GAO 

United States Government Accountability Office

Report to the Congress 

RECOVERY ACT

Recipient Reported 

Jobs Data Provide 

Some Insight into Use 

of Recovery Act 

Funding, but Data 

Quality and Reporting 

Issues Need Attention 

November 2009 

GAO-10-223 
Highlights of GAO-10-223, a report to the 

Congress 

View GAO-10-223 or key components. 

For more information, contact J. Christopher 

Mihm at (202) 512-6806 or mihmj@gao.gov. 

November 2009

RECOVERY ACT

Recipient Reported Jobs Data Provide Some Insight into 

Use of Recovery Act Funding, but Data Quality and 

Reporting Issues Need Attention

Why GAO Did This Study

The American Recovery and 

Reinvestment Act of 2009 

(Recovery Act) requires recipients 

of funding from federal agencies to 

report quarterly on jobs created or 

retained with Recovery Act 

funding. The first recipient reports 

filed in October 2009 cover activity 

from February through September 

30,2009. GAO is required to 

comment on the jobs created or 

retained as reported by recipients. 

This report addresses (1) the 

extent to which recipients were 

able to fulfill their reporting 

requirements and the processes in 

place to help ensure data quality 

and (2) how macroeconomic data 

and methods, and the recipient 

reports, can be used to assess the 

employment effects of the 

Recovery Act. GAO performed an 

initial set of basic analyses on the 

final recipient report data that first 

became available at 

www.recovery.gov on October 30, 

2009; reviewed documents; 

interviewed relevant state and 

federal officials; and conducted 

fieldwork in selected states, 

focusing on a sample of highway 

and education projects. 

GAO is recommending steps OMB 

should take in continuing to work 

with federal agencies to increase 

recipients’ understanding of the 

reporting requirements and 

guidance. OMB staff generally 

agreed with our recommendations. 

What GAO Found

As of September 30, 2009, approximately $173 billion of the $787 billion—or 

about 22 percent—of the total funds provided by the Recovery Act had been 

paid out by the federal government. Nonfederal recipients of Recovery Actfunded grants, contracts, and loans are required to submit reports with 

information on each project or activity, including the amount and use of funds 

and an estimate of jobs created or retained. Of the $173 billion in funds paid 

out, about $47 billion—a little more than 25 percent—is covered by this 

recipient report requirement. Neither individuals nor recipients receiving funds 

through entitlement programs, such as Medicaid, or through tax programs are 

required to report. In addition, the required reports cover direct jobs created 

or retained as a result of Recovery Act funding; they do not include the 

employment impact on materials suppliers (indirect jobs) or on the local 

community (induced jobs). (See figure.) 

United States Government Accountability Office

Highlights

Accountability Integrity Reliability

Fiscal Year 2009 Recovery Act Funds Paid Out and Recipient Reporting Coverage 

Source: GAO.

Contracts, 

grants,

and loans

$47

Entitlements

$63.7

Tax relief

$62.5

Recipient

reporting

coverage

Induced

Indirect

Direct

Total=$173

Potential employment effects of Recovery 

Act contracts, grants and loans

Recovery Act funds paid out, end of 

fiscal year 2009 (in billions)

What GAO Recommends

On October 30, www.recovery.gov (the federal Web site on Recovery Act 

spending) reported that more than 100,000 recipients reported hundreds of 

thousands of jobs created or retained. Given the national scale of the recipient 

reporting exercise and the limited time frames in which it was implemented, 

the ability of the reporting mechanism to handle the volume of data from a 

wide variety of recipients represents a solid first step in moving toward more 

transparency and accountability for federal funds. Because this effort will be 

an ongoing process of cumulative reporting, GAO’s first review represents a 

snapshot in time. 

Data Reporting and Quality 

While recipients GAO contacted appear to have made good faith efforts to 

ensure complete and accurate reporting, GAO’s fieldwork and initial review 

and analysis of recipient data from www.recovery.gov, indicate that there are a 

range of significant reporting and quality issues that need to be addressed.
United States Government Accountability Office

Highlights of GAO-10-223 (continued) 

For example, GAO’s review of prime recipient reports 

identified the following: GAO will continue to monitor and review the data 

reporting and quality issues in its bimonthly reviews and 

fieldwork on the use of funds in the 16 states and the 

District of Columbia, and in GAO’s analysis of future 

quarterly recipient reporting. 

Erroneous or questionable data entries that merit 

further review: 

• 3,978 reports that showed no dollar amount 

received or expended but included more than 

50,000 jobs created or retained; Recommendations for Executive Action

To improve the consistency of FTE data collection and 

reporting, OMB should (1) clarify the definition and 

standardize the period of measurement for FTEs and 

work with federal agencies to align this guidance with 

OMB’s guidance and across agencies; (2) given its 

reporting approach, consider being more explicit that 

“jobs created or retained” are to be reported as hours 

worked and paid for with Recovery Act funds; and (3) 

continue working with federal agencies and encourage 

them to provide or improve program-specific guidance 

to assist recipients, especially as it applies to the fulltime equivalent calculation for individual programs. 

• 9,247 reports that showed no jobs but included 

expended amounts approaching $1 billion, and 

• Instances of other reporting anomalies such as 

discrepancies between award amounts and the 

amounts reported as received which, although 

relatively small in number, indicate problematic 

issues in the reporting. 

Coverage: While OMB estimates that more than 90 

percent of recipients reported, questions remain about 

the other 10 percent. 

Quality review: While less than 1 percent were marked 

as having undergone review by the prime recipient, over 

three quarters of the prime reports were marked as 

having undergone review by a federal agency. 

OMB should also work with the Recovery Accountability 

and Transparency Board and federal agencies to reexamine review and quality assurance processes, 

procedures, and requirements in light of experiences and 

identified issues with this round of recipient reporting 

and consider whether additional modifications need to 

be made and if additional guidance is warranted. 

Full-time equivalent (FTE) calculations: 

Under OMB guidance, jobs created or retained were to 

be expressed as FTEs. GAO found that data were 

reported inconsistently even though significant guidance 

and training was provided by OMB and federal agencies. 

While FTEs should allow for the aggregation of different 

types of jobs—part time, full time or temporary—

differing interpretations of the FTE guidance 

compromise the ability to aggregate the data. 

Employment Effects

Even if the data quality issues are resolved, it is 

important to recognize that the FTEs in recipient reports 

alone do not reflect the total employment effects of the 

Recovery Act. As noted, these reports solely reflect 

direct employment arising from the expenditure of less 

than one-third of Recovery Act funds. Therefore, both 

the data reported by recipients and other 

macroeconomic data and methods are necessary to 

gauge the overall employment effects of the stimulus. 

The Recovery Act includes entitlements and tax 

provisions, which also have employment effects. The 

employment effects in any state will vary with labor 

market stress and fiscal condition, as discussed in this 

report. 

To illustrate, in California, two higher education systems 

calculated FTE differently. In the case of one, officials 

chose to use a 2-month period as the basis for the FTE 

performance period. The other chose to use a year as the 

basis for the FTE. The result is almost a three-to-one 

difference in the number of FTEs reported for each 

university system in the first reporting period. Although 

the Department of Education provides alternative 

methods for calculating an FTE, in neither case does the 

guidance explicitly state the period of performance of 

the FTE. 

Although there were problems of inconsistent 

interpretation of the guidance, the reporting process 

went relatively well for highway projects. Transportation 

had an established procedure for reporting prior to 

enactment of the Recovery Act. In the cases of 

Education and Housing, which do not have this prior 

reporting experience, GAO found more problems. Some 

of these have been reported in the press. State and 

federal officials are examining these problems and have 

stated their intention to deal with them. 
Page i GAO-10-223 

Contents 

Letter 1

Background 4 

Recipients of Recovery Act Funds We Contacted Appear to Have 

Made Good Faith Efforts to Ensure Complete and Accurate 

Reporting, but It Will Take Time to Improve Data Quality 15 

Recommendations for Executive Action 40 

Despite Limitations, Economic Methods and Recipient Reports 

Together Can Provide Insight into the Employment Effects of 

Fiscal Stimulus 40 

Agency Comments 58 

Appendix I Calculating Full-Time Equivalent Data—Examples of 

Guidance and Challenges 61 

Appendix II Department of Education Calculations to Determine 

Full-Time Equivalents (FTE) for Jobs Created or 

Retained 69 

Appendix III GAO Contacts and Staff Acknowledgments 71 

Tables 

Table 1: Jobs Created or Retained by States as Reported by 

Recipients of Recovery Act Funding 13 

Table 2: Jobs Created or Retained by Federal Program Agency as 

Reported by Recipients of Recovery Act Funding 14 

Table 3: Count of Prime Recipient Reports by Presence or Absence 

of FTEs and Recovery Act Funds Received or Expended 16 

Table 4: Aggregation of FHWA FTE Data 20 

Table 5: OMB’s Cumulative FTE versus a Standardized Measure 21 

Table 6: Prime Recipient Reports Reviews and Corrections 29 

Table 7: Estimated Multipliers for Recovery Act Spending and Tax 

Expenditures 45 

Table 8: State Unemployment Rates, Peak and Most Recent 51 

Table 9: Change in Employment, December 2007 to September 

2009 52 

Table 10: Derivation of Number of Hours Created or Retained 69 

 Recovery Act 
Figures 

Figure 1: The Potential Employment Effects of Recovery Act Funds 7 

Figure 2: Recipient Reporting Time Frame 11 

Figure 3: Distribution of Recovery Act Funds through the End of 

Fiscal Year 2009 12 

Figure 4: FHWA’s Recipient Reporting Data Structure 32 

Figure 5: Composition of Recovery Act Outlays by Jobs Multiplier 

Category 46 

Figure 6: State Unemployment Rates, September 2009 48 

Figure 7: State Unemployment Rate Growth during Recession 

(Percent Increase) 50 

Figure 8: State and Local Tax Receipts 55 

Figure 9: Total Year-End Balances as a Percentage of 

Expenditures, Fiscal Year 2009 57 

Page ii GAO-10-223 Recovery Act
Abbreviations 

CBO Congressional Budget Office 

CCR Central Contractor Registration 

CEA Council of Economic Advisers 

CFDA Catalog of Federal Domestic Assistance 

CIO chief information officer 

DOT Department of Transportation 

EBO Equitable Business Opportunities 

Education Department of Education 

FDOT Florida Department of Transportation 

FHWA Federal Highway Administration 

FRPIN Federal Reporting Personal Identification Number 

FTE full-time equivalent 

GDOT Georgia Department of Transportation 

GDP gross domestic product 

HHS Department of Health and Human Services 

HUD Department of Housing and Urban Development 

IG inspector general 

LEA local education agency 

OIG Office of Inspector General 

OMB Office of Management and Budget 

RADS Recovery Act Data System 

RAMPS Recovery Act Management and Performance System 

Recovery 

 Act American Recovery and Reinvestment Act of 2009 

Recovery 

 Board Recovery Accountability and Transparency Board 

SEA state education agency 

SFSF State Fiscal Stabilization Fund 

TAS Treasury Account Symbol 

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Page iii GAO-10-223 Recovery Act
United States Government Accountability Office

Washington, DC 20548 

 

Page 1 GAO-10-223 

 

November 19, 2009 

Report to the Congress 

Congress and the new administration crafted the American Recovery and 

Reinvestment Act of 2009 (Recovery Act)1

 with the broad purpose of 

stimulating the economy. One of the express purposes of the act was to 

preserve and create jobs. To help measure the progress of this effort, 

Congress and the administration built into the act numerous provisions to 

increase transparency and accountability over spending that require 

recipients of Recovery Act funding to report quarterly on a number of 

measures. Nonfederal recipients of Recovery Act funded grants, contracts, 

or loans are required to submit reports with information on each project 

or activity, including the amount and use of funds and an estimate of the 

jobs created or retained.2

 Neither individuals nor recipients receiving 

funds through entitlement programs, such as Medicaid, or tax programs 

are required to report. The first of these recipient reports cover cumulative 

activity since the Recovery Act’s passage in February 2009 through the 

quarter ending September 30, 2009. The Recovery Act requires GAO to 

comment on the estimates of jobs created or retained in the recipient 

reports no later than 45 days after recipients have reported.3

 The final 

recipient reporting data for the first round of reports were first made 

available on October 30, 2009. 

The transparency that is envisioned for tracking Recovery Act spending 

and results is unprecedented for the federal government. Both Congress 

and the President have emphasized the need for accountability, efficiency, 

and transparency in the expenditure of Recovery Act funds and have made 

it a central principle of the act. As Congress finished work on the 

Recovery Act, the House Appropriations Committee released a statement 

saying, “A historic level of transparency, oversight and accountability will 

help guarantee taxpayer dollars are spent wisely and Americans can see 

results for their investment.” In January, the new administration pledged 

that the Recovery Act would “break from conventional Washington 

1

Pub. L. 111-5, 123 Stat. 115 (Feb. 17, 2009). 

2

Recovery Act, div. A, § 1512. We will refer to the quarterly reports required by section 1512 

as recipient reports. 

3

The Congressional Budget Office (CBO) is also required by the act to comment on the 

estimates of jobs created or retained no later than 45 days after recipients have reported. 

 Recovery Act 
 

approaches to spending by ensuring that public dollars are invested 

effectively and that the economic recovery package is fully transparent 

and accountable to the American people.” However, tracking billions of 

dollars that are being disbursed to thousands of recipients is an enormous 

effort. The administration expects that achieving this degree of visibility 

will be an iterative process in which the reporting process and information 

improve over time and, if successful, could be a model for transparency 

and oversight beyond the Recovery Act. 

This report, the first in response to the Recovery Act’s section 1512 

mandate that GAO comment on the estimates of jobs created or retained 

by direct recipients of Recovery Act funds, addresses the following: (1) the 

extent to which recipients were able to fulfill their reporting requirements 

and the processes in place to help ensure recipient reporting data quality 

and (2) how macroeconomic data and methods, and the recipient reports, 

can be used to assess the employment effects of the Recovery Act, and the 

limitations of the data and methods. 

