79–006 

111TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 111–115 

ENHANCED OVERSIGHT OF STATE AND LOCAL 

ECONOMIC RECOVERY ACT 

MAY 18, 2009.—Committed to the Committee of the Whole House on the State of 

the Union and ordered to be printed 

Mr. TOWNS, from the Committee on Oversight and Government 

Reform, submitted the following 

R E P O R T 

[To accompany H.R. 2182] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Oversight and Government Reform, to whom 

was referred the bill (H.R. 2182) to amend the American Recovery 

and Reinvestment Act of 2009 to provide for enhanced State and 

local oversight of activities conducted pursuant to such Act, and for 

other purposes, having considered the same, report favorably thereon without amendment and recommend that the bill do pass. 

CONTENTS 

Page 

Purpose and Summary ............................................................................................ 2 

Background and Need for Legislation .................................................................... 2 

Legislative History .................................................................................................. 3 

Section-By-Section ................................................................................................... 4 

Explanation of Amendments ................................................................................... 4 

Committee Consideration ........................................................................................ 4 

Roll Call Votes ......................................................................................................... 4 

Application of Law to the Legislative Branch ....................................................... 4 

Statement of Oversight Findings and Recommendations of the Committee ...... 5 

Statement of General Performance Goals and Objectives .................................... 5 

Constitutional Authority Statement ...................................................................... 5 

Federal Advisory Committee Act ............................................................................ 5 

Unfunded Mandates Statement .............................................................................. 5 

Earmark Identification ............................................................................................ 5 

Committee Estimate ................................................................................................ 5 

Budget Authority and Congressional Budget Office Cost Estimate .................... 6 

Changes in Existing Law Made by the Bill, as Reported ..................................... 7 


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PURPOSE AND SUMMARY

H.R. 2182, the ‘‘Enhanced Oversight of State and Local Economic 

Recovery Act,’’ was introduced by Oversight and Government Reform Committee Chairman Edolphus Towns and Ranking Member 

Darrell Issa on April 29, 2009. The bill makes a number of changes 

to the American Recovery and Reinvestment Act of 2009 (P.L. 111– 

5) to assist state and local governments in their efforts to oversee 

the spending directed by that Act. 

The bill directs Federal agencies to adjust the administrative cost 

associated with grants and contracts awarded to or through state 

and local governments to include costs associated with auditing, 

contract and grant planning and management, and investigations 

of waste, fraud, and abuse, subject to guidance from the Office of 

Management and Budget. This would allow state and local governments to use a greater portion of grant or contract funds for these 

purposes. The bill also authorizes state and local governments to 

use up to 0.5 percent of funds awarded under the Recovery Act, in 

addition to any funds already allocated to administrative expenditures, to conduct planning and oversight to prevent and detect 

waste, fraud, or abuse of stimulus dollars. 

H.R. 2182 would also allow state and local governments to use 

the Federal supply schedules of the General Services Administration to purchase goods and services that are funded by the Recovery Act. The Federal supply schedules are a series of schedules 

comprised of contracts for commonly-used supplies and services 

available to government agencies at specified prices. By law, the 

prices offered must be no greater than the lowest commerciallyavailable price. Use of the schedules may allow state and local governments to acquire covered items without engaging in time-consuming contracting procedures, while guaranteeing the lowest 

prices for such items. 

Finally, the bill requires the Director of the Office of Management and Budget to issue guidance to ensure that the reporting by 

state and local governments of ‘‘jobs created’’ and ‘‘jobs retained’’ is 

accurate and consistent. 

BACKGROUND AND NEED FOR LEGISLATION

The need for legislation to assist state and local governments in 

implementing the oversight and accountability requirements of the 

American Recovery and Reinvestment Act was demonstrated at 

Oversight and Government Reform Committee hearings on the economic stimulus. (See, e.g., House Committee on Oversight and Government Reform, Hearing on The American Recovery and Reinvestment Act of 2009: The Role of State and Local Governments, 111th 

Cong. (April 21, 2009) (held in Brooklyn, NY); House Committee on 

Oversight and Government Reform, Hearing on Preventing Stimulus Waste, Fraud, and Abuse: Who are the Watchdogs, 111th 

Cong. (March 19, 2009)). 

