OMB Releases Updated Guidance on Stimulus Reporting Requirements

Since the President signed the American Recovery and Reinvestment Act of 2009 (ARRA) more than a year and a half ago, recipients of the spending portion (as opposed to tax benefits) of the $862 billion in federal funds distributed under the law have been required to fulfill strict reporting requirements. Though these reporting requirements have been somewhat controversial, they represent one of the most significant efforts undertaken by the government to track federal funds. Late last month, the Office of Management and Budget (OMB) released new guidance on those requirements to make them more clear and to ensure the information that gets collected is more complete and transparent. OMB also confirmed that new federal funds provided through the recently passed Education Jobs Fund are subject to the same reporting requirements as ARRA funds.

At Ed Money Watch, we’ve had concerns about ARRA reporting all along. Thus far, we have found that the current reporting rules do not allow for detailed information on local uses of funds and provide inadequate space for state government’s to report their data. Additionally, the U.S. Department of Education (ED) has further weakened the reporting system by providing states with generic language intended to simplify the reporting process. These issues mean that much of the data on ARRA spending reported by states and local school districts lacks the level of specificity originally intended.

The new OMB guidance addresses many of the issues we’ve noticed in the past. While the new guidance does not require every sub-recipient (school districts and institutions of higher education) to submit their own detailed reporting information, it does require states to collect and report this information as a prime recipient under the “Quarterly Activities/Project Description for Prime and Sub-recipients” field. As we under stand it, this means that the public will be able to better tell how ARRA funds under a specific program are being used across the state. However, it will still be difficult under the revised rules to determine how each sub-recipient is using its specific funds. It is also unclear whether the current reporting system provides enough space for prime recipients (state governments) to report this information.

We are also glad to see that the new guidance strengthens quality control measures in the reporting system. Currently, all federal departments reviews recipient reported data for the programs they oversee. The new guidance instructs these agencies (like ED) to label reports as having “Significant Errors” or “Material Omissions” if descriptions of awards are misleading or unclear. Additionally, grantees submitting incomplete or misleading reports would be required to correct them after the fact.

Finally, the new guidance warns agencies like ED that distribute the ARRA funds against encouraging grantees to use generic language for their narrative descriptions. Prime recipients (states) would be required to write more detailed and specific descriptions of their projects, providing more useful information about how ARRA funds are being spent. According to OMB, members of the general public should be able to understand the grant’s purpose, activities, and outcomes through the description provided under the “Award Description” and “Quarterly Activities/Project Description for Prime and Sub-recipients” fields.

While the new OMB guidance addresses many of the issues we highlighted in the reporting of stimulus spending data, it still is imperfect for reporting information on education spending. School districts and institutions of higher education had almost total control over how the ARRA education funds were actually spent. Requiring states, as the prime recipients, to do the bulk of the reporting has obscured important details on how sub-recipients spent the funds. And with the new Education Jobs Fund, which provides an additional $10 billion that will be tracked through this system, we will likely lose more valuable information due to this flawed system. That said, the new guidance does provide some assurance that state-level reporting will include more and better information on ARRA and Education Jobs Fund spending.

Check back with Ed Money Watch as states begin to tackle this newest iteration of federal ARRA reporting.