To meet our objectives, we performed an initial set of edit checks and 

basic analyses on the final recipient report data that first became available 

at www.recovery.gov, the federal government’s official Web site on 

Recovery Act spending, on October 30, 2009. We calculated the overall 

sum, as well as sum by states, for the number of full-time equivalents 

(FTE) reported, award amount, and amount received and found that they 

corresponded closely with the values shown for these data on 

Recovery.gov. We built on information collected at the state, local, and 

program level as part of our bimonthly reviews of selected states’ and 

localities’ uses of Recovery Act funds. These bimonthly reviews focus on 

Recovery Act implementation in 16 states and the District of Columbia, 

which contain about 65 percent of the U.S. population and are estimated 

to receive collectively about two-thirds of the intergovernmental federal 

assistance funds available through the Recovery Act. A detailed 

description of the criteria used to select the core group of 16 states and the 

District is found in appendix I of our April 2009 Recovery Act bimonthly 

Page 2 GAO-10-223 Recovery Act
 

Page 3 GAO-10-223 Recovery Act 

report.4 Prime recipients and delegated subrecipients5 had to prepare and 

enter their information by October 10, 2009. The days following up to 

October 30, 2009, included the data review period, and as noted 

previously, on October 30, 2009, the first round of recipient reported data 

was made public. Over the course of three different interviews, two with 

prime recipients of Recovery Act funding and one with subrecipients, we 

visited the 16 selected states and the District of Columbia during late 

September and October 2009. We discussed with prime recipients projects 

associated with 50 percent of the total funds reimbursed, as of September 

4, 2009, for that state, in the Federal-Aid Highway Program administered 

by the Department of Transportation (DOT). Prior to the start of the 

reporting period on October 1, we reviewed prime recipients’ plans for the 

jobs data collection process. After the October 10 data reporting period, 

we went back to see if prime recipients followed their own plans and 

subsequently talked with at least two vendors in each state to gauge their 

reactions to the reporting process and assess the documentation they were 

required to submit. 

We gathered and examined issues raised by recipients in these 

jurisdictions regarding reporting and data quality and interviewed 

recipients on their experiences using the Web site reporting mechanism. 

During the interviews, we used a series of program reviews and 

semistructured interview guides that addressed state plans for managing, 

tracking, and reporting on Recovery Act funds and activities. In a similar 

way, we examined a nonjudgmental sample of Department of Education 

(Education) Recovery Act projects at the prime and subrecipient level. We 

also collected information from transit agencies as part of our bimonthly 

Recovery Act reviews. In addition, we interviewed federal agency officials 

who have responsibility for ensuring a reasonable degree of quality across 

their program’s recipient reports. We assessed the reports from the 

Inspector Generals (IG) on Recovery Act data quality review from 15 

 

4

GAO, Recovery Act: As Initial Implementation Unfolds in States and Localities, 

Continued Attention to Accountability Issues Is Essential, GAO-09-580 (Washington, D.C.: 

Apr. 23, 2009). 

5

Prime recipients are nonfederal entities that receive Recovery Act funding as federal 

awards in the form of grants, loans, or cooperative agreements directly from the federal 

government. Subrecipients are nonfederal entities that are awarded Recovery Act funding 

through a legal instrument from the prime recipient to support the performance of any 

portion of the substantive project or program for which the prime recipient received the 

Recovery Act funding. Additionally, applicable terms and conditions of the federal award 

are carried forward to the subrecipient. 
 

agencies. We are also continuing to monitor and follow up on some of the 

major reporting issues identified in the media and by other observers. For 

example, a number of press articles have discussed concerns with the jobs 

reporting done by Head Start grantees. According to a Health and Human 

Services (HHS) Recovery Act official, HHS is working with the Office of 

Management and Budget (OMB) to clarify the reporting policy as it applies 

to Head Start grantees. We will be reviewing these efforts as they move 

forward. 

To address our second objective, we analyzed economic and fiscal data 

using standard economic principles and reviewed the economic literature 

on the effect of monetary and fiscal policies for stimulating the economy. 

We also reviewed guidance that OMB developed for Recovery Act 

recipients to follow in estimating the effect of funding activities on 

employment, reviewed reports that the Council of Economic Advisers 

(CEA) issued on the macroeconomic effects of the Recovery Act, and 

interviewed officials from the CEA, OMB, and the Congressional Budget 

Office (CBO). 

We conducted this performance audit with field work beginning in late 

September 2009 and began analysis of the recipient data that became 

available on October 30, 2009, in accordance with generally accepted 

government auditing standards. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a 

reasonable basis for our findings and conclusions based on our audit 

objectives. We believe that the evidence obtained provides a reasonable 

basis for our findings and conclusions based on our audit objectives. 

In December 2007, the United States entered what has turned out to be its 

deepest recession since the end of World War II. Between the fourth 

quarter of 2007 and the third quarter of 2009, gross domestic product 

(GDP) fell by about 2.8 percent, or $377 billion. The unemployment rate 

rose from 4.9 percent in 2007 to 10.2 percent in October 2009, a level not 

seen since April 1983. The CBO projects that the unemployment rate will 

remain above 9 percent through 2011. 

Background 

Confronted with unprecedented weakness in the financial sector and the 

overall economy, the federal government and the Federal Reserve together 

acted to moderate the downturn and restore economic growth. The 

Federal Reserve used monetary policy to respond to the recession by 

pursuing one of the most significant interest rate reductions in U.S. 

history. In concert with the Department of the Treasury, it went on to 

Page 4 GAO-10-223 Recovery Act
 

bolster the supply of credit in the economy through measures that provide 

Federal Reserve backing for a wide variety of loan types, from mortgages 

to automobile loans to small business loans. The federal government also 

used fiscal policy to confront the effects of the recession. Existing fiscal 

stabilizers, such as unemployment insurance and progressive aspects of 

the tax code, kicked in automatically in order to ease the pressure on 

household income as economic conditions deteriorated. In addition, 

Congress enacted a temporary tax cut in the first half of 2008 to buoy 

incomes and spending6

 and created the Troubled Asset Relief Program7 in 

the second half of 2008 to give Treasury authority to act to restore 

financial market functioning.8

The federal government’s largest response to the recession to date came in 

early 2009 with the passage of the Recovery Act, the broad purpose of 

which is to stimulate the economy’s overall demand for goods and 

services, or aggregate demand. The Recovery Act is specifically intended 

to preserve and create jobs and promote economic recovery; to assist 

those most impacted by the recession; to provide investments needed to 

increase economic efficiency by spurring technological advances in health 

and science; to invest in transportation, environmental protection, and 

other infrastructure that will provide long-term economic benefits; and to 

stabilize the budgets of state and local governments.9

 The CBO estimates 

that the net cost of the Recovery Act will total approximately $787 billion 

from 2009 to 2019. 

The Recovery Act uses a combination of tax relief and government 

spending to accomplish its goals. The Recovery Act’s tax cuts include 

reductions to individuals’ taxes, payments to individuals in lieu of 

reductions to their taxes, adjustments to the Alternative Minimum Tax, 

and business tax incentives. Tax cuts encompass approximately one-third 

of the Recovery Act’s dollars. Recovery Act spending includes temporary 

increases in entitlement programs to aid people directly affected by the 

 

6

Economic Stimulus Act of 2008, Pub. L. No. 110-185, 122 Stat. 613 (Feb. 13, 2008). 

7

GAO, Troubled Asset Relief Program: One Year Later, Actions Are Needed to Address 

Remaining Transparency and Accountability Challenges, GAO-10-16 (Washington, D.C.: 

Oct. 8, 2009). 

8

Emergency Economic Stabilization Act of 2008, Pub. L. No. 110-343, 122 Stat. 3765 (Oct. 3, 

2008), codified at 12 U.S.C. § § 5201 5261. 

9

Recovery Act, § 3. 

Page 5 GAO-10-223 Recovery Act
 

recession and provide some fiscal relief to states; this also accounts for 

about one third of the Recovery Act. For example, the Recovery Act 

temporarily increased and extended unemployment benefits, temporarily 

increased the rate at which the federal government matched states 

Medicaid expenditures, and provided additional funds for the 

Supplemental Nutrition Assistance and the Temporary Aid to Needy 

Families programs, among other things. Other spending, also accounting 

for about a third of the act falls into the category of grants, loans, and 

contracts. This includes government purchases of goods and services, 

grants to states through programs such as the State Fiscal Stabilization 

Fund for education and other government services, and government 

investment in infrastructure, health information technology, renewable 

energy research, and other areas. 

In interpreting recipient reporting data, it is important to recognize that 

the recipient reporting requirement only covers a defined subset of the 

Recovery Act’s funding. The reporting requirements apply only to 

nonfederal recipients of funding, including all entities receiving Recovery 

Act funds directly from the federal government such as state and local 

governments, private companies, educational institutions, nonprofits, and 

other private organizations. OMB guidance, consistent with the statutory 

language in the Recovery Act, states that these reporting requirements 

apply to recipients who receive funding through the Recovery Act’s 

discretionary appropriations, not recipients receiving funds through 

entitlement programs, such as Medicaid, or tax programs. Recipient 

reporting also does not apply to individuals. In addition, the required 

reports cover only direct jobs created or retained as a result of Recovery 

Act funding; they do not include the employment impact on materials 

suppliers (indirect jobs) or on the local community (induced jobs). Figure 

1 shows the division of total Recovery Act funds and their potential 

employment effects. 

Page 6 GAO-10-223 Recovery Act
 

Figure 1: The Potential Employment Effects of Recovery Act Funds 

Source: GAO.

Total Recovery Act funds (in billions) Potential employment effects of Recovery Act funds

Contracts, grants,

and loans

$275

Entitlements

$224 Tax relief

$288

Recipient reporting

coverage

Tax relief

employment

 effect

Entitlements

employment

effect

Contracts, grants,

and loans

Induced

Indirect

Direct

Total=$787

Note: The potential employment effects of the different types of Recovery Act funds are based on 

historical data and are reflected in the size of the circles. 

Tracing the effects of the Recovery Act through the economy is a 

complicated task. Prospectively, before the act’s passage or before funds 

are spent, the effects can only be projected using economic models that 

represent the behavior of governments, firms, and households. While 

funds are being spent, some effects can be observed but often relevant 

data on key relationships and indicators in the economy are available only 

with a lag, thereby complicating real-time assessments. When a full range 

of data on outcomes becomes available, economic analysts undertake 

retrospective analyses, where the findings are often used to guide future 

policy choices and to anticipate effects of similar future policies. Stimulus 

spending under the broad scope of the Recovery Act will reverberate at 

the national, regional, state, and local levels. Models of the national 

economy provide the most comprehensive view of policy effects, but they 

do not provide insight, except indirectly, about events at smaller 

geographical scales. The diversity and complexity of the components of 

the national economy are not fully captured by any set of existing 

economic models. Some perspective can be gained by contemporaneous 

close observation of the actions of governments, firms, and households, 

Page 7 GAO-10-223 Recovery Act
 

but a complete and accurate picture of the Recovery Act’s impact will 

emerge only slowly. 

Section 1512 of the Recovery Act requires recipients of recovery funds to 

report on those funds each calendar quarter. These recipient reports are to 

be filed for any quarter in which a recipient receives Recovery Act funds 

directly from the federal government. The recipient reporting requirement 

covers all funds made available by appropriations in division A of the 

Recovery Act. The reports are to be submitted no later than 10 days after 

the end of each calendar quarter in which the recipient received Recovery 

Act funds. Each report is to include the total amount of Recovery Act 

funds received, the amount of funds expended or obligated to projects or 

activities, and a detailed list of those projects or activities. For each 

project or activity, the detailed list must include its name and a 

description, an evaluation of its completion status, and an estimate of the 

number of jobs created or the number of jobs retained by that project or 

activity. Certain additional information is also required for infrastructure 

investments made by state and local governments. Also, the recipient 

reports must include detailed information on any subcontracts or 

subgrants as required by the Federal Funding Accountability and 

Transparency Act of 2006.10 Section 1512(e) of the Recovery Act requires 

GAO and CBO to comment on the estimates of jobs created or retained 

reported by recipients. 

In its guidance to recipients for estimating employment effects, OMB 

instructed recipients to report only the direct employment effects as “jobs 

created or retained” as a single number.11 Recipients are not expected to 

report on the employment impact on materials suppliers (indirect jobs) or 

on the local community (induced jobs). According to the guidance, “A job 

created is a new position created and filled or an existing unfilled position 

that is filled as a result of the Recovery Act; a job retained is an existing 

position that would not have been continued to be filled were it not for 

Recovery Act funding. Only compensated employment . . . should be 

reported. The estimate of the number of jobs . . . should be expressed as 

‘full-time equivalents (FTE),’ which is calculated as total hours worked in 

jobs created or retained divided by the number of hours in a full-time 

schedule, as defined by the recipient.” Consequently, the recipients are 

 

10Pub. L. No 109-282, 120 Stat. 1186 (Sept. 26, 2006). 

11OMB Memoranda, M-09-21, Implementing Guidance for the Reports on Use of Funds 

Pursuant to the American Recovery and Reinvestment Act of 2009 (June 22, 2009). 

Page 8 GAO-10-223 Recovery Act
 

expected to report the amount of labor hired or not fired as result of 

having received Recovery Act funds. It should be noted that one FTE does 

not necessarily equate to the job of one person. Firms may choose to 

increase the hours of existing employees, for example, which can certainly 

be said to increase employment but not necessarily be an additional job in 

the sense of adding a person to the payroll. 

To implement the recipient reporting data requirements, OMB has worked 

with the Recovery Accountability and Transparency Board (Recovery 

Board)12 to deploy a nationwide data collection system at 

www.federalreporting.gov (Federalreporting.gov), while the data reported 

by recipients are available to the public for viewing and downloading on 

www.recovery.gov (Recovery.gov). Recovery.gov, a site designed to 

provide transparency of information related to spending on Recovery Act 

programs, is the official source of information related to the Recovery Act. 

The Recovery Board’s goals for the Recovery Act Web site include 

promoting accountability by providing a platform to analyze Recovery Act 

data and serving as a means of tracking fraud, waste, and abuse allegations 

by providing the public with accurate, user-friendly information. In 

addition, the site promotes official data in public debate, assists in 

providing fair and open access to Recovery Act opportunities, and 

promotes an understanding of the local impact of Recovery Act funding. 

In an effort to address the level of risk in recipient reporting, OMB’s June 

22, 2009, guidance13 on recipient reporting includes a requirement for data 

quality reviews. OMB’s data quality guidance is intended to address two 

key data problems—material omissions and significant reporting errors. 

