“It didn’t seem worth going through that headache. . . .”

April 20, 2010 by

All the money going to states for the federal stimulus needs to be managed, tracked, and reported. That oversight costs money. The federal government did come up with one means for recovering some of that overhead. But the states aren’t all so happy about it.

The so-called supplemental Statewide Cost Allocation Plan, or SWCAP (it rhyme with skycap) allows states to shift a portion of the programmatic federal funds they receive to cover the cost of administering those funds. It’s not a huge chunk of cash: only one-half of one-percent of the total spending.

SWCAP has actually been around awhile as a way for states to recoup the dollars spent administering federal programs. But when it comes to the stimulus process, it’s particularly problematic. For one thing,  there’s no prior experience on which to base estimates of these expenses, unlike most other federal programs. What’s more, because of the narrow window of time in which ARRA will exist, working out how to deal with over- or underestimates two years down the line could give state administrators nightmares.

And states can’t simply switch the funds from the program bucket to the oversight bucket. They need to get federal approval for their administrative costs. And that process can be onerous—so much so that some states have chosen not to do it. Mike Schaub, of Washington state’s Office of Financial Management, explains that recovering the administrative expenses through SWCAP would have meant more paperwork and changing a lot of timekeeping and other practices in his office. “It didn’t seem worth going through that headache,” he told us

Don Winstead

Even states that are going through the SWCAP process have mixed feelings about it. Florida stimulus czar Don Winstead said, “SWCAP is not a very satisfactory solution for us, but it is the only option available. I’m not a big fan of taking money away from services to spend on administration.”

That might sound a bit like sour grapes—these are, after all, all funds that Florida wouldn’t have had otherwise. But because of the transaction costs of the SWCAP process itself, states using SWCAP are really trading a dollar worth of programs for less than a dollar of administrative funds. And that fact makes us a good deal more sympathetic to Winstead’s point.

We wonder if this problem will grow more challenging as states turn their attention from managing spending to measuring the impact of the dollars spent. If counting jobs and building websites pushes states to the limit, how will they have the capacity and wherewithal to measure programmatic and social outcomes? “Could you put together a sophisticated analysis?” asks Wyoming’s Lynne Boomgaarden. “Sure, but it would take resources and people.”

[Stay tuned: In the coming weeks we’ll likely have a piece or two on how the SWCAP process was chosen for ARRA oversight cost recovery and why the timeline itself dissuaded some states from applying for supplemental SWCAP funds.]


The cloud inside the silver lining

April 19, 2010 by

Curiously, sometimes having more money available for an entitlement program – through ARRA, for example –  can actually mean that while access improves, quality of service declines on certain measures.

Stimulus dollars have been used across the country to expand the Supplemental Nutrition Assistance Program (formerly known as food stamps).  But the  Texas auditor’s office discovered that with the increased case loads, wait times for applicants have gone way up. In 2006, 92 percent of applications were processed in a timely way, according to the audit. In the first part of Fiscal year 2010, that number had fallen to less than 70 percent.

One of the problems cited in the report is the fact that many of the workers hired to serve the growing population of food stamp recipients are new. Those who have less than two years experience are now 41 percent of the front line workforce – compared to four percent in Fiscal year 2005.

We wonder. Are these problems unique to Texas. Or does the Texas experience reflect what’s happening in other states as well?

Shedding (tiny little bits of) light on ARRA

April 16, 2010 by

For people concerned with the Recovery Act, the principal website, Recovery.gov is pretty much the world’s capital for information. With that in mind, we’re eagerly waiting to see whether Edward Tufte, a new member of the advisory panel for the Recovery, Accountability and Transparency Board, will guide the board toward exciting new ways of presenting information on the Recovery.gov website.  We’ve seen his work in the past, and – in our opinion – he’s a brilliant guy.

Last month, Tufte was on NPR’s  “On the Media” program, which described him as “the country’s foremost evangelist for the clean, clear and rich presentation of complex information.”

In this six-minute conversation with interviewer Bob Garfield, Tufte indicated that he’s already had some influence on the website.  “The first thing I said about a year ago when I met with them for the first time is that their model should be a first-rate news website,” he said. “Once we got the news metaphor and got the intense mapping, that’s halfway there.”

