In 2009, the American Recovery and Reinvestment Act provided a one-time boost in spending to state and local governments of more than $275 billion which was distributed via 65 different new or existing federal programs. 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.
While the Recovery Act is a temporary program, its implementation and its centralized requirements may have potential long-term implications. The authors examined the implementation of the Act in three localities in Virginia: Alexandria, Blacksburg, and Richmond. Specifically, the authors examined the impact of the speed at which the localities implemented their funding; how they addressed increased information demands and increased frequency of reporting; how they used risk management as a strategic lens in their decision-making; and how they increased their collaborative efforts with both state and federal partners.
Based on an analysis of the implementation of Recovery Act grants in Virginia, the report offers a series of recommendations to improve the federal grants process in the future. The authors conclude that the approach used to implement the Recovery Act may also serve as a new benchmark for rapid information sharing. In fact, Congress seems pleased enough with the data collection approaches used in the Recovery Act to be considering expanding the same type of reporting requirements to all federal spending.