Magazine article Government Finance Review

Accountability and Transparency in the American Recovery and Reinvestment Act

Magazine article Government Finance Review

Accountability and Transparency in the American Recovery and Reinvestment Act

Article excerpt

When signing the American Recovery and Reinvestment Act (ARRA), President Obama made clear that "every taxpayer dollar spent on our economic recovery must be subject to unprecedented levels of transparency and accountability." Accordingly, the president has identified five objectives for federal agencies to help ensure accountability and transparency in the distribution and use of stimulus funds. These objectives require that:

* Recovery funds are awarded and distributed in a prompt, fair, and reasonable manner;

* The recipients and uses of all recovery funds are transparent to the public, and that the public benefits of these funds are reported clearly, accurately, and in a timely manner;

* Recovery funds are used for authorized purposes and every step is taken to prevent instances of fraud, waste, error, and abuse;

* Projects funded under the recovery legislation avoid unnecessary delays and cost overruns; and

* Programs meet specific goals and targets, and contribute to improved performance on broad economic indicators.


Title XV of the ARRA is devoted entirely to accountability and transparency requirements. In particular, Section 1511 discusses certifications to be made by governors, mayors, and other chief executive officers with regard to infrastructure investments. Section 1512 addresses the specifics related to recipient reporting to federal agencies on the use of funds, and it includes requirements such as a detailed list of all projects or activities for which recovery funds were expended or obligated, as well as detailed information on any sub-contracts or sub-grants awarded by the recipient. (1)


To facilitate compliance with the objectives of the accountability and transparency provisions, the president has directed federal agencies to take certain critical steps to implement the act. On April 3, 2009, the Office of Management and Budget (OMB) issued the latest in a series of guidance to federal agencies for carrying out programs and activities enacted by the ARRA. Noteworthy in the guidance is the requirement that the federal agencies responsible for distributing the funds must post all information related to recipient reporting on their agency Web sites, and they are also encouraged to disseminate the information to external stakeholders and to respond to their inquiries about the reporting requirements. Federal agencies are also encouraged to engage state and local governments during the development of any relevant reporting requirements. Reci-pients of federal funds will be reporting on the use of their funds beginning mid-July 2009. The OMB guidance and accompanying memorandum can be found at


While the guidance released by OMB is directed at federal agencies charged with distributing the funding to recipients, it contains significant information for recipients themselves, including state and local governments. In particular, Section 2 of the guidance elaborates on the recipients reporting requirements set forth in Section 1512 of the ARRA, and includes a discussion of items such as the types of reporting that will be required, reporting on the number of jobs created, and how the information will be collected. Also of note, Section 5.6 of the guidance discusses what tools federal agencies should employ to audit the use of the federal awards distributed to states and localities.

In addition, OMB has solicited comments from both federal agencies and funding recipients, including states and localities, on the standard data elements under consideration for use in complying with the reporting requirements of the ARRA. The standard data elements for reports under Section 1512 of the ARRA was developed to serve as a government-wide standard data set for federal agencies to use in collecting information required under Section 1512. …

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