Recovery Act

The American Recovery and Reinvestment Act of 2009 included unprecedented provisions to disclose how more than $275 billion in grants, contracts, and loans were spent under the Act.  These requirements fell not only on federal agencies but also the recipients and sub-recipients of these monies.  In many cases, state governments were the focal point for collecting and reporting this information.  How did states respond?  Did this increased transparency change how states managed their own monies as well as federal dollars?  Are there lessons for future transparency efforts at the state or fed

Historically, spending under stimulus legislation tended to peak after a recession was over, oftentimes creating inflation instead of jobs. To avoid this, the Recovery Act man­dated tight timeframes, with 70 percent of the money required to be spent within 17 months to generate jobs. There was significant concern that this rapid spending might result in an estimated $50 billion in waste, fraud, or abuse. Accordingly, there were stringent transparency and accountability requirements embedded in the law.

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These 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 the Recovery Act, created an enormous implementation challenge for all the participants in our federal-state-local-non­profit intergovernmental system.