Material omissions and significant reporting errors are risks that the 

information is incomplete and inaccurate.14 As shown in figure 2, OMB 

 

12The Recovery Act created the Recovery Accountability and Transparency Board, which is 

composed of 12 Inspectors General from various federal agencies, who serve with a 

chairman of the board. Recovery Act, § 1522.The board issues quarterly and annual reports 

on Recovery Act activities to Congress and the President. The board is also to issue “flash 

reports” under the statute. 

13OMB Memoranda, M-09-21. 

14Material omissions are defined as instances where required data are not reported or 

reported information is not otherwise responsive to the data requests resulting in a 

significant risk that the public is not fully informed as to the status of a Recovery Act 

project or activity. Significant reporting errors are defined as those instances where 

required data are not reported and such erroneous reporting results in significant risk that 

the public will be misled or confused by the recipient report in question. 

Page 9 GAO-10-223 Recovery Act
 

gave specific time frames for reporting that allow prime recipients and 

delegated subrecipients to prepare and enter their information on days 1 

through 10 following the end of the quarter. During days 11 through 21, 

prime recipients will be able to review the data to ensure that complete 

and accurate reporting information is provided prior to a federal agency 

review and comment period beginning on the 22nd day. During days 22 to 

29 following the end of the quarter, federal agencies will perform data 

quality reviews and will notify the recipients and delegated subrecipients 

of any data anomalies or questions. The original submitter must complete 

data corrections no later than the 29th day following the end of the 

quarter. Prime recipients have the ultimate responsibility for data quality 

checks and the final submission of the data. Since this is a cumulative 

reporting process, additional corrections can take place on a quarterly 

basis. 

Page 10 GAO-10-223 Recovery Act
 

Figure 2: Recipient Reporting Time Frame 

Recipients

reports

published on 

Recovery.gov

Next quarterly 

reporting cycle 

begins—updates

reflected 

cumulatively

Agency review 

of data

submitted

Prime 

recipients

review data

submitted by 

subrecipients

Prime

recipients and

subrecipients

make

corrections

Prime

recipients and

subrecipients

make

corrections

No less than 35 days

prior to the end of the 

quarter

1-10 days after end of quarter 11-21 days after end of quarter 22-29 days after end of quarter 30 days after 

end of quarter

90 days after 

end of quarter

Prime recipients

and delegated 

subrecipients

enter draft 

reporting data

Prime and 

subrecipient 

registration

Initial 

submission

2 4 6

9

8

1 3 5 7

Agency “view only” Agency comment period

Recipient report adjustments possible

45 days

Sources: OMB and GAO.

GAO Issues comments on

jobs created and retained

By 10 days after 

end of quarter

OMB guidance does not explicitly mandate a methodology for conducting 

data quality reviews at the prime and delegated subrecipient level or by 

the federal agencies. Instead, the June 22, 2009, guidance provides the 

relevant party conducting the data quality review with discretion in 

determining the optimal method for detecting and correcting material 

omissions or significant reporting errors. The guidance says that, at a 

minimum, federal agencies, recipients, and subrecipients should establish 

internal controls to ensure data quality, completeness, accuracy, and 

timely reporting of all amounts funded by the Recovery Act. 

The Recovery Board published the results of the first round of recipient 

reporting on Recovery.gov on October 30, 2009. According to the Web site, 

recipients submitted 130,362 reports indicating that 640,329 “jobs” were 

created or saved as a direct result of the Recovery Act. These data solely 

reflect the direct FTEs reported by recipients of Recovery Act grants, 

Page 11 GAO-10-223 Recovery Act
 

contracts, and loans for the period beginning when the act was signed into 

law on February 17, 2009 through September 30, 2009. As shown in figure 

3, grants, contracts, and loans account for about 27 percent, or $47 billion, 

of the approximately $173 billion in Recovery Act funds paid out as of 

September 30, 2009. 

Figure 3: Distribution of Recovery Act Funds through the End of Fiscal Year 2009 

Source: Recovery.gov.

36%

37%

Entitlements ($63.7 billion)

Contracts, grants, and loans ($47 billion)

Tax relief ($62.5 billion)

27%

Total=$173 billion

Recipients in all 50 states reported jobs created or retained with Recovery 

Act funding provided through a wide range of federal programs and 

agencies. Table 1 shows the distribution of jobs created or retained across 

the nation as reported by recipients on Recovery.gov. Not surprisingly, 

California, the most populous state, received the most Recovery Act 

dollars and accounted for the largest number of the reported jobs created 

or retained. 

Page 12 GAO-10-223 Recovery Act
 

Table 1: Jobs Created or Retained by States as Reported by Recipients of Recovery Act Funding 

Rank State Jobs Rank State Jobs Rank State Jobs

1 California 110,185 19 Oregon 9,653 37 Arkansas 3,742 

2 New York 40,620 20 Tennessee 9,548 38 New Hampshire 3,528 

3 Washington 34,517 21 Louisiana 9,136 39 Mississippi 3,433

4 Florida 29,321 22 Oklahoma 8,747 40 Nebraska 2,840 

5 North Carolina 28,073 23 Virginia 8,617 41 West Virginia 2,409 

6 Georgia 24,681 24 South Carolina 8,147 42 Alaska 2,315 

7 Illinois 24,448 25 Colorado 8,094 43 District of Columbia 2,274 

8 New Jersey 24,109 26 Connecticut 7,551 44 South Dakota 2,198 

9 Michigan 22,514 27 Pennsylvania 7,427 45 Idaho 2,103

10 Texas 19,572 28 Maryland 6,748 46 Vermont 2,030 

11 Indiana 18,876 29 Utah 6,598 47 Rhode Island 2,012 

12 Puerto Rico 17,597 30 Montana 6,427 48 Maine 1,613

13 Ohio 17,095 31 Kansas 5,935 49 Hawaii 1,545 

14 Missouri 15,149 32 Nevada 5,667 50 North Dakota 1,293

15 Minnesota 14,315 33 Iowa 5,323 51 Delaware 1,170 

16 Massachusetts 12,374 34 New Mexico 5,230 52 Wyoming 860 

17 Arizona 12,283 35 Alabama 4,884 Other 1,232 

18 Wisconsin 10,073 36 Kentucky 4,202 Total 640,329 

Source: Recovery.gov. 

Notes: 

Includes the District of Columbia and Puerto Rico. 

“Other” includes all other U.S. territories and data that could not be assigned to a specific state. 

Total may not add due to rounding. 

Table 2 shows the number and share of jobs created or retained by federal 

program agencies as reported by recipients of Recovery Act funding. The 

Department of Education accounted for nearly 400,000 or close to twothirds of the reported jobs created or retained. According to the 

Department of Education, this represents about 325,000 education jobs 

such as teachers, principals, and support staff in elementary and 

secondary schools, and educational, administrative, and support personnel 

in institutions of higher education funded primarily through the State 

Fiscal Stabilization Fund (SFSF).15 In addition, approximately 73,000 other 

 

15States must allocate 81.8 percent of their SFSF funds to support education (education 

stabilization funds), and must use the remaining 18.2 percent for public safety and other 

government services, which may include education (government services funds). 

Page 13 GAO-10-223 Recovery Act
 

jobs (including both education and noneducation positions) were reported 

saved or created from the SFSF Government Services Fund, the Federal 

Work Study Program, and Impact Aid funds. 

Table 2: Jobs Created or Retained by Federal Program Agency as Reported by 

Recipients of Recovery Act Funding 

Department/agency Jobs Percent of total

Education 398,006 62.2

Labor 76,223 11.9

Transportation 46,593 7.3

Health and Human Services 28,616 4.5

Housing and Urban Development 28,559 4.5

Defense 11,239 1.8

Energy 10,021 1.6

Agriculture 6,273 1.0

Justice 5,575 0.9

Corps of Engineers 4,354 0.7

Environmental Protection Agency 4,191 0.7

National Science Foundation 2,510 0.4

Federal Communications Commission 1,929 0.3

Interior 1,780 0.3

Treasury 1,454 0.2

Homeland Security 1,305 0.2

All others 11,701 1.8

Total 640,329 100.0

Source: Recovery.gov. 

Note: Totals may not add due to rounding. 

Page 14 GAO-10-223 Recovery Act
 

Recipients of 

Recovery Act Funds 

We Contacted Appear 

to Have Made Good 

Faith Efforts to 

Ensure Complete and 

Accurate Reporting, 

but It Will Take Time 

to Improve Data 

Quality 

While recipients GAO contacted appear to have made good faith efforts to 

ensure complete and accurate reporting, GAO’s fieldwork and initial 

review and analysis of recipient data from www.recovery.gov, indicate 

that there are a range of significant reporting and quality issues that need 

to be addressed. Collecting information from such a large and varied 

number of entities in a compressed time frame, as required by the 

Recovery Act, is a huge task. Major challenges associated with the new 

Recovery Act reporting requirements included educating recipients about 

the reporting requirements and developing the systems and infrastructure 

for collecting and reporting the required information. While recipients in 

the states we reviewed generally made good faith efforts to report 

accurately, there is evidence, including numerous media accounts, that the 

data reporting has been somewhat inconsistent. Even recipients of similar 

types of funds appear to have interpreted the reporting guidance in 

somewhat different ways and took different approaches in how they 

developed their jobs data. The extent to which these reporting issues 

affect overall data quality is uncertain at this point. As existing recipients 

become more familiar with the reporting system and requirements, these 

issues may become less significant although communication and training 

efforts will need to be maintained and in some cases expanded as new 

recipients of Recovery Act funding enter the system. Because this effort 

will be an ongoing process of cumulative reporting, our first review 

represents a snapshot in time. 

Initial Observations on 

Recipient Reporting Data 

Identify Areas Where 

Further Review and 

Guidance Are Needed 

We performed an initial set of edit checks and basic analyses on the 

recipient report data available for download from Recovery.gov on 

October 30, 2009. Based on that initial review work, we identified recipient 

report records that showed certain data values or patterns in the data that 

were either erroneous or merit further review due to an unexpected or 

atypical data value or relationship between data values. For the most part, 

the number of records identified by our edit checks was relatively small 

compared to the 56,986 prime recipient report records included in our 

review. 

As part of our review, we examined the relationship between recipient 

reports showing the presence or absence of any FTE counts with the 

presence or absence of funding amounts shown in either or both data 

fields for amount of Recovery Act funds received and amount of Recovery 

Act funds expended. Forty four percent of the prime recipient reports 

showed an FTE value. As shown in table 3, we identified 3,978 prime 

recipient reports where FTEs were reported but no dollar amount was 

reported in the data fields for amount of Recovery Act funds received and 

Page 15 GAO-10-223 Recovery Act
 

amount of Recovery Act funds expended. These records account for 

58,386 of the total 640,329 FTEs reported. 

Table 3: Count of Prime Recipient Reports by Presence or Absence of FTEs and 

Recovery Act Funds Received or Expended 

Recovery Act funds 

Reports 

with FTEs 

Reports

without FTEs

Received or expended funds reporteda 21,280 

(84%) 

9,247

(29%)

No received or expended funds reported 3,978 

(16%) 

22,481

(71%)

Total 

25,258

(100%) 

31,728

(100%)

Source: GAO analysis of Recovery.gov data. 

a

Prime recipient reports showing a non zero dollar amount in either or both Recovery Act funds 

received or expended data fields. 

As might be expected, 71 percent of those prime recipient reports shown 

in table 3 that did not show any FTEs also showed no dollar amount in the 

data fields for amount of Recovery Act funds received and amount 

expended. There were also 9,247 reports that showed no FTEs but did 

show some funding amount in either or both of the funds received or 

expended data fields. The total value of funds reported in the expenditure 

field on these reports was $965 million. Those recipient reports showing 

FTEs but no funds and funds but no FTEs constitute a set of records that 

merit closer examination to understand the basis for these patterns of 

reporting. 

Ten recipient reports accounted for close to 30 percent of the total FTEs 

reported. All 10 reports were grants and the majority of those reports 

described funding support for education-sector related positions. For 

reports containing FTEs, we performed a limited, automated scan of the 

job creation field of the report, which is to contain a narrative description 

of jobs created or retained. We identified 261 records where there was 

only a brief description in this job creation field and that brief text showed 

such words or phrases as “none,” “N/A,” zero, or variants thereof. For most 

of these records, the value of FTEs reported is small, but there are 10 of 

these records with each reporting 50 or more FTEs. The total number of 

FTEs reported for all 261 records is 1,776. While our scan could only 

identify limited instances of apparently contradictory information between 

the job description and the presence of an FTE number, we suspect that a 

closer and more extensive review of the job description field in relation to 

Page 16 GAO-10-223 Recovery Act
 

the count of FTEs would yield additional instances where there were 

problems, and greater attention to this relationship would improve data 

quality. 

In our other analyses of the data fields showing Recovery Act funds, we 

identified 132 records where the award amount was zero or less than $10. 

There were also 133 records where the amount reported as received 

exceeded the reported award amount by more than $10. On 17 of these 

records, the difference between the smaller amount awarded and the 

larger reported amount received exceeded $1 million. While there may be 

a reason for this particular relationship between the reported award 

amount and amount received, it may also indicate an improper keying of 

data or an interpretation of what amounts are to be reported in which 

fields that is not in accordance with the guidance. 

We calculated the overall sum and sum by states for number of FTEs 

reported, award amount, and amount received. We found that they 

corresponded closely with the values shown for these data on 

Recovery.gov. Some of the data fields we examined with known values 

such as the Treasury Account Symbol (TAS) codes and Catalog of Federal 

Domestic Assistance (CFDA) numbers16 showed no invalid values on 

recipient reports. However, our analyses show that there is reason to be 

concerned that the values shown for these data fields in conjunction with 

the data field identifying who the funding or awarding agency is may not 

be congruent. Both TAS and CFDA values are linked to specific agencies 

and their programs. We matched the reported agency codes against the 

reported TAS and CFDA codes. We identified 454 reports as having a 

mismatch on the CFDA number—therefore, the CFDA number shown on 

the report did not match the CFDA number associated with either the 

funding or awarding agency shown on the report. On TAS codes, we 

identified 595 reports where there was no TAS match. Included in the 

mismatches were 76 recipient reports where GAO was erroneously 

identified as either the funding or awarding agency. In many instances, 

review of these records and their TAS or CFDA values along with other 

 

16The TAS codes identify the Recovery Act funding program source. The two leftmost 

characters of each TAS code form a data element that is identical with the two-digit 

numerical code used in the federal budgetary process to identify major federal 

organizations. The CFDA is a governmentwide compendium of federal programs, projects, 

services, and activities that provide assistance or benefits. It contains assistance programs 

administered by departments. Each program is assigned a unique number where the first 

two digits represent the funding agency. 

