Virginia’s Implementation of the American Recovery and Reinvestment Act: Forging a New Intergovernmental Partnership


Virginia’s Implementation of the American Recovery and Reinvestment Act: Forging a New Intergovernmental Partnership

Friday, November 18th, 2011 - 12:15
In 2009, the American Recovery and Reinvestment Act (ARA) provided a one-time boost in spending to state and local governments of more than $275 billion which was distributed via 65 different federal programs (both new programs and some already in existence). The funds were intended to help bridge the immediate fiscal problems created by the Great Recession.

ARA funds were accompanied by a new, centralized system of strict financial accountability and performance reporting, with frequent reporting requirements. These new requirements, as well as the rapid implementation timeframe required by ARA, created an enormous implementation challenge for all the participants in our federal-state-local-nonprofit intergovernmental system.

This report focuses on ARA’s implementation in three Virginia municipalities and examines how ARA’s legislative requirements are fostering a new intergovernmental partnership. These three cities are Alexandria, a historic town located in the national capital region; Richmond, the capital city of the Commonwealth of Virginia; and Blacksburg, a dynamic small town in southern Virginia and home to Virginia Tech.

Virginia and ARRA Implementation of ARA presented a number of challenges for Virginia. Meeting federal expectations for speed of implementation,
increased information to enhance transparency and accountability, risk management, and collaboration were central to the planning and efforts to implement the Act. Transparency of reporting to enhance accountability was particularly important for a Democratic governor facing a Republican-controlled state house of delegates concerned that ARA money could be used to curry political favor across the state.

While individual Virginia state agencies varied in their preparedness for reporting under ARA, the structure of grants at the federal level varied as well. The state central accounting system provided overall continuity. The comptroller’s office was continuously engaged with the agencies as they developed their reporting processes, but the reporting responsibility rested directly with the agencies themselves. These responsibilities were often not new, as state agencies had responsibilities for coordinating with federal agencies, communicating issues related to the management process, and clarifying issues before passage of the ARA. What has changed, according to participants in the process, is the rigor of the reporting process and improvements in transparency,
particularly at the sub-recipient reporting level.

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