At the hearings, state and local officials responsible for overseeing spending of stimulus dollars explained that their auditors 

are already under tremendous pressures to conduct normal oversight work, and are therefore having difficulty coping with the increased transparency and accountability requirements from the Recovery Act. For example, William J. Holland, the Illinois Auditor 


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General, speaking on behalf of the National Association of State 

Auditors, Comptrollers, and Treasurers, explained that federal departments and agencies, such as the Government Accountability 

Office and the Recovery Accountability and Transparency Board, 

received substantial dollars for the purpose of maintaining accountability of Recovery Act funds. However, while ‘‘state auditors already bear significant responsibility for oversight of federal program spending by state agencies,’’ no comparable Recovery Act appropriations were made to compensate for the increased burden on 

these agencies. Similarly, Mr. Jerome Heer, Director of Audits for 

Milwaukee County, Wisconsin, on behalf of the Association of Local 

Government Auditors (ALGA), noted that the economic downturn 

had already resulted in budget reductions at most local government 

auditing organizations. He explained that these organizations are 

‘‘carrying out important, innovative work, [but] they do not currently have the ability to take on additional tasks.’’ 

These hearings made clear that state and local governments need 

additional resources to monitor the large infusion of funds that the 

Recovery Act directed to state-administered federal programs. H.R. 

2182 addresses this omission by providing state and local governments with the flexibility they need to set aside a portion of stimulus funds for auditing, contract and grant planning and management, and investigations of waste, fraud, and abuse. The Committee also believes that a critical approach to planning and oversight is project and program management. State and local agencies 

should have in place strong and effective project and program management processes so that opportunities for fraud, waste, and 

abuse are limited. 

The bill will also assist state and local governments by permitting them to use the federal supply schedules of the General Services Administration (GSA) for stimulus projects. The GSA schedules are pre-negotiated federal contracts for a range of common 

goods and services. This will allow state and local governments to 

acquire certain items without engaging in time-consuming contracting procedures, while guaranteeing the lowest prices for such 

items. 

Lastly, in response to requests from state and local compliance 

officials for clarifications in this area, H.R. 2182 requires the Office 

of Management and Budget to give detailed guidance to state and 

local governments to ensure consistency in their reporting of job 

creation data. 

The Committee recognizes that state and local governments are 

on the front lines of the effort to fight mismanagement of Recovery 

Act dollars. Their success is vital to making the stimulus work for 

the American people. 

LEGISLATIVE HISTORY

On March 19, 2009, the House Committee on Oversight and Government Reform held a hearing on ‘‘The American Recovery and 

Reinvestment Act of 2009: The Role of State and Local Governments.’’ On April 21, 2009, the Committee held a field hearing in 

Brooklyn, New York, on ‘‘Preventing Stimulus Waste, Fraud, and 

Abuse: Who are the Watchdogs.’’ The Oversight and Government 

Reform Committee held a markup session on the bill on May 6, 

2009. The Committee ordered the bill to be reported by voice vote. 


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SECTION-BY-SECTION

Sec. 1. Short title 

The short title of the bill is the Enhanced Oversight of State and 

Local Economic Recovery Act. 

Sec. 2. Requirements for funding for state and local oversight under 

American Recovery and Reinvestment Act of 2009 

This section would amend the American Recovery and Reinvestment Act to require Federal agencies, subject to guidance from the 

Director of the Office of Management and Budget, to adjust applicable limits on administrative expenditures for Federal awards to 

help award recipients defray the costs of data collection requirements, auditing, contract and grant planning and management, 

and investigations of waste, fraud, and abuse. 

The section further amends the Recovery Act to allow state and 

local governments receiving funds under the Recovery Act to set 

aside an amount up to 0.5 percent of such funds, in addition to any 

funds already allocated to administrative expenditures, to conduct 

planning and oversight to prevent and detect waste, fraud, and 

abuse. 

Sec. 3. Authorization for acquisition by state and local governments 

through Federal supply schedules 

This section amends section 502 of title 40, United States Code, 

by providing the Administrator of the General Services Administration with the authority to provide for the use by state or local governments of the Federal supply schedules for goods or services that 

are funded by the Recovery Act. Participation by a firm that sells 

to the Federal Government through the supply schedule shall be 

voluntary. 