Page 17 GAO-10-223 Recovery Act
 

descriptive information from the recipient report indicated the likely 

funding or awarding agencies. These mismatches suggest that either the 

identification of the agency or the TAS and CFDA codes are in error on the 

recipient report. 

Another potential problem area we identified was the provision of data on 

the number and total amount of small subawards of less than $25,000. 

There are data fields that collect information on small subawards, small 

subawards to individuals, and small subawards to vendors. There were 380 

prime recipient report records where we observed the same values being 

reported in both small subawards and small subawards to individuals. We 

also identified 1,772 other records where it could be clearly established 

that these values were being reported separately. While we are able to 

establish that these data are not being consistently reported, it is not 

possible to assess from the data alone the full extent to which subaward 

data are being combined or reported separately across all recipient 

reports. Additionally, we noted 152 reports where, in either the subawards 

or subawards to individuals data fields, the value for the number of 

subawards and the total dollar value of subawards were exactly the same 

and, as such, most likely erroneous. 

While most recipient report records were not identified as potential 

problems in these initial edit checks and analyses thus far, our results do 

indicate the need for further data quality efforts. 

Various Interpretations of 

How to Report FTEs 

Produced Questionable 

Data on Jobs Created or 

Retained 

Under OMB guidance, jobs created or retained were to be expressed as 

FTEs. We found that data were reported inconsistently even though 

significant guidance and training was provided by OMB and federal 

agencies. While FTEs should allow for the aggregation of different types of 

jobs—part-time, full-time or temporary—differing interpretations of the 

FTE guidance compromise the ability to aggregate the data. 

In addition to issuing guidance, OMB and federal agencies provided 

several types of clarifying information to recipients as well as 

opportunities to interact and ask questions or receive help with the 

reporting process. These included weekly phone calls between OMB and 

groups representing the state budget and comptrollers offices, weekly 

calls between all state reporting leads, webinars, a call center, and e-mail 

outreach. State officials reported they took advantage of and appreciated 

this outreach. For example, Ohio state officials said they were generally 

satisfied with the technical assistance and guidance provided by OMB—

specifically, the assistance it received from the Federalreporting.gov help 

Page 18 GAO-10-223 Recovery Act
 

desk staff. OMB estimated that it had a better than 90 percent response 

rate for recipient reporting and said that they answered over 3,500 

questions related to recipient reporting. 

The data element on jobs created or retained expressed in FTEs raised 

questions and concerns for some recipients. OMB staff reported that 

questions on FTEs dominated the types of questions they fielded during 

the first round of recipient reporting. Although the recipient reports 

provide a detailed account of individual projects, as Recovery.gov shows, 

these projects represent different types of activities and start and end at 

various points throughout the year, and recipients had various 

understandings of how to report an FTE. In section 5.2 of the June 22 

guidance, OMB states that “the estimate of the number of jobs required by 

the Recovery Act should be expressed as ‘full-time equivalents’ (FTE), 

which is calculated as the total hours worked in jobs retained divided by 

the number of hours in a full time schedule, as defined by the recipient.” 

Further, “the FTE estimates must be reported cumulatively each calendar 

quarter.” In section 5.3, OMB states that “reporting is cumulative across 

the project lifecycle, and will not reset at the beginning of each calendar or 

fiscal year.” 

FTE calculations varied depending on the period of performance the 

recipient reported on. For example, in the case of federal highways 

projects, some have been ongoing for six months, while others started in 

September 2009. In attempting to address the unique nature of each 

project, DOT’s Federal Highway Administration (FHWA) faced the issue of 

whether to report FTE data based on the length of time to complete the 

entire project (project period of performance) versus a standard period of 

performance such as a calendar quarter across all projects. According to 

FHWA guidance, which was permitted by OMB, FTEs reported for each 

highway project are expressed as an average monthly FTE. This means 

that for a project that started on July 1, 2009, the prime recipient would 

add up the hours worked on that project in the months of July, August, 

and September and divide that number by [(3/12 x 2,080 hours)]. For a 

project that started on August 1, 2009, the prime recipient should add up 

the hours worked on that project in the months of August and September 

and divide that number by [(2/12 x 2,080 hours)]. For a project that started 

on September, 1, 2009, the prime recipient should add up the hours 

worked on that project in the month of September and divide that number 

by [(1/12 x 2,080 hours)]. The issue of a standard performance period is 

magnified when looking across programs and across states. To 

consistently compare FTEs, or any type of fraction, across projects, one 

must use a common denominator. Comparison of FTE calculations across 

Page 19 GAO-10-223 Recovery Act
 

projects poses challenges when the projects have used different time 

periods as denominators. Tables 4 and 5 below provide more detail on the 

problems created by not having a standard performance period for 

calculating FTEs. 

Table 4 is an application of the FHWA guidance for three projects with 

varying start dates. This example illustrates the way FHWA applied the 

OMB guidance and that the way FTEs are aggregated in 

Federalreporting.gov could overstate the employment effects. In this 

example, because the 30 monthly FTE data were aggregated without 

standardizing for the quarter, FTEs would be overstated by 10 relative to 

the OMB guidance. A standardized quarterly measure and job-years are 

included as examples of a standard period of performance. A job-year is 

simply one job for 1 year. Regardless of when the project begins, the total 

hours worked is divided by a full years worth of time (12 months), which 

would enable aggregation of employment effects across programs and 

time. 

Table 4: Aggregation of FHWA FTE Data 

Project A Project B Project C 

Start date July 1 August 1 September 1 

Full-time employees 10 10 10 

Duration of project as of September 30 3 months 2 months 1 month 

Average monthly FTE per FHWA 10 10 10 

Cumulative FTE per OMB guidance 10 6.67 3.33

FTE standardized on a quarterly basis 10 6.67 3.33

Job-years 2.5 1.67 0.83

Source: GAO analysis of FHWA FTE data. 

Notes: 

Total FTE as calculated by FHWA and aggregated on Federalreporting.gov = 30. 

Total cumulative FTE per OMB guidance = 20. 

Total FTE on a standardized quarterly basis = 20. 

Total job-years = 5 (standardized FTE). 

Table 5 is an application of the OMB guidance for two projects with 

varying start dates. In this example, the OMB guidance understates the 

employment effect relative to the standardized measure. Cumulative FTE 

per OMB guidance would result in 20 FTE compared with 30 FTE when 

standardized on a quarterly basis. Both a standardized quarterly FTE 

measure and a job-year measure are included as examples of a standard 

period of performance. Regardless of when the project begins, the total 

Page 20 GAO-10-223 Recovery Act
 

hours worked is divided by a full year’s worth of time (12 months), which 

would enable aggregation of employment effects across programs and 

time. 

Table 5: OMB’s Cumulative FTE versus a Standardized Measure 

Project X Project Y 

Start date July 1 October 1 

Full-time employees 10 10 

Duration of project as of December 30 6 months 3 months 

Cumulative FTE per OMB guidance 10 10 

FTE standardized on a quarterly basis 20 10 

Job-years 5 2.5 

Source: GAO analysis of OMB FTE calculation guidance. 

Notes: 

Total Cumulative FTE per OMB guidance = 20. 

Total FTE on a standardized quarterly basis = 30. 

Total job-years = 7.5 (standardized FTE). 

There are examples from other DOT programs where the issue of a project 

period of performance created significant variation in the FTE calculation. 

For example, in Pennsylvania, each of four transit entities we interviewed 

used a different denominator to calculate the number of full-time 

equivalent jobs they reported on their recipients reports for the period 

ending September 30, 2009. Southeastern Pennsylvania Transportation 

Authority in Philadelphia used 1,040 hours as its denominator, since it had 

projects underway in two previous quarters. Port Authority of Allegheny 

County prorated the hours based on the contractors’ start date as well as 

to reflect that hours worked from September were not included due to lag 

time in invoice processing. Port Authority used 1,127 hours for contractors 

starting before April, 867 hours for contractors starting in the second 

quarter, and 347 hours for contractors starting in the third quarter. Lehigh 

and Northampton Transportation Authority in Allentown used 40 hours in 

the 1512 report they tried to submit, but, due to some confusion about the 

need for corrective action, the report was not filed. Finally, the 

Pennsylvania Department of Transportation in the report for nonurbanized 

transit systems used 1,248 hours, which was prorated by multiplying 8 

hours per workday times the 156 workdays between February 17 and 

September 30, 2009. In several other of our selected states, this variation 

across transit programs’ period of performance for the FTE calculation 

also occurred. 

Page 21 GAO-10-223 Recovery Act
 

The issue of variation in the period of performance used to calculate FTEs 

also occurred in Education programs. Across a number of states we 

reviewed, local education agencies and higher education institutions used 

a different denominator to calculate the number of FTEs they reported on 

their recipient reports for the period ending September 30, 2009. For 

example, two higher education systems in California each calculated the 

FTE differently. In the case of one, officials chose to use a two-month 

period as the basis for the FTE performance period. The other chose to 

use a year as the basis of the FTE. The result is almost a three-to-one 

difference in the number of FTEs reported for each university system in 

the first reporting period. Although Education provides alternative 

methods for calculating an FTE, in neither case does the guidance 

explicitly state the period of performance of an FTE.17

Recipients were also confused about counting a job created or retained 

even though they knew the number of hours worked that were paid for 

with Recovery Act funds. For example, the Revere Housing Authority, in 

administering one Recovery Act project, told us that they may have 

underreported jobs data from an architectural firm providing design 

services for a Recovery Act window replacement project at a public 

housing complex. The employees at the architecture firm that designed the 

window replacement project were employed before the firm received the 

Recovery Act funded contract and will continue to be employed after the 

contract has been completed, so from the Revere Housing Authority’s 

perspective there were no jobs created or retained. As another example, 

officials from one housing agency reported the number of people, by trade, 

who worked on Recovery Act related projects, but did not apply the fulltime equivalent calculation outlined by OMB in the June 22 reporting 

guidance. Officials from another public housing agency told us that they 

based the number of jobs they reported on letters from their contractors 

detailing the number of positions rather than FTEs. OMB staff said that 

thinking about the jobs created or retained as hours worked and paid for 

with Recovery Act funds was a useful way to understand the FTE 

guidance. While OMB’s guidance explains that in applying the FTE 

calculation for measuring the number of jobs created or retained 

recipients will need the total number of hours worked that are funded by 

 

17California Task Force officials said that they believed that both education agencies 

determined the estimated number of jobs created or retained within applicable federal 

agency guidance. 

Page 22 GAO-10-223 Recovery Act
 

the Recovery Act, it could emphasize this relationship more thoroughly 

throughout its guidance. 

OMB’s decision to convert jobs into FTEs provides a consistent lens to 

view the amount of labor being funded by the Recovery Act, provided each 

recipient uses a standard time frame in considering the FTE. The current 

OMB guidance, however, creates a situation where, because there is no 

standard starting or ending point, an FTE provides an estimate for the life 

of the project. Without normalizing the FTE, aggregate numbers should 

not be considered, and the issue of a standard period of performance is 

magnified when looking across programs and across states. 

Technical Reporting and 

Processing Glitches 

Occurred, but Recipients 

Were Able to Report 

Recipients we interviewed were able to report into and review data on 

Federalreporting.gov. Particularly given the scale of the project and how 

quickly it was implemented, within several months, the ability of the 

reporting mechanisms to handle the volume of data from the range of 

recipients represents a solid first step in the data collection and reporting 

process for the fulfillment of the section 1512 mandate. Nonetheless, there 

were issues associated with the functional process of reporting. For 

example, state officials with decentralized reporting structures reported 

problems downloading submitted information from Recovery.gov to 

review top-line figures such as money spent and jobs created or retained. 

The Iowa Department of Management, which did Iowa’s centralized 

reporting into Federalreporting.gov, said that, overall, the system was very 

slow. In addition to the slowness, as the system was processing input from 

Iowa’s submission, every time it encountered an error, it kicked back the 

whole submission—but it showed only the one error. After fixing the one 

errant entry, the state resubmitted its information, which would then be 

completely sent back the next time an error was encountered. Iowa 

officials believe it would have been more efficient if the system identified 

all errors in submission and sent back a complete list of errors to fix. 

Other recipient reporters we interviewed highlighted issues around 

DUNS18 numbers and other key identifiers, along with the inability to enter 

more than one congressional district for projects that span multiple 

districts. The expectation is that many of these entry and processing errors 

were captured through the review process, but the probability that all 

errors were caught is low. 

 

18A D-U-N-S number is a unique nine-digit sequence recognized as the universal standard 

for identifying and keeping track of 100 million businesses worldwide. 

Page 23 GAO-10-223 Recovery Act
 

Generally, state officials from our 17 jurisdictions reported being able to 

work through technical reporting and processing glitches. For example, 

Florida officials reported that they encountered many technical issues but 

were able to solve the problems by contacting the Recovery Board. Ohio 

officials noted that, although they were initially concerned, in spite of the 

tremendous amount of data being submitted, Federalreporting.gov held up 

well. While they faced some challenges, California officials reported that, 

overall, they were successful in reporting the numbers into 

Federalreporting.gov. They worked with the technical team at 

Federalreporting.gov and performed a test on October 1, 2009, to see if the 

upload of the job data was going to work. During the October reporting 

time frame, New Jersey officials reported that they generally did not 

experience significant recipient reporting problems. The few reporting 

problems New Jersey experienced occurred in relation to issues uploading 

the data onto Federalreporting.gov and issues requiring clarifying 

guidance from the relevant federal agency. 

Notwithstanding the concerns over the slowness of the reporting system 

and error checks, Iowa officials also reported that the process worked 

rather well, determining that most of their state reporting problems 

seemed to stem from a few recipients not fully grasping all of the training 

the state had provided and thus not knowing or having key information 

like DUNS numbers and in some cases submitting erroneous information. 

The state department of management plans to specifically address the 30 

or so recipients associated with these issues—just about all of which were 

school districts. As a follow-up from this first reporting cycle, several 

states have developed a list of lessons learned to share with OMB and 

other federal agencies. An example in appendix I illustrates problems 

public housing authorities had with both the recipient reporting 

processing functions and the FTE calculation. 

