Special Report
Federal

Initial Aid Is Puzzle to Track

Transparency Proves Elusive as Stimulus Funds Flow
By Michele McNeil — April 24, 2009 7 min read
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Includes updates and/or revisions.

States and federal agencies are off to a slow and uneven start in allowing the public to track the first allotments from up to $100 billion in new education funding under the federal economic-stimulus package, despite strong pledges of transparency for the program from the Obama administration.

Although about $145 million in aid has been sent from the U.S. Department of Education to states and local districts so far, most states’ “recovery” Web sites contain only general information about the stimulus program and no information on the money that’s flowed into their states.

Recovery.gov, the federal government’s main online portal on the stimulus is still without any state-by-state information on money that’s already filtered down from federal agencies to the states, and most Education Department spending data are buried in Excel spreadsheets deep in the departmental Web site.

“There’s always a trade-off between immediacy and accuracy,” said Sandra Abrevaya, a spokeswoman for the Education Department. “We don’t want to put things up so early that we end up having to revise them.”

The expectations for public information about the stimulus program have been set extremely high, from President Barack Obama on down.

“The president has made it clear that every taxpayer dollar spent on our economic recovery must be subject to unprecedented levels of transparency and accountability,” reads the transparency section of recovery.gov.

Stimulus Reporting Requirements

The American Recovery and Reinvestment Act and subsequent federal guidelines spell out rules for agencies distributing or receiving shares of up to $100 billion in aid for education.

Federal agencies (including the U.S. Department of Education) must:

• Host their own recovery.gov Web sites to serve as the portal for stimulus-related public information.

• Report “major communications,” such as press events.

• Post funding notifications when money becomes available to states or local agencies.

• Report weekly on stimulus funding obligations (money that has been formally obligated, but not yet spent) and outlays (money that has been spent).

• Report weekly on “major actions” (defined as those of likely interest to senior government officials, Congress, and the public).

• Craft a formal plan on how the department will apply and manage stimulus aid overall, and more-detailed plans on program-specific funds, to be approved by the Office of Management and Budget by May 15.

States must:

• Submit quarterly reports, starting Oct. 10, to federal officials accounting for how all stimulus funding was spent, and include the project’s name and a description, an evaluation of the program’s progress, and an estimate of the number of jobs created or saved.

• Submit annual reports on how the state fiscal-stabilzation money was used, how many jobs were saved or created, and how much progress was made in key education reform areas (such as reducing teacher-quality inequities).

School districts and other local agencies must:

• Keep detailed spending records that may be required by states; federal officials plan to expand reporting requirements to include information about district stimulus spending, including any contractors or subcontractors hired.

• Report a school-by-school listing of per-pupil educational expenditures from state and local sources for Title I money.

• Fulfill existing reporting requirements under Title I and special education programs.

Sources: U.S. Office of Management and Budget; U.S. Department of Education; American Recovery and Reinvestment Act

And U.S. Secretary of Education Arne Duncan has made similar promises, including in an interview last month with Education Week.

“There’s never been such transparency,” he said. “We’ll be tracking state by state and district by district how money is being spent.”

Early Steps

With the American Recovery and Reinvestment Act not even three months old, state and federal officials are still trying to figure out what to report, in what detail, and when. In fact federal officials were set to start hosting a weeklong online forum on April 27 through recovery.gov to discuss how the Web site can be better used to track money. The Education Department also has plans to ramp up its Web site with more information.

Government watchdog groups that track federal money say there’s a lot of room to improve—from making information more user-friendly, to requiring standard, more detailed reporting by states, local governments, and school districts.

But it’s encouraging that the transparency bar has been set high, said Marthena Cowart, the director of communications for the Washington-based Project on Government Oversight.

“We’re cautiously optimistic, and we’ll have to wait and see,” she said. “But we don’t want to be a Pollyanna about this.”

Already, the Education Department has decided that not everything stimulus-related must be transparent. For example, officials have said they will not make public the applications states submit for their shares of the $48.5 billion in state stabilization funding available this year; only the approved applications will be public, after any changes have been made.

