The media went hog wild over two recent audits from the City of Los Angeles Controller’s office that dealt with stimulus act spending at two agencies, Transportation and Public Works. “Two L.A. Agencies get $111 million in stimulus funds but have created only 55 jobs,” was the headline in the Los Angeles Times.  Other press reports did a little math and trumpeted word of $2 million jobs.

We went back to the original reports to see what was really going on. Not surprisingly, the audits said something very different than much of the coverage would lead you to believe. The audit’s message:  slow contracting and problems requesting reimbursements meant that these two departments were able to spend far less than the $111 figure. In other words, it isn’t that $111 million has created only 55 jobs, but that nowhere near $111 million has been spent.

So,  let’s quickly address the real issue the reports covered, instead of the silly one. What should these departments do to spend faster? We’ll warn you before you continue reading. We don’t have any idea.

The audit reports themselves didn’t have more than a general recommendation that the time should be shortened. Chief internal auditor Cynthia Varela points out that the departments weren’t breaking any rules; they were following normal procedures. Certainly they shouldn’t be “cutting corners” to accelerate spending.

Varela suggests agencies need to ask,  “Are there ways to expedite things? It may come down to the fact that these are the projects that may need to get the priority. The departments said they were high priority, but they may not be receiving as much priority as they could have been. Maybe lesser projects could drag a bit.”

That’s a fair point.  But it gets us wondering. If these departments set aside other work in order to complete ARRA work, how much would they gain? Would it simply lead to the “ARRA Displacement” phenomenon that we described last week, driving up ARRA job counts at the expense of the regular departmental work?