In addition to the Federalreporting.gov Web site, the Recovery Board used 

a revised Recovery.gov Web site to display reported data. The revised site 

includes the ability to search spending data by state, ZIP code, or 

congressional district and display the results on a map. The Recovery 

Board also awarded a separate contract to support its oversight 

responsibilities with the ability to analyze reported data and identify areas 

of concern for further investigation. In addition, the board plans to 

enhance the capabilities of Federalreporting.gov. However, the Recovery 

Board does not yet use an adequate change management process to 

manage system modifications. Without such a process, the planned 

enhancements could become cost and schedule prohibitive. The board has 

recognized this as a significant risk and has begun development of a 

Page 24 GAO-10-223 Recovery Act
 

change management process. Finally, the board has recognized the need 

to improve the efficiency of its help desk operation to avoid dropped calls 

and is working on agreements to address this risk. 

Processes Are in Place at 

the States and Federal 

Agencies for Recipient 

Reporting Data Quality 

Review 

Recipient reporting data quality is a shared responsibility, but often state 

agencies have principal accountability because they are the prime 

recipients. Prime recipients, as owners of the recipient reporting data, 

have the principal responsibility for the quality of the data submitted, and 

subrecipients delegated to report on behalf of prime recipients share in 

this responsibility.19 In addition, federal agencies funding Recovery Act 

projects and activities provide a layer of oversight that augments recipient 

data quality. Oversight authorities including OMB, the Recovery Board, 

and federal agency IGs also have roles to play in ensuring recipient 

reported data quality, while the general public and nongovernmental 

entities can help as well by highlighting data problems for correction. 

State Level Data Quality 

Review 

All of the jurisdictions we reviewed had data quality checks in place for 

the recipient reporting data, either at the state level or a state agency level. 

State agencies, as entities that receive Recovery Act funding as federal 

awards in the form of grants, loans, or cooperative agreements directly 

from the federal government, are often the prime recipients of Recovery 

Act funding. Our work in the 16 states and the District of Columbia 

showed differences in the way states as prime recipients approach 

recipient reporting data quality review. Officials from nine states reported 

having chosen a centralized reporting approach meaning that state 

agencies submit their recipient reports to a state central office, which then 

submits state agency recipient reports to Federalreporting.gov. For 

 

19Prime recipients are nonfederal entities that receive Recovery Act funding as federal 

awards in the form of grants, loans, or cooperative agreements directly from the federal 

government. Subrecipients are nonfederal entities that are awarded Recovery Act funding 

through a legal instrument from the prime recipient to support the performance of any 

portion of the substantive project or program for which the prime recipient received the 

Recovery Act funding. Additionally, the terms and conditions of the federal award are 

carried forward to the subrecipient. 

Page 25 GAO-10-223 Recovery Act
 

example, Colorado’s Department of Transportation provided its recipient 

report to a central entity, the Colorado Office of Information Technology, 

for submission to Federalreporting.gov. States with centralized reporting 

systems maintain that they will be able to provide more oversight of 

recipient reporting with this approach. Advocates of centralized reporting 

also expect that method will increase data quality, decrease omissions and 

duplicate reporting, and facilitate data cleanup. 

Officials from the remaining eight jurisdictions reported using a 

decentralized reporting system. In these cases, the state program office 

administering the funds is the entity submitting the recipient report. In 

Georgia, for example, the State Department of Transportation is 

responsible for both reviewing recipient report data and submitting it to 

Federalreporting.gov. Illinois, as is the case for four other decentralized 

states, is quasidecentralized where the data are centrally reviewed and 

reported in a decentralized manner. When the audit office informs the 

Office of the Governor that its review is complete and if the Office of the 

Governor is satisfied with the results, the Illinois state reporting agency 

may upload agency data to Federalreporting.gov. Appendix I provides 

details on California’s recipient reporting experiences. 

As a centralized reporting state, Iowa officials told us that they developed 

internal controls to help ensure that the data submitted to OMB, other 

federal entities, and the general public, as required by section 1512 of the 

Recovery Act, are accurate. Specifically, Iowa inserted validation 

processes in its Recovery Act database to help reviewers identify and 

correct inaccurate data. In addition, state agency and local officials were 

required to certify their review and approval of their agency’s information 

prior to submission. Iowa state officials told us that they are working on 

data quality plans to include being able to reconcile financial information 

with the state’s centralized accounting system. According to Iowa officials, 

the number of Recovery Act grant awards improperly submitted was 

relatively small. 

As a decentralized reporting state, New Jersey officials reported that a 

tiered approach to data quality checks was used for all Recovery Act 

funding streams managed by the state. Each New Jersey state department 

or entity was responsible for formulating a strategy for data quality 

reviews and implementing that strategy. The New Jersey Department of 

Community Affairs, for example, directed subrecipients to report data 

directly into an existing departmental data collection tool modified to 

encompass all of the data points required by the Recovery Act. This 

system gave the Department of Community Affairs the ability to view the 

Page 26 GAO-10-223 Recovery Act
 

data as it came in from each subrecipient. From this data collection tool, 

the department uploaded prime and subrecipient data to 

Federalreporting.gov. All departmental strategies were reviewed by the 

New Jersey Governor’s office and the New Jersey Recovery Accountability 

Task Force. The Governor’s office conducted a review of the reports as 

they were uploaded to Federalreporting.gov on a program-by-program, 

department-by-department basis to identify any outliers, material 

omissions, or reporting errors that could have been overlooked by 

departments. 

To help ensure the quality of recipient report data, the Recovery Board 

encouraged each federal Office of Inspector General overseeing an agency 

receiving Recovery Act funds to participate in a governmentwide Recovery 

Act Reporting Data Quality Review. The Recovery Board requested the IG 

community to determine the following: (1) the existence of documentation 

on the agencies’ processes and procedures to perform limited data quality 

reviews targeted at identifying material omissions and significant reporting 

errors, (2) the agencies’ plans for ensuring prime recipients report 

quarterly, and (3) how the agencies intend to notify the recipient of the 

need to make appropriate and timely changes. In addition, IGs reviewed 

whether the agency had an adequate process in place to remediate 

systemic or chronic reporting problems and if they planned to use the 

reported information as a performance management and assessment tool. 

We reviewed the 15 IG reports that were available as of November 12, 

2009. Our review of these reports from a range of federal agencies found 

that they had drafted plans or preliminary objectives for their plans for 

data quality procedures. 

Federal Agency Data Quality 

Review 

Published IG audits on agencies’ Recovery Act data quality reviews that 

we examined indicated that federal agencies were using a variety of data 

quality checks, which included automated or manual data quality checks 

or a combination. Computer programs drive the automated processes by 

capturing records that do not align with particular indicators determined 

by the agency. Agencies may use a manual process where a designated 

office will investigate outliers that surface during the automated test. For 

example, the automated process for Education performs data checks to 

validate selected elements against data in the department’s financial 

systems. As part of its data quality review, Education officials are to 

examine submitted reports against specific grant programs or contract 

criteria to identify outliers for particular data elements. Of the IG reports 

that we reviewed that mentioned systemic or chronic problems, 9 of the 11 

found that their agencies had a process in place to address these 

problems. Although some of the IGs were unable to test the 

Page 27 GAO-10-223 Recovery Act
 

implementation of their agency’s procedures for reviewing the quarterly 

recipient reports, based on their initial audit, they were able to conclude 

that the draft plan or preliminary objectives for data quality review were in 

place. 

According to OMB’s guidance documents, federal agencies must work 

with their recipients to ensure comprehensive and accurate recipient 

reporting data. A September 11, 2009, memorandum from OMB directed 

federal agencies to identify Recovery Act award recipients for each 

Recovery Act program they administer and conduct outreach actions to 

raise awareness of registration requirements, identify actual and potential 

barriers to timely registration and reporting, and provide programmatic 

knowledge and expertise that the recipient may need to register and enter 

data into Federalreporting.gov. Federal agencies were also expected to 

provide resources to assist state and select local governments in meeting 

reporting requirements required by the Recovery Act. In addition, federal 

agencies were to identify key mitigation steps to take to minimize delays in 

recipient registration and reporting. 

OMB also requires that federal agencies perform limited data quality 

reviews of recipient data to identify material omissions and significant 

reporting errors and notify the recipients of the need to make appropriate 

and timely changes to erroneous reports. Federal agencies are also to 

coordinate how to apply the definitions of material omissions and 

significant reporting errors in given program areas or across programs in a 

given agency to ensure consistency in the manner in which data quality 

reviews are carried out. Although prime recipients and federal agency 

reviewers are required to perform data quality checks, none are required 

to certify or approve data for publication. However, as part of their data 

quality review, federal agencies must classify the submitted data as not 

reviewed by the agency; reviewed by the agency with no material 

omissions or significant reporting errors identified; or reviewed by the 

agency with material omissions or significant reporting errors identified. If 

an agency fails to choose one of the aforementioned categories, the system 

will default to not reviewed by the agency. 

The prime recipient report records we analyzed included data on whether 

the prime recipient and the agency reviewed the record in the OMB data 

quality review time frames. In addition, the report record data included a 

flag as to whether a correction was initiated. A correction could be 

initiated by either the prime recipient or the reviewing agency. Table 6 

shows the number and percentage of prime recipient records that were 

marked as having been reviewed by either or both parties and whether a 

Page 28 GAO-10-223 Recovery Act
 

correction was initiated. OMB’s guidance provided that, a federal agency, 

depending on the review approach and methodology, could classify data 

as being reviewed by the agency even if a separate and unique review of 

each submitted record had not occurred. 

Table 6: Prime Recipient Reports Reviews and Corrections 

Reviewed 

by agency 

Reviewed 

by prime recipient Correction 

Number of prime 

recipient reports Percentage

No No No 2,959 5

No No Yes 8,201 14

No Yes Yes 1 1<

Yes No No 37,911 67

Yes No Yes 7,900 14

Yes Yes No 13 1<

Yes Yes Yes 1 1<

Total 56,986 100%

Source: GAO analysis of Recovery.gov data. 

As shown in table 6, more than three quarters of the prime recipient 

reports were marked as having undergone agency review. Less than one 

percent was marked as having undergone review by the prime recipient. 

The small percentage reviewed by the prime recipients themselves during 

the OMB review time frame warrants further examination. While it may be 

the case that the recipients’ data quality review efforts prior to initial 

submission of their reports precluded further revision during the review 

time frame, it may also be indicative of problems with the process of 

noting and recording when and how the prime recipient reviews occur and 

the setting of the review flag. Overall, slightly more than a quarter of the 

reports were marked as having undergone a correction during the OMB 

review time frames. 

Page 29 GAO-10-223 Recovery Act
 

The Federal-Aid Highway Program provided a good case study of federal 

agency data quality reviews because the responsible federal agency, 

FHWA, had previous experience estimating and reporting on the 

employment effects of investment in highway construction. As a result, 

FHWA would seem to be better positioned than some other federal 

agencies to fulfill the job creation or retention reporting requirements 

under the Recovery Act and may have data quality review processes that 

other federal agencies could replicate. We met with officials and reviewed 

available documentation including federal highway reporting documents 

and payroll records at the selected state departments of transportation and 

selected vendors. Overall, we found that the state departments of 

transportation as prime recipients had in place plans and procedures to 

review and ensure data quality. We followed up with the state departments 

of transportation to confirm that these procedures were followed for 

highway projects representing at least 50 percent of the Recovery Act 

highway reimbursements as of September 4, 2009 in the 17 jurisdictions 

where we are conducting bimonthly reviews and reviewed available 

documentation.20 Appendix I illustrates recipient reporting processes and 

data quality checks at the Florida Department of Transportation. 

Highway and Education 

Projects Illustrate State 

and Federal Agency Joint 

Responsibility for Data 

Quality 

Highway Projects 

In addition to the section 1512 reporting requirements, recipients of 

certain transportation Recovery Act funds, such as state departments of 

transportation, are subject to the reporting requirements outlined in 

section 1201(c) of the Recovery Act. Under section 1201(c), recipients of 

transportation funds must submit periodic reports on the amount of 

federal funds appropriated, allocated, obligated, and reimbursed; the 

number of projects put out to bid, awarded, or work has begun or 

completed; and the number of direct and indirect jobs created or 

 

20The Federal-Aid Highway Program is not a “cash up-front” program. No cash is actually 

disbursed until states incur costs. Projects are approved and work is started, then the 

federal government makes payments—also called reimbursements—to the states for costs 

as they are incurred on projects. The amount of cash paid to the states reflects only the 

federal share of the project’s cost. 

Page 30 GAO-10-223 Recovery Act
 

sustained, among other things.21 The Recovery Act section 1201(c) 

requirement called for project level data to be reported twice before the 

first Recovery Act section 1512 report was due.22 DOT is required to 

collect and compile this information for Congress, and it issued its first 

report to Congress in May 2009. Consequently, DOT and its modal 

administrations, such as FHWA, and state departments of transportation 

gained experience collecting and reporting job creation and retention 

information before the first Recovery Act section 1512 report was du

October 2009 and required FHWA to have its data collection and review 

process in place in advance of October 1, 2009, the start of the secti

e in 

on 

1512 reporting. 

his 

tem 

e 

A to 

ipient is 

found to be in noncompliance with the reporting requirements. 

 

To help fulfill these reporting requirements, FHWA implemented a 

reporting structure that ties together the federal and state levels of 

reporting, creating both a chain of evidence and redundancy in the review 

of the reported data. Figure 4 shows the reporting structure. As part of t

reporting structure, FHWA also created the Recovery Act Data Sys

(RADS), with the updated version of the system released in early 

September 2009. RADS is primarily designed as a repository of data for 

states, but it also serves as an important oversight tool for FHWA becaus

it links federal financial data to project data reported by the states. The 

system helps ensure consistent definitions of fields and enables FHW

auto-populate identification fields, including DUNS numbers, award 

numbers, and total award amounts, to both reduce the burden at the 

project level and to reduce the data entry errors. In addition, monthly 

reporting requirements include payroll records, hours worked, and data

quality assurances, in individual contracts for highway projects funded 

with Recovery Act funds. FHWA may withhold payments if a rec

21The first periodic report was due no later than 90 days after the date of enactment of the 

act, with updated reports due no later than 180 days, 1 year, 2 years, and 3 years after 

enactment. 

