GAO finds confusion among recipients of stimulus transportation funds

Recipients of transportation and infrastructure contracts and grants were confused about how to count the number of jobs saved or created by federal stimulus funds, resulting in different reporting methodologies, the Government Accountability Office reported during a hearing on Thursday.

In October, tens of thousands of recipients of stimulus funds through the Transportation Department reported to the Recovery Accountability and Transparency Board that they had saved or created more than 46,400 direct jobs. But GAO has raised some doubt over the accuracy of those numbers.

"Through our ongoing audit work, we continued to find confusion among recipients about how to calculate the numbers of jobs created and saved that is required by DoT and [the Office of Management and Budget] for their reporting requirements," Katherine Siggerud, managing director of physical infrastructure at GAO, told the House Transportation and Infrastructure Committee.

The watchdog agency found several state and local transit agencies unsure of how, or if, to calculate the effect on jobs of purchasing new equipment such as buses.

For example, the Federal Transit Administration held an outreach session in September with representatives from bus manufacturers and the American Public Transportation Association to standardize the methodology and to clarify the reporting requirements. But, after developing a common formula, the information apparently did not reach all recipients.

"Representatives from two bus manufacturers reported not knowing about the FTA methodology and used their own measures for jobs created or retained," according to GAO's testimony.

Another area of confusion among stimulus recipients involved the formula used to calculate full-time job equivalents, reported GAO. In Pennsylvania, four transit entities used four denominators to calculate the number of full-time equivalent jobs they listed on their reports, according to the agency. It found similar instances of confusion in other states it reviewed.

In recent weeks, multiple reports have raised doubts on the accuracy of the jobs figures reported on the government's stimulus Web site, Recovery.gov.

Deputy Transportation Secretary John Porcari, however, was more optimistic about the jobs numbers reported by the department's stimulus fund recipients. He argued that while some mistakes were found -- one state accidentally miscoded 1,200 jobs as relating to Veterans Affairs Department funding -- overall, "recipients did an excellent job in responding to this data request with more than 96 percent of recipients responding."

Porcari said the 46,000 jobs number reported by Transportation Department recipients was likely very conservative because they did not include indirect jobs that resulted from increases in supply chains, equipment and other supporting services.

"When these factors are taken into account, the impact of these jobs has a ripple effect creating many more jobs than those reflected as direct jobs," he said. "We expect that the recipient reporting process will continue to improve as we prepare for the next reporting cycle in January."

House Transportation and Infrastructure Committee Chairman James Oberstar, D-Minn., calculated that 7,886 highway and transit projects have created nearly 630,000 direct, indirect, and induced jobs.

The Recovery Act provided $64.1 billion in transportation and infrastructure investment. As of Nov. 30, federal, state and local agencies have announced 14,654 projects totaling $44.7 billion, representing 70 percent of the total available funds, the committee said.

The majority of Transportation funds, $27.5 billion, were targeted at highways and bridge repair. More than three-quarters of those funds have now been obligated nationwide, department officials said.

Despite the rapid spending, as of November, there are still 1.78 million unemployed construction workers across the country, according to committee documents. Within the overall construction sector, seasonally adjusted employment in heavy and civil engineering construction has fallen by 172,700 since the recession began in December 2007. The number of unemployed construction workers, however, actually has decreased by 245,000 since February, the committee said.

The Transportation Construction Coalition, a national trade association, recently reported that 63 percent of contractors laid off employees in 2009, and 44 percent indicated they plan to lay off employees in 2010.

"To offset the continued rise in construction unemployment, the collapse of the private construction market, and state budget crises that limit states' ability to finance highway and transit projects, we must act now to provide additional investments for ready-to-go highway and transit projects," Oberstar said.