Administration alters stimulus job counting formula

Any existing job funded with stimulus money now will be counted as a job saved, whether it was endangered or not, according to new guidance issued on Dec. 18 by Office of Management and Budget Director Peter R. Orszag.

The memo aims to simplify the original formula that the government required Recovery Act recipients to use to determine whether a job was saved by stimulus funds. The new guidance, however, also will make it more difficult for the public to determine exactly how many jobs the Recovery Act has preserved.

Until now, the Obama administration had asked stimulus recipients to determine how many jobs were saved by the stimulus. The requirement caused confusion among some recipients and a number of embarrassing reporting mistakes.

But the memo clarifies that policy, defining a job retained as any existing position funded by the Recovery Act during the previous reporting quarter. Jobs funded partially with stimulus funds will be counted based on the proportion funded by the Recovery Act.

Stimulus watchdogs applauded the change but noted that it likely will result in some jobs being attributed to the Recovery Act that were not endangered.

"The tricky part is deciding whether a job would be lost or not," said Craig Jennings, senior federal fiscal policy analyst for the watchdog group OMB Watch. "It's impossible to know the alternate universe in which an employer did not receive Recovery Act funds."

Jennings said the reporting change is wise because it takes the judgment out of the hands of recipients by providing a clearer definition of jobs saved or retained. For example, Chrysler received $53 million in stimulus money but reported zero jobs created or saved because it used an existing workforce that it determined was not in danger of losing jobs. Using the new guidance, any Chrysler employee whose job was funded by the stimulus during that quarter now would be included.

"I have to applaud OMB's political braveness," Jennings said. "This change certainly will open the Obama administration up to attacks that they're changing the rules in the middle of the game just to get higher job counts. It might do that and it might not, but at the end of the day this is just a better way to get more accurate job counts."

"These changes are designed to make definitions clear, simplify the process, and increase accuracy so we achieve the transparency and accountability the process was designed to promote," wrote OMB spokesman Tom Gavin in an email.

The memo also simplifies the manner in which job estimates are calculated and reported. Previous OMB guidance told recipients to report job estimates cumulatively. But "a significant number of recipients expressed concern with the complexity of the multiple steps involved with this formula," Orszag wrote.

Recipients no longer will be required to add various data on hours worked across multiple quarters when calculating job estimates. Reporting estimates, he said, now will be performed on a quarterly basis.

More than half the 24-page memo instructs recipients on job creation estimates, including examples of possible job reporting scenarios. The document includes a worksheet that provides step-by-step directions on calculating full-time equivalent jobs.

Orszag said the changes reflect lessons learned during the first reporting period, which ended on Sept. 30, and incorporated recommendations suggested in November by the Government Accountability Office.

But watchdog groups argued that OMB should go even further in clearly defining a job.

"This guidance leaves unchanged the fact that recipients decide what a job is," Jennings said. "It could be a 30-hour per week job; it could be a 45-hour per week job. Recovery Act watchers are comparing apples to oranges when they compare FTEs for different recipients."

Jennings said OMB should require recipients to simply report the number of work hours funded by Recovery Act dollars. "This will allow equal comparisons between recipients and provide a more accurate picture of Recovery Act employment," he said.

The OMB guidance also suggests how federal agencies can encourage better reporting data from recipients and detect inconsistencies and errors.

While a specific methodology regarding the review of recipient data quality is not required, agencies now must establish data quality plans that articulate their review process to, at a minimum, focus on significant reporting errors and material omissions, the guidance said.

The memo -- delivered a week before Christmas and days before a major blizzard hit the Washington region -- could be too late to filter down to all Recovery Act recipients before the next reporting cycle begins on Jan. 1.

In another major change, announced last week by the Recovery Accountability and Transparency Board, recipients will be able to make corrections to their filings on a regular basis throughout each quarterly reporting period.

For example, from Feb. 2, 2010, through March 31, 2010, recipients will have the ability to correct data for the quarter ending Dec. 31, 2009. The government's stimulus Web site, Recovery.gov will post corrected data publicly every two weeks, beginning on Feb. 10.

In the first reporting period, recipients had a 20-day window to correct mistakes in their award reports. But Recovery Board Chairman Earl Devaney said the change "should vastly improve the quality of recipient data."

The board also reported last week that more than 4,300 entities receiving stimulus funds failed to report their spending. The public now can download a list of those recipients from Recovery.gov. Users also can view reports included in the October database.