22Section 1201(c) requires recipients of Recovery Act funds under certain federal 

transportation programs, including Federal-Aid Surface Transportation Program to make 

periodic reports. Among other information, these reports are to include the number of 

direct, on-project jobs created or sustained by federal funds, and, to the extent possible the 

estimated indirect jobs created or sustained in the associated supplying industries, 

including the number of job-years created and the total increase in employment since the 

enactment of the Recovery Act. 

Page 31 GAO-10-223 Recovery Act
 

Figure 4: FHWA’s Recipient Reporting Data Structure 

Source: GAO.

Project information from awardees (subrecipients of federal awards) to appropriate state DOTs

Data due

Oct 30

Recovery.gov

States with centralized 

reporting:

AZ, CA, CO, FL, IA, MA, 

MI, OH, PA

States and district with 

decentralized reporting:a

DC, GA, IL, MS, NC, NJ, 

NY, TX

State offices

of economic

recovery

Centralized Decentralized

return to 

address 

discrepancies

federal agency

review

1

2

3

1 2 3 1 2 3 Initial

State reviewed

Data submissions

Federal reviewed

U.S. Department

of Transportation

FederalReporting.gov

return to 

address 

discrepancies

a

Four states, Georgia, Illinois, New York, and North Carolina, plus the District of Columbia, review 

data centrally but report in a decentralized manner. 

To meet the reporting requirements of the Recovery Act, FHWA required 

that prime contractors of transportation projects funded with Recovery 

Page 32 GAO-10-223 Recovery Act
 

Act dollars report project level activity on a monthly basis to the state 

departments of transportation. Specifically, prime contractors are required 

to submit the total number of people working on the project, the total 

number of hours worked on the project, and the total payroll on the 

project for each month. These reports are to include this information for 

both the prime contractors and subcontractors. FHWA also requires that 

prime contractors provide documentation to verify the hours funded 

through the Recovery Act, a higher standard than the OMB guidance 

requires for section 1512 reporting purposes. FHWA’s monthly reporting 

requirement is included in individual contracts for each highway project 

funded with Recovery Act dollars. Prior to the Recovery Act, FHWA 

required contractors to maintain similar information and make it available 

for inspection. However, while discussing project level activity with 

transportation contractors and officials across the 17 jurisdictions, we 

found that many had been reporting this information to state departments 

of transportation on a monthly basis. 

tors for 

lp 

x I details 

g examples for contractors in Georgia and 

formation states 

ts 

ork 

of transportation or central office to make 

Within our 17 jurisdictions, we had discussions with prime contractors 

from 36 highway projects funded by Recovery Act dollars. In several cases, 

these prime contractors were also prime contractors or subcontrac

other Recovery Act funded projects. Activities conducted by these 

contractors included projects such as highway repaving, interstate 

resurfacing, and bridge replacement. To meet the reporting requirements, 

a number of prime contractors we visited developed data systems to 

collect required project information from the subcontractors. In some

cases, we also found that prime contractors reinforced the reporting

requirements by including the requirements in their contracts with 

subcontractors, providing contractors with the necessary leverage to he

ensure complianc

recipient reportin

Massachusetts. 

e with the reporting requirements. Appendi

FHWA has taken several steps to help ensure the reliability of the 

information contained in RADS. First, FHWA compared in

recorded in RADS to the information states submitted to 

Federalreporting.gov to identify inconsistencies or discrepancies. Second, 

as part of an ongoing data reliability process, FHWA monitors select fields 

in RADS, such as number of projects, types of projects, and where projec

are located, and performs data validation and reasonableness tests. For 

example, it checks if a rate of payment in dollars per hour is too high or 

too low. When potential issues are identified, FHWA division offices w

with the state department 

necessary changes. 

Page 33 GAO-10-223 Recovery Act
 

For this round of recipient reporting, FHWA used an automated process to 

review all of the reports filed by recipients. These automated reviews 

included various data validation and reasonableness checks. For example, 

FHWA checked whether the range of FTEs reported were within its own 

economic estimates. For any reports that were out of range, FHWA would 

comment on these reports. As described earlier, only recipients could 

make changes to the data. In making a comment, FHWA let the recipient 

know there was potential concern with the record. The recipient then had 

the opportunity to either change or explain the comment raised by FHWA. 

According to FHWA officials, they reviewed 100 percent of more than 

7,000 reports submitted by recipients of Recovery Act highway funds and 

found that the final submissions were generally consistent with 

department data. Although there were problems of inconsistent 

interpretation of the guidance, the reporting process went well for 

highway projects. 

Education has engaged in numerous efforts to facilitate jobs reporting by 

states23 and local educational agencies (LEA). States and LEAs have also 

taken action to collect and report jobs data and to ensure data quality. 

Despite these efforts, state and local officials we spoke with raised some 

concerns about the quality of jobs data reported in October 2009, such as 

insufficient time to incorporate updated guidance on estimating job 

counts. To address these concerns, Education and many state officials we 

interviewed said they plan to take steps to improve the reporting and data 

quality processes before the next reports are due in January 2010. Our 

review focused on the State Fiscal Stabilization Fund, as well as Recovery 

Act grants made for the Elementary and Secondary Education Act of 1965, 

Title I, Part A and for the Individuals with Disabilities Education Act, Part 

B. To collect this information, we interviewed Education officials and 

officials in 10 states—Arizona, California, Colorado, Florida, Georgia, 

Illinois, Massachusetts, New Jersey, New York, and North Carolina—the 

District of Columbia, and 12 LEAs, including a mix of LEAs in urban and 

rural areas. States were selected from the 16 states and the District of 

Columbia in which we conduct bi-monthly reviews of the use of Recovery 

Act funds as mandated by the Recovery Act. We also reviewed federal and 

state guidance and other documentation. 

Education Projects 

 

23State reporting agencies involved in jobs reporting under section 1512 of the Recovery Act 

may include governor’s offices, recovery agencies, state educational agencies or other state 

offices, depending on whether the state is using a centralized reporting approach or 

decentralized reporting approach. 

Page 34 GAO-10-223 Recovery Act
 

Education’s efforts to facilitate jobs reporting by states and LEAs include 

coordinating with OMB, providing guidance and technical assistance to 

states and LEAs, and reviewing the quality of the jobs data reported. 

Education has coordinated its efforts regarding recipient reporting with 

OMB in a number of ways, including participating in cross-agency 

workgroups and clearing its guidance materials with OMB prior to 

disseminating them. On August 10, 2009, Education hosted a web-based 

technical assistance conference on reporting requirements that included 

information on OMB’s guidance on estimating and reporting jobs data. On 

September 11, the department issued guidance specifically related to 

estimating and reporting jobs created or retained by states and LEAs 

receiving Recovery Act grants.24 Education updated its jobs guidance and 

hosted another web-based technical assistance conference on September 

21, providing detailed instructions to states and LEAs on a range of topics, 

such as how to estimate the number of hours created or retained for a 

teacher who works less than 12 months in a year. In addition, according to 

Education officials, the department developed and implemented a draft 

plan to review the jobs data that states and LEAs reported to 

Federalreporting.gov in October. This plan addresses the roles and 

responsibilities of several Education offices to assist with the data quality 

review throughout the 30-day reporting timeline (for example, Oct. 1 

through Oct. 30, 2009).25 According to the plan, these responsibilities 

include continuous evaluation of recipient and subrecipient efforts to meet 

reporting requirements, as well as providing limited data quality reviews 

and notifying the recipient of the need to make appropriate and timely 

corrections. The plan says that reviewers are to conduct two types of data 

quality checks – an automated and a manual review. The automated 

review will validate various data elements for financial assistance against 

its grant management system, such as prime award numbers, recipient 

DUNS numbers, and amounts of awards. The manual review will identify 

outliers in certain data elements, such as whether the reported number of 

jobs created is reasonable. According to Education officials, upon their 

 

24See U.S. Department of Education, Clarifying Guidance on American Recovery and 

Reinvestment Act of 2009: Reporting on Jobs Creation Estimates by Recipients 

(Washington, D.C., September 2009). 

25The plan delineates specific roles and responsibilities for the Office of the Deputy 

Secretary; the Office of the Chief Information Officer; the Office of the Chief Financial 

Officer, Financial Management Operations; the Office of the Chief Financial Officer, 

Contracts and Acquisition Management; Office of the Chief Financial Officer, Financial 

Systems Services; the Office of the Secretary, Risk Management Services Management 

Improvement Team; and various program offices. 

Page 35 GAO-10-223 Recovery Act
 

initial review of recipient reported data, the most common errors were 

relatively small—such as mistyped award numbers or incorrect award 

amounts—and were easily addressed and corrected during the agency 

review period. Department officials told us that they provided technical 

assistance to states and were able to have states correct the errors such 

that almost all of them were corrected before the October 30 deadline. 

Furthermore, state officials generally provided positive feedback to the 

department for these efforts, according to Education officials. Education’s 

Office of Inspector General (OIG) examined Education’s process for 

reviewing the quality of recipient reported data and found that Education’s 

data review process was generally adequate.26 The OIG’s review 

determined that Education has established a process to perform limited 

data quality reviews intended to identify problems, such as questionable 

expenditure patterns or job estimates. OIG also acknowledged that 

Education developed a process to correct any issues that Education 

officials find by contacting the recipients who submitted the report. In 

addition, OIG noted that the department plans to review quarterly data at a 

state level to determine whether there are systemic problems with 

individual recipients and that Education plans to use the reported 

information as a management tool. 

State educational agencies (SEA) also have taken action to collect and 

report jobs data and to ensure data quality.27 State officials in Arizona, 

Massachusetts, New Jersey, and New York and officials in the District of 

Columbia told us that they adapted their existing data systems or created 

new ones to track and report jobs data. For example, Massachusetts 

Department of Education officials created an online quarterly reporting 

web site to collect jobs data from its LEAs and detailed information on 

personnel funded by Recovery Act grants. In addition, many SEA and LEA 

officials we spoke with reported taking steps to ensure data quality, such 

as pre-populating data fields (that is, inserting data, such as DUNS 

numbers, into the recipient reporting template for the LEAs), checking the 

 

26For more information on the Inspector General findings, see U.S. Department of 

Education. Office of Inspector General, The Department’s Process to Ensure Data Quality 

Under the Reporting Requirements of the American Recovery and Reinvestment Act of 

2009, Final Audit Report No. ED-OIG/A19J0004. Oct. 29, 2009. 

27According to federal Recovery Act guidance, LEA officials are primarily responsible for 

developing job estimates and states—as prime recipients of the Recovery Act SFSF, 

Elementary and Secondary Education Act Title I, and Individuals with Disabilities 

Education Act grants—are responsible to report those data to Federalreporting.gov. Both 

states and LEAs are responsible for ensuring that the reported data are accurate. 

Page 36 GAO-10-223 Recovery Act
 

reasonableness of data entered, and looking for missing data. In addition 

to tracking and reporting jobs data and taking steps to ensure data quality, 

SEA officials reported providing technical assistance, such as written 

guidance and Web-based seminars, that explain how LEAs should report 

job estimates. For example, California state officials had LEAs submit 

their data through a new web-based data reporting system and, prior to 

implementing the new system, provided written guidance and offered a 

web-based seminar to its LEAs. 

Despite efforts to ensure data quality, state and local officials we spoke 

with raised some concerns about the quality of jobs data reported in 

October 2009. For example, LEAs were generally required28 to calculate a 

baseline number of hours worked, which is a hypothetical number of 

hours that would have been worked in the absence of Recovery Act funds. 

LEA officials were to use this baseline number to determine the number of 

hours created or retained and to subsequently derive the number of FTEs 

for job estimates. Each LEA was responsible for deriving its own estimate. 

New Jersey state officials we interviewed told us that it was likely that 

LEAs used different methods to develop their baseline numbers, and as a 

result, LEAs in the same state may be calculating FTEs differently. (See 

appendix II for a complete description of the calculations used to 

determine baseline number of hours worked, number of hours created or 

retained, and FTEs for jobs created or retained). According to Illinois state 

officials, some of their LEAs had double-counted the number of positions, 

attributing the positions to both state fiscal year 2009 (which ended on 

June 30, 2009) and fiscal year 2010 (beginning July 1, 2009), in part 

because the reporting period covered both of the state’s fiscal years. Also, 

according to Illinois officials, other school districts estimated that zero 

positions were attributable to the Recovery Act. In those cases, LEA 

officials received Recovery Act funds before finalizing staff lay-offs. Since 

they had not officially laid off any staff, Illinois officials told us that LEA 

officials were unsure as to whether those jobs would count as “jobs saved” 

and believed it best to report that no jobs had been saved because of 

Recovery Act funding. Illinois officials told us that Education reviewed 

Illinois’ data, but did not ask them to make any corrections, but instead 

asked the state to disaggregate the job estimates by type of position, such 

as teachers and administrators. Also, one LEA official from New York 

 

28There are some exceptions to this requirement. For example, in limited circumstances 

and with approval from Education, recipients may use an Education-approved statistical 

methodology to generate jobs estimates. 

Page 37 GAO-10-223 Recovery Act
 

reported that he did not have enough time to conduct the necessary data 

quality checks he wanted to perform. Education officials acknowledged 

that many state and local officials reported various challenges in 

understanding the instructions and methodology that Education suggested 

they use to calculate job estimates.29 According to Education officials, 

when states contacted the department to report these problems, 

Education officials provided technical assistance to resolve the state’s 

specific issues. 

States faced challenges due to the timing of guidance or changes in 

guidance on how to estimate jobs attributable to the Recovery Act, 

according to Education officials and several state officials we interviewed. 

