Last week, the Government Accountability Office released its third bimonthly report on the Recovery Act. The report, which examines the Act's implementation across the country, received a fair amount of press. Many of the articles focused on the speed of the Recovery Act spending, as the report noted that the spending is proceeding according to schedule, or how the report examines the effectiveness of the President's summer jobs program. Only a few articles, however, mentioned one of the most important quotes, at least in terms of Recovery Act transparency: "This unprecedented level of detailed information to be reported by a large number of recipients into a new centralized reporting system raises possible risk for the quality and reliability of these data." In other words, the GAO is very concerned about the quality of the October recipient reporting data.

Throughout the report, the GAO describes the confusion it has been hearing from the state and local level, related to the new recipient reporting requirements. Here are a few select quotes from the report, to help show what led the GAO to its conclusion (the citations are to the GAO report):

"Despite the OMB [Office of Management and Budget] and DOT [Department of Transportation] guidance, both highway and transit officials expressed concerns and challenges with meeting the recipient reporting requirements." (pg. 37)

"A number of agencies expressed confusion about calculating the number of direct jobs resulting from Recovery Act funding, especially with regard to using Recovery Act funds for purchasing equipment." (pg. 38)

"One transit agency highlighted that they had concerns about the process for calculating the number of FTEs (full-time equivalents) based on the number of hours worked on a project." (pg. 39)

"Officials from a housing industry group told us their members were not aware of the OMB guidance on recipient reports until GAO inquired about it." (pg. 98)

Yikes. Granted, this anecdotal evidence is only from two federal agencies, Transportation and Housing. However, it is not a stretch to imagine that, if these two agencies, which are handling a great deal of the stimulus funding, are having issues with reporting, then many other agencies are likely having similar problems.

Unfortunately, these reports are not too surprising. We at OMB Watch have noted the looming data quality issue before, and the previous GAO reports have said similar things as well. What makes the new GAO report newsworthy is that it is the first report to provide accounts from the ground, from the very recipients who will be reporting over the coming weeks. Hopefully, these on-the-ground reports will help convince OMB that significant reporting problems are on the horizon (to their credit, the Recovery Board, which runs Recovery.gov but cannot set reporting policy, seems to understand the impending reporting mess). If users go to Recovery.gov on October 15, expecting perfect data, then if the GAO report is to be believed, they will be very disappointed.

If there is a silver lining to this report, it's that the problem might work itself out over time. The GAO found that while many recipients are unfamiliar with the reporting requirements, those recipients who have been required to report under similar programs before seem to be less concerned than recipients who have never had to report before. As the report notes,

"While both highway and transit officials raised concerns, transit officials tended to raise more specific concerns than their highway counterparts. This may reflect differing experiences collecting this type of information. FTA [Federal Transit Administration] officials noted that recipients of transit grants have not had to collect similar information in the past." (pg. 38)

Certainly, it's not much of a silver lining, but considering how bad the reported data will likely be come October, it's good to know that there might be light at the end of the tunnel.