Out of Control Policy Blog

GAO: Stimulus Program Has Significant Reporting Problems

The U.S. Government Accountability Office (GAO), the federal government's watchdog agency, has taken a look at the numbers and found 10 percent of the jobs claimed as "saved" or "created" by the so-called stimulus program didn't have any spending attached to them. In other words, the reported numbers are so unreliable they really shouldn't be used.

According to an ABC News report:

More than 50,000 jobs, or one out of every 10 jobs the White House says were "saved or created" by their economic stimulus plan, came from projects that reported spending no money yet, according to a government report obtained by ABC News.

The report by the Government Accountability Office (GAO) analyzes the Administration's October 2009 report on jobs saved or created by the $787 billion stimulus program and finds a "range of significant reporting and processing problems that need to be addressed."

Even with the errors, GAO gives the Obama Administration high marks for its efforts at transparency and in making so much information public in such a short period of time.

While the Obama Adminsitration should get credit for its attempt at transparency, we can't lose sight of what this really means. These numbers should not be used as any indication of how well the stimulus program is working. They simply aren't reliable enough. It will take months, perhaps years, to just sort out the accuracy of the reported numbers.

Again from ABC News:

On Thursday the GAO's Gene Dodaro will testify before the House Oversight & Government Reform Committee.

"Neither the recipients nor analysts can identify with certainty the impact of the Recovery Act because of the inability to compare the observed outcome with the unobserved, counterfactual scenario in which the stimulus does not take place," Dodaro says in draft testimony prepared for the hearing that was obtained Wednesday by ABC News.

In his prepared testimony Dodaro notes problems such as "different interpretations" of the administration's guidance for what constitutes a job saved or created by stimulus funds. These problems, he says, were "one of the most significant problems" they found. Therefore the GAO states that the Office of Management & Budget should "clarify the definition" and "consider being more explicit that 'jobs saved or retained' are to be reported as hours worked and paid for with Recovery Act funds."

In response to the watchdog's findings, OMB has "generally agreed to implement" the recommendations, Dodaro says, noting that OMB has also "undertaken a lessons learned process for the first round of recipient reporting." No OMB officials will testify at Thursday's hearing, despite calls from the House panel's ranking member Darrell Issa, R-Calif., that they do so.

Beyond that, there is the more fundamental and substantive question of sorting out whether a job actually was "saved" or "created" (an issue I have discussed earlier on this blog).  In truth, this is viritually impossible to evaluate without examining each report individually and subjecting each to a consistent, regorous methodology with well defined criteria about how to classify the jobs. Each report would be scored against these criteria by an independent auditor or analyst.

To my knowledge, no one is taking up that task. Then again, perhaps this can be part of the next stimulus program so the federal government can "create" jobs by hiring auditors for the first stimulus program.

Reason's Stimulus and Bailouts Coverage

Samuel Staley is Research Fellow


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He misspelled 'stimulus' in the headline.



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