For example, Colorado officials reported that, based on June 22, 2009 

guidance from OMB, they believed that subrecipient vendors’ jobs would 

be considered “indirect jobs” and therefore LEAs would not have to 

provide estimates of their vendors’ jobs in their reports. Colorado officials 

told us they received guidance at Education’s August technical assistance 

conference indicating that subrecipients (in this case, LEAs) are supposed 

to include vendor job estimates based on those jobs directly funded by 

Recovery Act grants. However, Education’s guidance did not clearly 

distinguish between direct and in-direct vendor jobs, according to state 

officials, making it difficult for LEAs to determine which vendor jobs to 

include in their section 1512 reports. State officials also reported receiving 

further guidance on estimating jobs from Education on September 15 and 

attending a related technical assistance conference on September 21. On 

September 16, the Colorado SEA issued guidance stating that LEAs would 

be responsible for including vendor jobs in the job estimates they would 

be reporting. (Colorado’s LEA reports were due to the SEA on September 

25, because the SEA was required to submit its data to the state 

controller’s office on September 29 for centralized reporting.) Also, 

officials in California—where LEAs had to report to the SEA on September 

23—said they were not notified until Education’s September 21 conference 

that all LEAs that received Recovery Act funds had to register in the 

Central Contractor Registration. They told us that this contradicted 

previous guidance from Education and would have required LEAs to 

 

29In addition, Education officials told us they found a problem with some states’ reports of 

jobs attributable to the SFSF. According to Education, in a small number of states, state 

officials had not finalized layoff plans prior to the Recovery Act’s enactment and therefore 

they could not be certain about the number of jobs they would have lost in the absence of 

Recovery Act funding. Thus, job estimates from these states may need to be adjusted in the 

January 2010 report, and Education intends to provide guidance to address this issue. 

Page 38 GAO-10-223 Recovery Act
 

register within 2 days to meet their state’s September 23 deadline. 

California officials advised federal officials that the state would implement 

this requirement for the second quarterly reporting period. 

Education officials and officials in two states mentioned actions that might 

improve the reporting and data quality processes before the next reports 

are due in January 2010. Education officials suggested a number of 

possible changes in Federalreporting.gov, such as allowing Education to 

pre-populate some basic state data, such as grant award numbers and 

amounts, would decrease the workload for states and help avoid some 

technical errors. Also, in response to problems such as LEAs counting jobs 

in two fiscal years, Education plans to provide more guidance in early 

December 2009 to states on calculating job estimates. At the state level, 

officials in Georgia reported plans to make changes to the state’s 

processes, such as adding internal edit checks so that those who enter the 

data will have to make corrections as part of the data entry process. Also, 

Illinois has created an office to work with state agencies to improve their 

data reporting processes, according to a state official. The state also plans 

to build in more checks to its review of agency data, for example, a check 

that would compare jobs data against existing employment data to confirm 

that districts are not reporting more positions than exist in the district. 

GAO Will Continue to 

Follow These Issues and 

Highlight Concerns in 

Subsequent Reports 

As recipient reporting moves forward, we will continue to review the 

processes that federal agencies and recipients have in place to ensure the 

completeness and accuracy of data, including reviewing a sample of 

recipient reports across various Recovery Act programs to assure the 

quality of the reported information. As existing recipients become more 

familiar with the reporting system and requirements, these issues may 

become less significant; however, communication and training efforts will 

need to be maintained and in some cases expanded as new recipients of 

Recovery Act funding enter the system. In addition to our oversight 

responsibilities specified in the Recovery Act, we are also reviewing how 

several federal agencies collect information and provide it to the public for 

selected Recovery Act programs, including any issues with the 

information’s usefulness. Our subsequent reports will also discuss actions 

taken on the recommendations in this report and will provide additional 

recommendations, as appropriate. 

Page 39 GAO-10-223 Recovery Act
 

We are making two recommendations to the Director of OMB. To improve 

the consistency of FTE data collected and reported, OMB should continue 

to work with federal agencies to increase recipient understanding of the 

reporting requirements and application of the guidance. Specifically, OMB 

should 

• clarify the definition and standardize the period of measurement for 

FTEs and work with federal agencies to align this guidance with 

OMB’s guidance and across agencies, 

• given its reporting approach consider being more explicit that “jobs 

created or retained” are to be reported as hours worked and paid for 

with Recovery Act funds, and 

• continue working with federal agencies and encourage them to 

provide or improve program specific guidance to assist recipients, 

especially as it applies to the full-time equivalent calculation for 

individual programs. 

OMB should work with the Recovery Board and federal agencies to 

reexamine review and quality assurance processes, procedures, and 

requirements in light of experiences and identified issues with this round 

of recipient reporting and consider whether additional modifications need 

to be made and if additional guidance is warranted. 

The jobs data reported by recipients of Recovery Act funds provide 

potentially useful information about a portion of the employment effect of 

the act. At this point, due to issues in reporting and data quality including 

uncertainty created by varying interpretations of the guidance on FTEs, 

we cannot draw a conclusion about the validity of the data reported as a 

measure of the direct employment effect of spending covered by the 

recipient reports. Even after data quality issues are addressed, these data 

will represent only a portion of the employment effect. Beyond the jobs 

that are reported, further rounds of indirect and induced employment 

gains result from government spending. The Recovery Act also includes 

entitlement spending and tax benefits, which themselves create 

employment. Therefore, both the data reported by recipients and other 

macroeconomic data and methods are necessary to understand the overall 

employment effects of the stimulus. 

Recommendations for 

Executive Action 

Despite Limitations, 

Economic Methods 

and Recipient Reports 

Together Can Provide 

Insight into the 

Employment Effects 

of Fiscal Stimulus 

Economists will use statistical models to estimate a range of potential 

effects of the stimulus program on the economy. In general, the estimates 

are based on assumptions about the behavior of consumers, business 

owners, workers, and state and local governments. Against the 

Page 40 GAO-10-223 Recovery Act
 

background of these assumptions, themselves based on prior research, the 

effects of different policies can be estimated. Any such estimate is 

implicitly a comparison between alternative policies. The reliability of any 

alternative scenario that is constructed depends on its underlying 

assumptions and the adequacy of evidence in support of those 

assumptions, as well as on the accuracy of the data that form the basis for 

what is observed and on how well the model reflects actual behavior. 

In the broadest terms, economic research using macroeconomic models 

suggests general rules of thumb for approximating the job impact and the 

GDP increase for a given amount of stimulus spending. In constructing 

their estimates of the employment impacts of the act, CEA observed that a 

one percent increase in GDP has in the past been associated with an 

increase in employment of approximately 1 million jobs, about three 

quarters of 1 percent of national employment. Similarly, CBO economists 

have assumed that a one percent increase in output generates somewhere 

between 600,000 and 1.5 million jobs. As a result, projections of the 

employment impact of the Recovery Act can be generated from 

macroeconomic models that estimate output, providing the basis for 

estimates of changes in employment. 

CEA estimates of the employment effects of the Recovery Act have been 

based on statistical projections and allocations using historical 

relationships. In January 2009, the incoming administration projected the 

anticipated effects of fiscal stimulus on output and employment in the 

economy, specifying a prototypical spending package of tax cuts, 

payments to individuals, and direct spending by federal and state 

government. The effects of such additional spending on output (GDP) 

were projected using multipliers, values based on historical experience 

that estimate the output change per unit of different types of changes in 

government spending. These output increases were translated into 

employment effects using a rule of thumb, again based on history, that a 1 

percent rise in GDP yields 1 million jobs. 

The incoming administration’s January 2009 analysis of a prototypical 

stimulus package found that it would be expected to increase GDP by 3.7 

percent and increase jobs by 3,675,000 by the fourth quarter of 2010. The 

analysis compared the unemployment rate with and without the stimulus. 

At that time, the unemployment rate for 2009 was projected to be 8 

percent with a stimulus and closer to 9 percent without. In May 2009, CEA 

reported on the anticipated employment effects of the actual Recovery Act 

as passed by Congress and signed into law by the President. That analysis 

was consistent with the January projections that the Recovery Act (which 

Page 41 GAO-10-223 Recovery Act
 

was deemed to closely resemble the prototypical package earlier 

assumed) would result in approximately 3.5 million jobs saved or created 

by the end of 2010, compared to the situation expected to exist in the 

absence of the act. Later, when the actual unemployment rate rose beyond 

9 percent, the administration acknowledged that its earlier projections of 

unemployment were too low but asserted that, without the Recovery Act, 

the rate would have been even higher than observed. 

In September 2009 CEA reported on the effects of Recovery Act spending 

through the end of August. It noted that statistical analysis of actual 

economic performance compared to that which might have been expected 

in the absence of the Recovery Act suggested that the Recovery Act had 

added “roughly” 2.3 percentage points to GDP in the second quarter and 

was likely to add even more in the third. Translating that output gain into 

employment, CEA surmised that employment in August was 1 million jobs 

higher than it would have been without the act. 

The recipient reports are not estimates of the impact of the Recovery Act, 

although they do provide a real-time window on the results of Recovery 

Act spending. Recipients are expected to report accurately on their use of 

funds; what they are less able to say is what they would have done without 

the benefit of the program. For any disbursement of federal funds, 

recipients are asked to report on the use of funds to make purchases from 

business and to hire workers. These firms and workers spend money to 

which they would not otherwise have had access. Recipients could not be 

expected to report on the expansionary effects of their use of funds, which 

could easily be felt beyond local, state, or even national boundaries. 

Neither the recipients nor analysts can identify with certainty the impact 

of the Recovery Act because of the inability to compare the observed 

outcome with the unobserved, counterfactual scenario (in which the 

stimulus does not take place). At the level of the national economy, 

models can be used to simulate the counterfactual, as CEA and others 

have done. At smaller scales, comparable models of economic behavior 

either do not exist or cover only a very small portion of all the activity in 

the macroeconomy. 

The effect of stimulus on employment depends on the behavior of the 

recipient of aid. For consumers, it depends on the extent to which their 

total spending increases. For business firms, it depends on the increase, if 

any, in their purchases from other business firms or their payrolls. For 

state and local governments, it is the increase in their purchases of goods 

and services and their own employment rolls. Within any given group of 

recipients, choices to spend or save will vary. For example, a consumer 

Page 42 GAO-10-223 Recovery Act
 

with a large credit card balance may use a tax cut to pay down the balance 

or save more rather than increasing spending. Given that the personal 

savings rate fell to essentially zero before the recession, households may 

well choose to rebuild savings rather than spend. A business firm might 

not see additional capital spending or hiring as advantageous. A state 

government might decide to bolster its reserves where permitted under 

law rather than increase its outlays or cut its taxes. In each case, the 

strength of the program as immediate stimulus is weakened to the extent 

that all funds are not spent. 

The extent to which the initial spending reverberates throughout the 

economy is summarized by a multiplier, a measure of the cumulative 

impact on GDP over time of a particular type of spending or tax cut. The 

resulting change in output translates into a change in employment. In the 

context of the Recovery Act recipient reports, the output and employment 

effects will likely vary with the severity of the economic downturn in a 

recipient’s location (as reflected by distress in labor markets and the fiscal 

positions of governments), and the amount of funds received by the 

recipient. The nature of the projects or activities to which the recipient 

applies its funds also matters, whether the projects use labor intensively 

and whether those who are hired will themselves spend or save their 

earnings. 

Potential Effect of 

Different Types of Fiscal 

Stimulus 

Economists use computer models of the U.S. economy with historical data 

on employment, GDP, public spending, taxes, and many other factors to 

study the effects of monetary (e.g., changes in interest rates) and fiscal 

policies (e.g., changes in government taxing and spending) designed to 

affect the trajectory of the economy. In general, a fiscal stimulus program 

like the Recovery Act is aimed at raising aggregate demand – the spending 

of consumers, business firms, and governments. This may be 

accomplished by means of tax cuts, grants-in-aid, or direct Federal 

spending. In response, the recipients may purchase more goods and 

services than they would have otherwise. This could lead to governments 

and business firms refraining from planned dismissal of employees or to 

hiring additional workers. The stimulus may lead to an overall, net 

increase in national employment and economic output. Models of the 

nation’s economy can provide estimates of changes in GDP and 

employment that result from changes in monetary or fiscal policies. 

In assessing the effects of fiscal policies such as additional government 

spending or tax cuts on GDP, macroeconomic models can be used to 

estimate “multipliers,” which represent the cumulative impact on GDP 

over time of a particular type of spending or tax cut. Multipliers translate 

Page 43 GAO-10-223 Recovery Act
 

the consequences of a change in one variable, such as in the demand for 

goods and services brought about by economic stimulus, on other 

variables, such as the supply of those goods and services and employment, 

taking into account “ripple effects” that occur throughout the economy. 

The size of the multiplier depends on the extent to which changes in 

additional government spending or revenue translates into changes in 

spending by recipients and beneficiaries of the additional spending. 

Spending increases the multiplier, and saving reduces it. The multiplier is 

also larger when there is slack in the economy (unemployed persons and 

idle productive capacity). Also, the expansionary effects of government 

spending are greater when stimulus funds are borrowed rather than raised 

by taxation. Finally, the multiplier effect in the U.S. will be greater to the 

extent that new spending, whether by government or individuals, is 

devoted to domestically-produced goods and services. 

In general, macroeconomic models and estimated multipliers can provide 

insights on the potential effect of different types of public spending. 

Because of the limited historical experience with fiscal stimulus of the 

magnitude of the Recovery Act, there is uncertainty about the extent to 

which the multipliers estimated using historical data about the effect of 

previous business cycles will accurately reflect the stimulus effect this 

time around. Economic research, however, has developed a basis for 

constructing reasonable ranges of values. In projecting the anticipated 

effect of the Recovery Act on national output, the CBO grouped the act’s 

provisions according to the size of the multiplier—that is, the magnitude of 

the effect of a particular provision’s spending on GDP (see table 7). 

Drawing on analyses based on past experience with the results of 

government spending, CBO has identified a range of 1.0 to 2.5 for 

multipliers. For example, a multiplier of 1.0 means a dollar of stimulus 

financed by borrowing results in an additional dollar of GDP. CBO 

assumes larger multipliers for grants to state and local governments for 

infrastructure spending, and lower values—0.7 to 1.9—for transfers not 

related to infrastructure investment.30 Figure 5 shows the distribution of 

Recovery Act funds by multiplier. 

 

30Letter from Douglas Elmendorf (Director, Congressional Budget Office) to Senator 

Charles Grassley on the macroeconomic effects of ARRA, March 2, 2009. 

Page 44 GAO-10-223 Recovery Act
 

Table 7: Estimated Multipliers for Recovery Act Spending and Tax Expenditures 

Estimated 

policy multiplier 

Category High Low

Purchases of goods and services by federal government 2.5 1

Transfers to state and local governments for infrastructure 2.5 1

Transfers to state and local governments for other than 

infrastructure 1.9 0.7

Transfers to persons 2.2 0.8

One-time payments to retirees 1.2 0.2

2-year tax cuts for lower- and middle-income people 1.7 0.5

1-year tax cuts for higher income people 0.5 0.1

Extension of first-time homebuyer credit 1.0 0.2

Tax provisions for businesses primarily affecting cash flow 0.4 0

Source: CBO. 