Sec. 4. Definition of jobs created and jobs retained 

This section amends section 1512(g) of the Recovery Act by requiring the Director of the Office of Management and Budget to 

issue guidance to state and local government agencies and other 

funding recipients to ensure accurate and consistent reporting of 

‘‘jobs created’’ and ‘‘jobs retained’’ through Recovery Act projects. 

EXPLANATION OF AMENDMENTS

No amendments were offered by Committee Members. 

COMMITTEE CONSIDERATION

On Wednesday, May 6, 2009, the Committee met in open session 

and favorably ordered H.R. 2182 to be reported to the House by a 

voice vote. 

ROLL CALL VOTES

No roll call votes were taken. 

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

Section 102(b)(3) of P.L. 104–1 requires a description of the application of this bill to the legislative branch where the bill relates 


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to terms and conditions of employment or access to public services 

and accommodations. 

H.R. 2182 amends the American Recovery and Reinvestment Act 

by providing additional resources to state and local governments 

for oversight of Recovery Act projects, and for other purposes. This 

bill does not relate to employment or access to public services and 

accommodations in the legislative branch. 

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1) 

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the 

descriptive portions of this report, including the need to increase 

the availability of oversight funds for use by state and local governments. 

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee’s performance goals and 

objectives are reflected in the descriptive portions of this report, including the need to increase the availability of oversight funds 

available to state and local governments. 

CONSTITUTIONAL AUTHORITY STATEMENT

Under clause 3(d)(1) of rule XIII of the Rules of the House of 

Representatives, the Committee must include a statement citing 

the specific powers granted to Congress to enact the law proposed 

by H.R. 2182. Article I, Section 8, Clause 18 of the Constitution of 

the United States grants the Congress the power to enact this law. 

FEDERAL ADVISORY COMMITTEE ACT

The Committee finds that the legislation does not establish or 

authorize the establishment of an advisory committee within the 

definition of 5 U.S.C. App., Section 5(b). 

UNFUNDED MANDATES STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement on whether the 

provisions of the report include unfunded mandates. In compliance 

with this requirement the Committee has received a letter from the 

Congressional Budget Office included herein. 

EARMARK IDENTIFICATION

H.R. 2182 does not include any congressional earmarks, limited 

tax benefits, or limited tariff benefits as defined in clause 9(d), 9(e), 

or 9(f) of rule XXI. 

COMMITTEE ESTIMATE

Clause 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the ComVerDate Nov 24 2008 05:14 May 19, 2009 Jkt 079006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR115.XXX HR115

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mittee of the costs that would be incurred in carrying out H.R. 

2182. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its 

report a timely submitted cost estimate of the bill prepared by the 

Director of the Congressional Budget Office under section 402 of 

the Congressional Budget Act. 

BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE COST

ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of 

the Rules of the House of Representatives and section 308(a) of the 

Congressional Budget Act of 1974 and with respect to requirements 

of clause 3(c)(3) of rule XIII of the Rules of the House of Representatives and section 402 of the Congressional Budget Act of 1974, the 

Committee has received the following cost estimate for H.R. 2182 

from the Director of the Congressional Budget Office: 

MAY 12, 2009. 

Hon. EDOLPHUS TOWNS, 

Chairman, Committee on Oversight and Government Reform, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 2182, the Enhanced Oversight of State and Local Economic Recovery Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Matthew Pickford. 

Sincerely, 

DOUGLAS W. ELMENDORF, 

Enclosure. 

H.R. 2182—Enhanced Oversight of State and Local Economic Recovery Act 

H.R. 2182 would allow state and local governments to purchase 

certain goods and services at the same discounted prices charged 

to the federal government. Eligible purchases under the bill would 

include those funded through grants provided in Public Law 111– 

5, the American Recovery and Reinvestment Act (Recovery Act). 

The legislation also would allow state and local governments to use 

a portion of their Recovery Act funds to monitor and account for 

those funds. CBO estimates that enacting H.R. 2182 would increase offsetting collections and associated spending of fees charged 

by the General Services Administration (GSA), but the net effect on 

the federal budget would be negligible. The bill would have no effect on revenues. 

Under current law, state and local governments are able to use 

GSA’s federal supply schedule to purchase goods from willing commercial vendors if those purchases are related to law enforcement, 

fire fighting, disaster recovery, or information technology. GSA 

charges a 0.75 percent fee on all purchases to recover the administrative costs of maintaining the supply schedule. 