What’s next on Tufte’s agenda? “What I would most like to do is to make some additional things that are worthy of the zip code map and the data. One idea that I’ve been thinking of is called a flashlight map, and so you see a kind of dark blue United States with nothing on it, and then the dots, the little lights come on as each project started. That shows the spatial distribution, over time, of the stimulus projects.”

Sounds cool to us. We like sparkling little lights.

A Stark Difference

April 16, 2010 by

This week, the Council of Economic Advisers released its third quarterly report (for Q1 2010) on the impact of the federal stimulus with respect to jobs created or saved. The headline numbers: ARRA stimulated between 2.2 and 2.8 million jobs.

NPR’s blog “The Two-Way” pointed out that adding those jobs to the March unemployment figures suggests that there could have been 5 million more people out of work in March 2010 than in March 2009, if not for the stimulus.

The Council is careful to note the challenge of accurately estimating the effects of a large policy like ARRA. In the Daily Brief on Portfolio.com, Sarah Krouse writes, “The report said the stark difference between the White House calculations and recipient-reported data — which estimated a total number of 1.2 million jobs created or saved through the fourth quarter of 2009 — is the result of several factors, including the fact that reporting requirements only apply to about a third of ARRA funding and the direct spending parts of the stimulus requiring reports are moving slower than other portions of the stimulus.”

Cash for Clunkers: Digging Deeper

April 15, 2010 by

The debate over the economic benefits of last summer’s “Cash for Clunkers” program continues. Recently, the White House blog and Edmunds.com exchanged salvos in the argument.  But the economic benefits are only one part of the question. Examining performance metrics other than economic impact — such as the environmental benefits — sheds additional light on what exactly Cash for Clunkers accomplished.

Happily, fedgazette editor Ronald A. Wirtz  has a piece on the website of the Federal Reserve Bank of Minneapolis that digs  into data regarding some of the fuel efficiency savings that the country could gain from Cash for Clunkers.

Wirtz looked at the program in Minnesota, Montana, North Dakota, South Dakota, Wisconsin and the Upper Peninsula of Michigan. He found that gas efficiency gains were genuine, but the devil was in the details. Explained Wirtz:

“Average fuel efficiency between trade-ins and newly purchased vehicles rose about 50 percent, from roughly 15.5 miles per gallon to 24.

“But that covers up a lot of variation, part of which suggests a sop to owners of older, typically larger vehicles who used the opportunity to upgrade to something with only marginally better gas mileage.

“For example, about one quarter of the new vehicles purchased through the clunker program in the Upper Peninsula and the Dakotas had fuel efficiency gains of four miles per gallon or less. In many cases, older trucks and SUVs were simply traded in for newer but only marginally more fuel-efficient versions. Only 10 percent of all vehicles bought in the district under the program got 30 mpg or better.”  (see Chart 1).

The gains shouldn’t  be brushed aside, of course. As Wirtz is careful to note, even seemingly small fuel efficiency upgrades can save enormous amounts of fuel, which becomes more evident when using “Gallons per Thousand Miles” rather than “Miles per Gallon.”

Speeding up Weatherization: Michigan’s Solution

April 14, 2010 by

The GAO has documented that almost 90 percent of homes set to be weatherized are subject to historical preservation review. Whether or not they had that startling number in front of them, officials in Michigan’s  State Historic Preservation Office (SHPO) saw that they were confronting an enormous obstacle to getting weatherization money out. In Michigan alone, 34,000 homes would be affected and would need review.

Historic Linton Hall on the MSU campus

“Neither the Department of Energy nor the Advisory Council on Historic Preservation were giving guidance on how to handle this,” says Martha MacFarlane-Faes, Michigan’s Environmental Review Coordinator. But solutions needed to be found, and they were, through a collaboration between the State Historical Preservation Office, its Department of Energy, Labor and Economic Development.

What emerged is an interdepartmental agreement that slices the number of buildings that need to be reviewed by SHPO staff by 80%. One big move was a matter of simple common sense. With limited staff available, the decision was reached to skip review on homes needed relatively minor work (caulking or weather-stripping, for instance).

