprehensive enough to meet the pledge that "every American will be able to go online and see where and how we're spending every dime," the watchdog found.

Office of Management and Budget guidance requires prime recipients and first-tier subrecipients of stimulus funds to submit spending reports to FederalReporting.gov, a central data collection system. Subrecipients that issue funds directly to a vendor also must file reports. But money disbursed to a second subrecipient -- for example, a town or municipality -- is exempt from the requirements.

"Lurking beneath the current required level of reporting could be a host of ethical and accountability issues, which will be hidden from public view because of the OMB guidance," OMB Watch stated. "Ideally, OMB should require that every last recipient report directly to FederalReporting.gov, giving the public a full picture of every company that has benefitted from the Recovery Act."

Large Recovery Act projects are likely to have several layers of subawards, the report stated. For example, the Energy Department has allocated $132 million to North Carolina for its Weatherization Assistance for Low-Income Persons program. If the state hired a contractor to implement the program, that would be reported. But, if the state gave a portion of those funds to the city of Raleigh, which then hired a contractor to implement the program, the identity of that company would not have to be disclosed, the report said.

OMB declined to comment on the report. But the agency has downplayed the likelihood of multiple subrecipients. OMB Deputy Director Robert Nabors told a congressional panel in July that 95 percent of all Recovery Act dollars subject to the reporting requirements would be captured through the guidance and only a small percentage of funding will go through more than one subrecipient.

The board overseeing Recovery Act implementation has said the most comprehensive spending data will be available in about one month on the revamped Recovery.gov. The board plans to launch the redesigned Web site by Oct. 5.

The OMB Watch report also called on the administration to require state and local governments to be more transparent in how they select contractors for stimulus projects. The group said all requests for proposals and bids from interested contractors should be made available to the public, with redactions of sensitive information.

Although lawmakers and administration officials have identified a number of specific benchmarks they expect to achieve with Recovery Act funds, OMB does not yet require the collection of performance data on stimulus projects, the report noted.

While it might be impractical for OMB to dictate performance measures for every federal project, the report recommended the administration set standards for the types of data that must be collected, and when that information will be available to the public. OMB also should set metrics to determine if funds are being spent fairly, the group stated.

"In addition to knowing how many miles of road were paved, which is an example of performance data, it is important to know which roads are being paved and if these roads are helping to connect disparate communities," the report stated. "Such information will help the government and watchdog groups answer the question of whether this is an equitable recovery."

The watchdog also suggested Recovery Act jobs data include information on wage levels, availability of health coverage and employee demographics.