H.R. 2182 would temporarily expand the program to include any 

purchase made by those governments using Recovery Act funds. 

Based on information from GSA on the anticipated additional demand by the state and local governments, CBO estimates that adVerDate Nov 24 2008 05:14 May 19, 2009 Jkt 079006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR115.XXX HR115

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ditional purchases would increase GSA’s offsetting collections by 

about $15 million annually over the next few years. Because such 

fees are spent by GSA without further appropriation, the net budgetary impact would be negligible. 

In addition, section 2 would allow funds previously appropriated 

by the Recovery Act to state and local governments to be used for 

planning and auditing activities as well as investigations of waste 

and fraud. CBO expects that provision would not change the 

amount or the timing of expenditures to state and local governments. We therefore estimate that implementing that provision 

would have no significant effect on direct spending. 

H.R. 2182 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act. The bill 

would benefit state and local governments by allowing them to use 

the federal supply schedule to purchase additional goods and services. 

The CBO staff contact for this estimate is Matthew Pickford. The 

estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

AMERICAN RECOVERY AND REINVESTMENT ACT OF 

2009 

* * * * * * * 

TITLE XV—ACCOUNTABILITY AND 

TRANSPARENCY 

* * * * * * * 

Subtitle A—Transparency and Oversight 

Requirements 

* * * * * * * 

SEC. 1512. REPORTS ON USE OF FUNDS. 

(a) * * * 

* * * * * * * 

(g) GUIDANCE.—Federal agencies, in coordination with the Director of the Office of Management and Budget, shall provide for userfriendly means for recipients of covered funds to meet the requirements of this section. The Director of the Office of Management and 

Budget shall issue guidance to ensure accurate and consistent reVerDate Nov 24 2008 05:14 May 19, 2009 Jkt 079006 PO 00000 Frm 00007 Fmt 6659 Sfmt 6602 E:\HR\OC\HR115.XXX HR115

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porting of ‘‘jobs created’’ and ‘‘jobs retained’’ as those terms are used 

in subsection (c)(3)(D). 

* * * * * * * 

Subtitle D—Additional Accountability and 

Transparency Requirements 

* * * * * * * 

øSEC. 1552. SET-ASIDE FOR STATE AND LOCAL GOVERNMENT REPORTING AND RECORDKEEPING.¿ 

SEC. 1552. FUNDING FOR STATE AND LOCAL GOVERNMENT OVERSIGHT. 

(a) FEDERAL AGENCY REQUIREMENT.—Federal agencies receiving 

funds under this Act, ømay, after following the notice and comment 

rulemaking requirements under the Administrative Procedures Act 

(5 U.S.C. 500), reasonably¿ shall, subject to guidance from the Director of the Office of Management and Budget, adjust applicable 

limits on administrative expenditures for Federal awards to help 

award recipients defray the costs of ødata collection requirements¿ 

data collection requirements, auditing, contract and grant planning 

and management, and investigations of waste, fraud, and abuse initiated pursuant to this Act. 

(b) STATE AND LOCAL GOVERNMENT AUTHORITY.—Notwithstanding any other provision of law, State and local governments 

receiving funds under this Act may set aside an amount up to 0.5 

percent of such funds, in addition to any funds already allocated to 

administrative expenditures, to conduct planning and oversight to 

prevent and detect waste, fraud, and abuse. 

* * * * * * * 

SECTION 502 OF TITLE 40, UNITED STATES CODE 

§ 502. Services for other entities 

(a) * * * 

* * * * * * * 

(e) USE OF SUPPLY SCHEDULES FOR ECONOMIC RECOVERY.— 

(1) IN GENERAL.—The Administrator may provide for the use 

by State or local governments of Federal supply schedules of the 

General Services Administration for goods or services that are 

funded by the American Recovery and Reinvestment Act of 2009 

(Public Law 111–5). 

(2) VOLUNTARY USE.—In the case of the use by a State or 

local government of a Federal supply schedule pursuant to 

paragraph (1), participation by a firm that sells to the Federal 

Government through the supply schedule shall be voluntary 

with respect to a sale to the State or local government through 

such supply schedule. 


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(3) DEFINITIONS.—The definitions in subsection (c)(3) shall 

apply for purposes of this subsection. 

* * * * * * * 

Æ 


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