Similarly, the decision was made that if a house wasn’t so old, there was little likelihood it would be evaluated as historical. “If you are in a 1970’s building,” MacFarlane-Faes says, “we aren’t interested.” This seems like simple common sense. But such common sense can easily fall by the wayside in complying with complex directives. And it didn’t here.

What’s more, the whole matter impelled the state to digitize SHPO review processes. “We have been relying on snail mail,” explains MacFarlane-Faes. “That can take two or three weeks and that delays things right there.” In June, the new digital system will allow construction teams to submit review applications (a description and a photo of the structure) electronically. In time, having everything digital might also help the office perform more sophisticated analyses of historic homes and districts.

“There has been added emphasis on upgrading technology because of Governor Granholm’s commitment to efficiently distributing ARRA funds in Michigan,” says McFarlane-Faes, “Without her backing, I’m not sure we would have been able to do it in a timely manner, if at all.”

Is Faster Better?

April 13, 2010 by

One of the most significant measures currently being applied to stimulus spending is the speed with which dollars are put to work. We get that. It doesn’t stimulate the economy very much today, to spend money next year. But there’s a delicate balance here. The Recovery Act also suggests that states should be looking toward the long-term benefits of the dollars spent. And that’s not easy to do, if the primary goal is to crank the dollars out as quickly a possible.

Former Governor Tim Kaine

Perhaps the best example of this tension is the October back and forth between Congressman James Oberstar, Chairman of the U.S. House Committee on Transportation and Infrastructure and former Governor of Virginia Tim Kaine. Oberstar complained that Virginia was the slowest of the states in getting its transportation funding out into the field. Kaine responded that his state was different from others, in that it was using its ARRA money to create new projects, not just to keep old ones going. What’s more, he pointed to the careful thoughtful process Virginia uses to make sure its infrastructure dollars are well spent.

We asked some transportation officials in Virginia about the exchange, and were struck by something that chief financial officer Reta Busher said regarding the challenges of transportation management, “The short term nature of what we are dealing with is troublesome in a business where a project can take anywhere from 18 months to 5 years.”

We think there’s an important point in having a range of different measures. If you concentrate too much on speed, then quality may be sacrificed, as we wrote in a column in Governing magazine. With a range of measures, no one element gets an inordinate or inappropriate amount of focus. It’s fine to measure speed, but that information also has to be weighted against how well the services are working — or what the dollars are accomplishing — in the long run.

“You can’t do the math that way”

April 12, 2010 by

One of the best sources for news reporting about the stimulus is ProPublica. Its staff is particularly savvy about how to dig into the data and seems happy to share its knowledge with journalists elsewhere.

Jennifer LaFleur

ProPublica, which draws its funding from the Sandler Foundation and other contributors, is an independent, non-profit newsroom, created with the purpose of covering “truly important stories, stories with moral force.” It has aggressively covered the stimulus from its passage in February 2009. We recently talked with Jennifer LaFleur, who is director of computer assisted reporting there.

How did ProPublica get started covering the Recovery Act?

In the beginning, there was this huge amount of money and very little coverage. Initiated by our stimulus reporter Michael Grabell, we started pulling together as much data as we possibly could. Before the data was on Recovery.gov, we had to go to individual states to get it. In some states, if you’re not a resident, they won’t provide public records – even though this was federal money.

Early on, we spent a lot of time with the state websites and the state department of transportation sites. Initially, a lot of states looked like they were giving you a lot of information, but they really weren’t. Texas had a pretty page and lots of graphics and flashy things, but it didn’t provide a list of actual recipients. I remember that Washington was a state that did a really good job on its state DOT site.

With all the data on Recovery.gov, is the stimulus a lot easier to cover now?

It is easier, though there is a problem that not all the data is in one place. There’s Recovery.gov and USAspending.gov and there’s duplication in those sites. The information in the latter covers the parts of the stimulus that weren’t intended to create jobs – Section 8 housing money, Small Business Administration loans.

We’ve collected all the data in one place, so we have double the records in our data set that you’d find in Recovery.gov.

What do you think of the Recovery.gov website?

For the speed with which they had to set this up, Recovery.gov is one of the better sites as far as providing information. But it was a very big promise to say we’d be able to follow every dollar. That’s not the case.

