One of the major “lessons learned” in the Recovery Act was that the capacity of state auditors and comptrollers to provide oversight was severely jeopardized by a lack of funds. As Earl Devaney, chair of the Recovery Board, told us: “The Act asked them to participate in the oversight activity and didn’t give them any money to do that. The money went to the federal Inspectors General, not the states.  That was unfair.”

Cornelia Chebinou, Washington director of the National Association of State Auditors, Comptrollers and Treasurers (NASACT), agrees.   “Basically, the biggest flaw in the act was that there was no funding for (state or local) oversight professionals,” she says. As Chebinou (photo at left) breaks down the oversight money, $84 million went to the Recovery Board itself; $25 million to the Government Accountability Office and $221.5 million for federal Inspectors General.

On the stateside, administrative funds in general were in extremely short supply. A small amount came in the form of supplemental Statewide Cost Allocation Plan dollars, but that was just half of 1 percent. As we recounted in an early post, state officials complained bitterly of the hassles in applying for the money and the long delays in receiving it. But aside from those largely administrative dollars, state and local auditors received zero.

The GAO recognized this problem early on, says Chebinou, but by the time it started making suggestions for additional auditor funding, there was little sentiment in the House or Senate to provide added dollars.

Not surprisingly, many auditor and comptroller shops at the state and local level have suffered severe staff cutbacks in the last two years. NASACT documented the falloff in resources as of the end of June 2009, when it compiled the results of a survey of auditors’ offices. At the time, the Illinois auditor office had already lost 12% of its staff. Georgia had lost 10.4%. Missouri was down 20.2%. Many audit shops also had to contend with furlough days , with multiple days lost to Friday shutdowns.

Does this mean that the states will forever shortchange the kind of evaluations that we’ve argued are so critical (see yesterday’s post)? No, not quite. While there’s little doubt that the states are going to be playing catch-up, thanks to the staff cutbacks we’ve just mentioned, it also seems clear that we’re entering a phase of ARRA in which more and more meaningful, results-oriented analysis will be done in many states.  There will be a declining need to spend much in the way of resources keeping track of dollars spent, as fewer and fewer dollars are actually being spent, which will help. But in states where performance measurement is already integral to management, the phase that the stimulus act is entering calls out for just this kind of thinking. Here's hoping that limited resources don't stand in the way.

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