“It Takes Time to Coordinate”

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We’ve written about the headaches associated with the supplemental SWCAP process that states must use in order to recover some of their costs associated with administering federal stimulus dollars. But we thought that given the importance of this issue to the states, a little more background was in order. We turned to Clark Partridge, the helpful state comptroller in Arizona to take us through the story.

“In March, [2009]” he explained, “we had a conference of state comptrollers for NASACT. Very quickly it became clear and apparent that there was a major strategic weakness embedded in ARRA: there was money for the Recovery Activity and Transparency Board and for OMB, but not money to do these central oversight things at the state level.”

States worked with OMB to rectify that problem, but still didn’t receive guidance on how to apply SWCAP to stimulus dollars until mid-May 2009. As with any big program, that initial guidance had some wrinkles that needed to be ironed out before it could be effective. It wasn’t until summer that the situation was fully clarified, says Partridge.

AZ State Capitol Building

Of course, by that time, many state operations were already rolling. That created a problem not only in trying to adequately track how much time and resources were being spent managing the Recovery Act  prior to clear guidance—awfully hard when you aren’t sure exactly how you’ll be asked to track those expenditures—but also because, as Partridge explains, many state agencies were pushing money out the door quickly. So quickly, in fact, that Partridge figured all that money would be spent long before his office could recover their supplemental SWCAP costs. Much of the money would be spent within a year, while the reporting and managing could take three. (OMB finally agreed that estimated ARRA-specific costs could be “pulled forward” into the current year.)

What’s more, state agencies were often dealing with guidance that conflicted with what they were hearing from OMB. “They were receiving instructions from their federal agencies,” says Partridge. “Some of that was not the top of the federal agencies who were working with OMB. Some was from regional federal agency offices–quite a ways removed from the OMB.”

“It takes time to coordinate all those things,” he explains, “they are all brand new issues.”

When all was said and done, Arizona’s supplemental SWCAP plan was finally submitted in August and approved in October. And that isn’t the end of the story.

Just days before the state’s plan was approved, the federal Department of Education made some adjustments in allowable state expenses. Arizona didn’t even find out about those changes until December and was still trying to sort things out in the new year.

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