In the beginning, there were definitely data quality issues.  There were zip codes that didn’t exist and data entry errors on Congressional districts. They’ve done a pretty good job of fixing the data issues.

Are there improvements you’d make in Recovery.gov?

It’s been responsive and fixed a lot of the big problems that came up early on.

But there is information you’d like to see. They don’t include counties in the data and that’s kind of a standard thing. They have other location information, but people want to look at what money is going to their county. There are some identifier issues I’d fix.  You can connect a project to a prime recipient, who doles out the money to sub-recipients, but you can’t really hook up vendors to sub-recipients.

For example, a reporter called yesterday.  He saw that a sub-vendor in his area was a car dealership and  wanted to know who had hired that car dealer. But the data doesn’t show that.

There’s also no information on anything below sub-recipient. In weatherization, for example, the money goes from the Department of Energy to states and states disperse the money to community action agencies and then they hire contractors to do the work.  The data doesn’t show those relationships.

I know that at some point you have to draw the line on how many levels you go down.

What do you think of the quality of local reporting on the stimulus?

It’s also gotten a lot better. The questions we get from reporters are more sophisticated than they used to be, but understanding the data is still complicated.

I’ve noticed that a few organizations have made the mistake of taking the total project money, dividing by the number of jobs and then writing a story about the $500,000 job. You can’t do the math that way. A lot of the money goes to other things – like buying asphalt or trucks.

Also, when I do training sessions for reporters, I ask how many people have read the recovery bill and nobody raises their hands.

Do you have any other issues with what you read?

There’s a tendency to jump on a problem as if it were a big conspiracy. Early on, there was a perception that a bad zip code was a signal that there was a big conspiracy of money being dumped in bad places. But it was just bad data.

What aspects of the ProPublica coverage are you particularly proud of?

Michael Grabell has done a great deal of very good work. He dug in very quickly. In one example, he found that stimulus money was going to teeny tiny airports in the middle of nowhere and then the DOT  inspector general came out with an advisory that said the same thing.

We’ve put a lot of work on some of the tools on our website. Our Recovery Tracker lets people track down to the county level and Stimulus Speed Chart looks at how fast money goes out the door.

What are your plans for future coverage?

We’ll continue to improve our Recovery Tracker and we likely will develop new interactive tools for covering the stimulus. We’ll also continue to dive into the data to do investigations.

Note:  A late afternoon congratulations to ProPublica, which became the first online non-profit news organization to win a Pulitzer. The award, announced today, was in the investigative journalism category and was shared with The New York Times for an article published in its Sunday magazine last August. The article, by Sheri Fink, dealt with choices faced by doctors at a New Orleans hospital immediately following Hurricane Katrina.

From the auditor’s seat

April 9, 2010 by

In upcoming weeks, we’ll be talking with local and state auditors about their observations about the Recovery Act and how it’s affecting their work. If you’re curious to see some examples of how local auditors are approaching the challenges of monitoring Recovery Act dollars, the Association of Local Government Auditors has set up a web page to collect local audits relating to the stimulus.  To date, a similar repository has not been established on the state side, according to the National State Auditors Association. But the Recovery Board has asked states to send in Recovery Act audits and a small collection is developing in the Recovery.gov accountability section.

The transparency balancing act

April 9, 2010 by

As we talk to people about the reporting requirements for the stimulus act, we hear two significant complaints:

1) Important information is missing
2) The task of supplying the information already there is onerous.

It’s a tricky balance, to be sure.  In our search for thoughtful commentary on questions of transparency, we’ve been entertained and educated by  the The Fine Print, a terrific blog  associated with OMBWatch.com. It has been doing a great job this week of staying on top of the Obama Administration’s Open Government Directive.

Consider the following comment from the federal Office of Management and Budget that The Fine Print highlights:

“A clear lesson from the Federal government’s experience with the Recovery.gov website is that, given the numerous stakeholders involved in the federal spending process and the complexity of underlying systems, all efforts to improve transparency must include thoughtful consideration of the costs and benefits of various implementation approaches.”

And while you’re visiting The blog, be sure to check out its breakdown of Open Government plans and memos and thoughts about some of the limits within those plans.