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Education Funding

IG: ED Could Have Done a Better Job Tracking Stim Funds

By Alyson Klein — September 30, 2010 2 min read
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Today is Sept. 30, officially the very last day covered by most of the $100 billion provided for education under the American Recovery and Reinvestment Act (aka the stimulus.) So, to um, celebrate ... it’s worth taking a look at this final audit by the U.S. Department of Education’s Office of Inspector General audit, which was released this week.

The audit examines the department’s work in pushing the $53.6 billion in state stabilization funding, the largest single program in the stimulus, out the door.

And the IG found some issues. Namely, they said the department didn’t do a good enough job in making sure states actually provided the necessary information to support their claims about how much money the states had provided out of their own coffers for higher education and K-12 schools before they got their stimulus checks. Department staff did a good job checking the numbers states provided, but they didn’t ask for enough back-up documentation, the IG said.

That would have been especially helpful when looking at whether states were meeting the law’s maintenance of effort requirement (which asked states to keep spending their own dollars at a specific level in order to tap the federal dollars.)

The IG’s office did its own digging into the documents states submitted. They checked out a sample of 16 states and found that 13 had good back-up info, but said three were somewhat fishy, either because they didn’t have enough backup information, or because their numbers weren’t accurate.

One possible problem? States were required by the State Fiscal Stabilization Fund application to “identify and describe data sources used in determining the levels of state support,” but they all seemed to have a different idea of what that meant. Some states provided lots of detailed information about their formulas, but others “offered broad, sometimes vague, descriptions” that weren’t easily understandable for people who weren’t experts in that particular state’s financing system.

According to the audit, department officials felt good about their initial review, and said they’d continue looking at verification documents through regular monitoring and audits. And they said that Governors had to sign off on the accuracy of the data they submitted, under penalty of law, which gives the process some major accountability points. Plus, the department said that all the applications and financial data were posted online for anyone to check out, another point for transparency.

The department also said it didn’t want to place any major burdens on states, and wanted to make sure they were going along with paperwork reduction requirements (There’s an actual law on that.) The department also said it weighed the need to review and verify information with the need to get the money out the door as fast as possible.

The IG had some recommendations:

*Staff need enough time and resources to check over state data.

*The department needs to be explicit in what kind of data it’s asking for from states.

*The department needs to ask for supporting data when they do on-site monitoring of states that got stabilization funding (as every state did.)

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