That decision comes despite the department’s own guidelines governing the stabilization fund, which state: “From the date that a state first submits its application for funding, … the department will make information publicly available regarding a state’s implementation of the program.”

And although other federal agencies are putting on their Web sites stimulus-related communications between lobbyists and departments—information President Obama required under a March 20 directive—the Education Department had yet to post any such communication as of press time.

Certainly, some of the responsibility for ensuring transparency and accountability will fall to federal auditors. The Government Accountability Office, the investigative arm of Congress, is required under the stimulus law to issue bimonthly reviews of how selected states and localities are spending the money—and has chosen 16 states to follow over the next several years. The first such GAO report, released April 23, raised red flags about the capacity of states and localities to properly audit stimulus funds and ensure transparency in tough budget times.

The Education Department’s office of inspector general got $14 million in stimulus funding to beef up its staff and training, and conduct more audits and inspections. That office plans to conduct reviews at the state and local levels on such issues as data quality, use of funds, and cash management, said Catherine Grant, the department’s public-affairs liaison.

But most of the reporting requirements—and thus the burden of transparency—falls to the states, which are charged with reporting quarterly on stimulus spending, starting Oct. 10. Since federal guidelines, so far, apply to the prime recipients of the funding (usually the states), there are few additional reporting requirements just for school districts.

Evolving Process

To that end, every state has set up its version of a recovery Web site. Most states’ sites contain only basic stimulus information, such as links to the law, estimates of how much funding a state is supposed to get, and press releases about the benefits of the stimulus law. Many states’ sites indicate that more-detailed spending information will be coming.

There are some standouts: Maryland, Virginia, Oregon, and Washington state, for example, provide detailed, county-by-county, stimulus-spending information on their Web sites through colorful, interactive maps.

And Connecticut stands out, providing online details of stimulus-related contacts between lobbyists and executive-branch officials. The records are so detailed that they show that on April 1 and April 2, for instance, a member of the Connecticut Education Association sent an e-mail to the state department of education’s legal division urging that stimulus money first be used to save jobs.

The Connecticut site also posts any stimulus project idea submitted to the governor’s office, such as the $20,000 walk-in refrigerator wanted by a middle school in Bridgeport, Conn.; the stimulus program has a provision that allows funding for food-service equipment.

For state departments of education, which will likely bear the burden of collecting spending information from local districts, the first priority has been to get stimulus-related information out to school district officials.

“Our primary goal has been early and frequent communication with the field, but we’re very cognizant we need to do the transparency piece as well,” said David Conarty-Marin, the director of communications for the Maine Department of Education. “All the money that is spent is going to end up on a map on our Web site somehow.”

The information will be detailed.

“We don’t want to just hear about ‘professional development,’ ” said Jaci Holmes, the federal-state legislative liaison for the Maine department. “We want to get below what’s the title to ... what are specific types of programs being funded, and what do they expect as measurable outcomes.”

In Arkansas, the education department is working with its data-system vendor, IBM, to expand its reporting system, so that school district officials can electronically submit real-time data on how they’re spending their stimulus money and on student-performance outcomes. The next step is to figure out how to make that information publicly available online, said Julie Johnson Thompson, the department’s director of communications.

“We’re so intent on making sure this money is spent well, and transparently,” she said.

In some states, however, many district leaders expect little in the way of extra reporting. Districts are already used to federal reporting requirements for programs such as special education.

And in Illinois, for example, district superintendents aren’t expecting that their state’s share of the $48.5 billion state fiscal stabilization fund will result in any additional money for school districts because of the state’s budget problems. Instead, that money will be used to pay existing staff and existing bills, said David Schuler, the superintendent of the 12,700-student Township High School District 214 in Arlington Heights, Ill.

Even so, districts will have to set up separate accounting codes for stimulus money so they can track how it’s spent.

“I wouldn’t say it’s a nightmare, but it’s a logistical challenge,” Mr. Schuler said. “We’re not really going to see any extra money, so it’s really just more paperwork.”

A version of this article appeared in the April 29, 2009 edition of Education Week

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