Recovery Blog

The new list is out on Recovery Act recipients that failed to file quarterly spending reports as required by law and it’s a bit surprising.

Nearly 46 percent of the Recovery scofflaws, it turns out, received grants from the Department of Justice, the nation’s principal law enforcement agency. For the most recent quarter, 303 reports were listed on the Recovery Board’s Wall of Shame, our nickname for the list of non-compliers compiled on Recovery.gov. Of those, 139 involve grants issued by the Justice Department to cities, counties, police departments, sheriff’s offices and others.

Some of these law enforcement agencies received grants under the federal COPS program, which promotes community policing in state, local, territory and tribal law enforcement agencies. The reasons for non-compliance varied, according to the Justice Department. Some recipients said they did not have the personnel available to fill out reports and submit them to the Recovery Board. Others experienced technical difficulties, and some simply said their failure was unintentional.

Big and small law enforcement agencies failed to report, including the City of Pittsburgh’s police department. It blamed technical problems and failed to submit reports for the last two quarters on its use of a $144,000 COPS grant.

There was some good news, however: Fewer and fewer recipients of Recovery Act funds want to be featured on the Wall of Shame. For the quarter ending March 31, recipients submitted 138,814 spending reports to the Board. Of the 303 reports not filed—the lowest number in the history of the program—most were one-time offenders. The missing reports involve nearly $1.2 billion in Recovery awards.

Here’s a glimpse at some recipients that failed to report to various agencies:

• The City of Richmond, CA, failed to report in three consecutive quarters on its use of a $4.3 million grant from the Department of Homeland Security. Its explanation, according to DHS: “None given.’’

• Stephentown Regulation Services LLC, Stephentown, NY, did not submit a report for two quarters on a $43.1 million loan guarantee from the Department of Energy. The reason, according to DOE: “Recipient declared bankruptcy.’’

• The office of the Arizona Attorney General did not submit a report on a $2.9 million grant from the Justice Department. The recipient said its failure was unintentional.

• The City of Fairfield, CA, failed to report on $4 million in grants from the Federal Transit Administration. The FTA said it will suspend the grant payments if the city does not submit a report in the next quarter.

• The Milwaukee County Transit System said it forgot to submit a report on its use of a $25,682,975, grant, according to the FTA, which plans to suspend the grant payments if the transit system fails to file a report in the next quarter.

•  Northrop Grumman Systems Corporation failed to submit a report on a $3.1 million contract issued by the Social Security Administration. The SSA said that “the individual [in Northrop Grumman] responsible for reporting on behalf of the recipient indicated he forgot the due date for the report.”

– Michael Wood, Executive Director, Recovery Board

We like to call it the “Wall of Shame.’’

That’s the nickname we’ve given to the list of recipients who fail to submit quarterly spending reports as required by the Recovery Act. Each quarter, after spending reports are filed, the Office of Management and Budget provides the Recovery Board with the names of recipients who failed to comply with the law. Federal agencies that distribute funds for contracts, grants and loans certify the accuracy of these so-called non-compliers.

Oversight of spending is an important function of the Recovery Board.  If recipients don’t file reports detailing how they spent their Recovery funds and how many jobs were funded, then we can’t report to the American public on how those tax dollars were used.

First, a little history would help. Early on in the Recovery program, non-compliance was a bigger problem. In our first reporting period ending in September 2009, recipients failed to submit 4,359 reports.

What to do? The Board decided that if recipients would thumb their noses, then it made sense to point the finger at them. We established a quarterly posting of non-compliers on Recovery.gov.

The Board, of course, was not the only federal agency concerned with the non-compliance issue. In April 2010, the President turned up the heat on non-compliant recipients, issuing a get-tough directive to agencies that distribute Recovery funds. In a nutshell, the agencies were directed “wherever authorized and appropriate’’ to terminate awards, reclaim funds, and initiate suspension and debarment proceedings against violators.

The pressure seems to have worked.  In the quarter ending December 31, recipients filed 171,304 reports with the Recovery Board.  Only 418 reports were not submitted and most were one-time offenders, according to the latest compliance figures. Agencies continue pressing recipients to file their reports, in some cases withholding future payments.

Still, the excuses for non-compliance come fast and furious. One federal agency said that a company with $4 million in contracts didn’t file because its officials were “out of the office.” Other recipients blamed layoffs, firings, sickness and retirements for their failures.  Many recipients, contacted by the awarding agencies, cited technical and administrative issues. In some cases, however, the answer was really quite simple:  The recipients acknowledged missing the reporting deadline.

-- Michael Wood, Executive Director, Recovery Board