Page 45 GAO-10-223 Recovery Act
 

Figure 5: Composition of Recovery Act Outlays by Jobs Multiplier Category 

Source: CBO.

Spending

Payments to individuals

Tax relief

Other

Share of 

Recovery Act by 

policy multiplier 

categories

1%

3%

9%

21%

2%

13%

27%

11%

6%

7%

Transfers to states and 

localities for infrastructure

Transfers to states and 

localities, noninfrastructure

Payments to retirees

Payments to individuals

First-time home buyer tax credit

Business tax credits

Higher-income tax cuts

Lower- and middle-income tax cuts

Purchases by federal 

government

Other

Total=$787 billion

State Labor Market 

Conditions Will Affect 

Results of Recovery Act 

Spending 

The employment effects of Recovery Act funds will likely vary with the 

strength of the labor market in a recipient’s location. Recipients located in 

areas where labor markets are weak, that is, where unemployment is high, 

may find it easier to hire people and may be able to do so at lower wages 

than those located in areas where the recession has had little effect on 

labor markets. Consequently, recipients located in areas with weak labor 

markets may be able to employ more people than those located in areas 

with strong labor markets, all else being equal. 

The percentage of the nation’s labor force that is unemployed has reached 

a level not seen in decades. For example, the unemployment rate reached 

10.2 percent in October 2009, its highest rate since April 1983. The national 

unemployment rate was 4.9 percent in December 2007, the month that 

marked the end of the last business cycle and the beginning of the current 

recession. In general, the unemployment rate rises and falls over the 

Page 46 GAO-10-223 Recovery Act
 

course of the business cycle, generally increasing during a recession and 

decreasing during an expansion. Cyclical changes in the national 

unemployment rate reflect changes in state unemployment rates. State 

unemployment rates vary over time in much the same way that the 

national unemployment rate varies—increasing during recessions, 

decreasing during expansions, but changing direction at different times. 

Estimates of current labor market strength, as measured by the 

unemployment rate, differ across states. Figure 6 ranks states according to 

the most recent available unemployment data—September 2009. While the 

national unemployment rate at the time was 9.8 percent, state 

unemployment rates ranged from a minimum of 4.2 percent in North 

Dakota to a maximum of 15.3 percent in Michigan. Twenty-seven states 

had unemployment rates in September 2009 that were less than the 

national unemployment rate by one percentage point or more, and nine 

states and the District of Columbia had unemployment rates that exceeded 

the national unemployment rate by one percentage point or more, and 14 

states had unemployment rates that were within one percentage point of 

the national unemployment rate. 

Page 47 GAO-10-223 Recovery Act
 

Figure 6: State Unemployment Rates, September 2009 

States

0 2 4 6 8 10 12 14 16

Michigan

Nevada

Rhode Island

California

South Carolina

Oregon

District of Columbia

Florida

Kentucky

North Carolina

Alabama

Tennessee

Illinois

Ohio

Georgia

New Jersey

Indiana

Missouri

Washington

Massachusetts

Mississippi

Arizona

West Virginia

New York

Idaho

Pennsylvania

Maine

Alaska

Connecticut

Wisconsin

Delaware

Texas

New Mexico

Louisana

Minnesota

New Hampshire

Hawaii

Maryland

Arkansas

Colorado

Kansas

Wyoming

Montana

Virginia

Vermont

Oklahoma

Iowa

Utah

Nebraska

South Dakota

North Dakota

Unemployment rate in percent, September 2009

Source: GAO analysis of U.S. Bureau of Labor Statistics data.

4.2

4.8

4.9

6.2

6.7

6.7

6.7

6.7

6.7

6.8

6.9

7

7.1

7.2

7.2

7.2

7.3

7.4

7.7

8.2

8.3

8.3

8.4

8.4

8.5

8.8

8.9

8.9

9.1

9.2

9.3

9.3

9.5

9.6

9.8

8.8

10.1

10.1

10.5

10.5

10.7

10.8

10.9

11

11.4

11.5

11.6

12.2

13

13.3

15.3

Page 48 GAO-10-223 Recovery Act
 

Note: State unemployment rates are seasonally adjusted state unemployment rates for September 

2009 from the Local Area Unemployment Statistics produced by the U.S. Bureau of Labor Statistics. 

Estimates of state employment rates for September 2009 are preliminary. 

Labor markets in every state weakened over the course of the recession, 

but the degree to which this has occurred varies widely across states. 

Figure 7 shows the geographic distribution of the magnitude of the 

recession’s impact on unemployment as measured by the percent change 

in unemployment between December 2007 and September 2009. Alabama’s 

unemployment rate has grown the most over this period, increasing by 

about 182 percent. Other states with relatively high unemployment rate 

growth over this period include Florida, Hawaii, Wyoming, Idaho, and 

Nevada, all of which have seen their unemployment rates increase by more 

than 120 percent. At the other end of the spectrum are states like 

Minnesota, Mississippi, Arkansas, North Dakota, and Alaska. 

Unemployment rates in these states have grown by less than 60 percent 

between December 2007 and September 2009. Alaska’s unemployment rate 

growth during this period has been the slowest, measuring only about 33 

percent. 

Page 49 GAO-10-223 Recovery Act
 

Figure 7: State Unemployment Rate Growth during Recession (Percent Increase) 

Pa.

91.3%

Ore.

117%

Nev.

155.8%

Idaho

114.4%

Mont.

76.3%

Wyo.

134.5%

Utah

106.7%

Ariz.

111.6% N.Mex.

113.9%

Colo.

70.7%

N.Dak.

35.5%

S.Dak.

77.8%

Nebr.

81.4%

Tex.

86.4%

Kans.

68.3%

Okla.

86.1%

Minn.

52.1%

Iowa

76.3%

Mo.

79.2%

Ark.

44.9%

La.

89.7%

Ill.

87.5%

Miss.

50.8%

Ind.

113.3%

Ky.

98.2%

Tenn.

98.1%

Ala.

181.6%

Fla.

129.2%

Ga.

98%

S.C.

100%

N.C.

116%

Va.

103%

Ohio

74.1%

N.H. (105.7%)

Mass. (106.7%)

R.I. (116.7%)

Mich.

109.6%

Calif.

106.8%

Wash.

102.2%

Wis.

84.4%

N.Y.

93.5%

Maine

80.9%

Vt. (67.5%)

W.Va.

107%

Alaska

33.3%

Hawaii

132.3%

Conn. (71.4%)

N.J. (117.8%)

Del. (118.4%)

Md. (100%)

D.C. (96.6%)

Source: Copyright © Corel Corp. All rights reserved (map); GAO analysis of U.S. Bureau of Labor Statistics data.

States in the bottom third of the unemployment rate growth distribution

States in the middle third of the unemployment rate growth distribution

States in the top third of the unemployment rate growth distribution

Note: State unemployment rate growth is the percent change in the seasonally adjusted state 

unemployment rate from December 2007 to September 2009. 

While the recession has weakened labor markets in every state, those in 

some states may be showing signs of recovering. Table 8 lists the states for 

which unemployment rates in September 2009 are less than their peak 

unemployment rates. The unemployment rate peaked in some states as 

early as May 2009. In several additional states, the unemployment rate was 

higher in June or July than it was in September. Although unemployment 

Page 50 GAO-10-223 Recovery Act
 

rates in these states may start to increase again in the future, for the 

moment it seems that labor markets in these states are getting stronger. 

Table 8: State Unemployment Rates, Peak and Most Recent 

Unemployment rate (percent) Unemployment rate (percent) 

State Sept 2009 Peak 

Peak 

month 

Percent 

change State Sept 2009 Peak 

Peak 

month

Percent 

change

Minnesota 7.3 8.4 June -13.1 Tennessee 10.5 10.8 June -2.8

Colorado 7.0 7.8 July -10.3 Hawaii 7.2 7.4 May -2.7

Indiana 9.6 10.7 June -10.3 Kentucky 10.9 11.2 August -2.7

Ohio 

10.1 11.2 July -9.8

North 

Carolina 10.8 11.1 May -2.7

Vermont 

6.7 7.4 May -9.5

North 

Dakota 4.2 4.3 August -2.3

Kansas 

6.9 7.5 July -8.0

West 

Virginia 8.9 9.1 June -2.2

Wisconsin 8.3 9.0 July -7.8 Nebraska 4.9 5.0 August -2.0

Oregon 11.5 12.2 May -5.7 Georgia 10.1 10.3 July -1.9

Virginia 6.7 7.1 June -5.6 Oklahoma 6.7 6.8 August -1.5

Mississippi 9.2 9.7 August -5.2 Delaware 8.3 8.4 June -1.2

Louisiana 7.4 7.8 August -5.1 Maine 8.5 8.6 August -1.2

Arkansas 7.1 7.4 July -4.1 Arizona 9.1 9.2 July -1.1

South 

Carolina 11.6 12.1 June -4.1

Idaho 

8.8 8.9 August -1.1

South 

Dakota 4.8 5.0 June -4.0

California 

12.2 12.3 August -0.8

Source: GAO analysis of U.S. Bureau of Labor Statistics data. 

Note: Peak unemployment rates are the maximum employment rates since December 2007. Peak 

dates are the most recent month and year during which the unemployment rate was equal to its 

maximum value since December 2007. 

State and Sectoral 

Employment Trends 

Table 9 shows the change in employment between December 2007 and 

September 2009. Employment in Arizona, Florida, Georgia, Michigan, 

Nevada, and Oregon in September 2009 was over 7 percent lower than it 

was in December 2007 in each state. On the other hand, employment in 

Louisiana and South Dakota fell by less than two percent over the same 

period, and employment in Alaska, North Dakota, and the District of 

Columbia has increased during that time. 

Page 51 GAO-10-223 Recovery Act
 

Table 9: Change in Employment, December 2007 to September 2009 

State 

Change in 

employment (1,000s) 

Percent change in 

employment 

(percent) State 

Change in 

employment (1,000s)

Percent change in 

employment 

(percent)

Alabama -118.1 -5.9 Montana -9.6 -2.1

Alaska 1.8 0.6 Nebraska -20 -2.1

Arizona -267.7 -10.0 Nevada -110.5 -8.5

Arkansas -37.7 -3.1 New Hampshire -19.1 -2.9

California -988.9 -6.5 New Jersey -168.5 -4.1

Colorado -110.5 -4.7 New Mexico -31.7 -3.7

Connecticut -82.2 -4.8 New York -213.2 -2.4

Delaware -26.1 -6.0 North Carolina -250.3 -6.0

D.C. 4.3 0.6 North Dakota 5.2 1.4

Florida -617.5 -7.8 Ohio -321.5 -5.9

Georgia -316.1 -7.6 Oklahoma -31.1 -2.0

Hawaii -36.9 -5.9 Oregon -124.3 -7.2

Idaho -43.2 -6.6 Pennsylvania -208 -3.6

Illinois -356.5 -6.0 Rhode Island -29.7 -6.1

Indiana -176.4 -5.9 South Carolina -100.2 -5.1

Iowa -45.7 -3.0 South Dakota -4.4 -1.1

Kansas -54.7 -3.9 Tennessee -157.6 -5.6

Kentucky -113.3 -6.1 Texas -240.2 -2.3

Louisiana -26.4 -1.4 Utah -64.3 -5.1

Maine -27.4 -4.4 Vermont -14.9 -4.8

Maryland -78 -3.0 Virginia -125.6 -3.3

Massachusetts -114.4 -3.5 Washington -126.9 -4.3

Michigan -416.2 -9.8 West Virginia -25.1 -3.3

Minnesota -132 -4.8 Wisconsin -156.8 -5.4

Mississippi -54.4 -4.7 Wyoming -6.6 -2.2

Missouri -89.5 -3.2

Source: GAO analysis of U.S. Bureau of Labor Statistics data. 

Note: Employment is total nonfarm seasonally adjusted employment among people age 16 and over 

from the Current Employment Statistics produced by the U.S. Bureau of Labor Statistics. 

Employment has declined since December 2007, when the current 

recession began. However, some signs have appeared that the losses in 

employment are slowing. Job losses in October 2009 numbered 190,000. 

This number is about equal to average job losses of about 188,000 per 

month in August, September, and October 2009. The rate at which 

Page 52 GAO-10-223 Recovery Act
 

employment has declined over the past three months is thus lower than 

the rate at which it declined in May, June, and July 2009, when job losses 

averaged about 357,000 per month. The rate at which employment has 

declined over the past three months is thus also lower than the rate at 

which it declined between November 2008 and April 2009, when job losses 

averaged about 645,000 per month. 

The current employment contraction has been more pronounced in the 

goods-producing sector, in which employment fell by about 17 percent 

between December 2007 and October 2009, than the service-providing 

sector, in which employment fell by about three percent over the same 

period. The goods-producing sector includes the construction and 

manufacturing industries, in which employment has fallen by about 21 

percent and 15 percent, respectively, between December 2007 and October 

2009. The goods-producing sector also includes the mining and logging 

industry, which lost about 6 percent of its jobs during the same time. 

Service-providing industries include financial activities, information, 

professional and business services, and trade, transportation, and utilities, 

all of which had employment declines of more than six percent between 

December 2007 and October 2009. Employment declines in the leisure and 

hospitality industry were about three percent, and employment in 

education and health services increased by about 4 percent at the same 

time. 

Fiscal Condition of States 

Will Affect the Results of 

Recovery Act Spending 

The employment effects of Recovery Act funds allocated to state and local 

governments will also likely vary with their degree of fiscal stress, as well 

as with the factors mentioned above. Because recessions manifest in the 

form of lower output, employment, and income, among other things, 

reductions in output, employment, and income lead state and local 

governments to collect less tax revenue and at the same time cause 

households’ demand for publicly provided goods and services to increase. 

State governments often operate under various constraints, such as 

balanced budget requirements, so they generally must react to lower tax 

revenues by raising tax rates, cutting publicly provided programs and 

services, or drawing down reserve funds, all but the last of which amplify 

recessionary pressure on households and businesses. Local governments 

must do the same unless they can borrow to make up for lost tax revenue. 

By providing funds to state and local governments, the Recovery Act 

intends to forestall, or at least moderate, their program and service cuts, 

reserves liquidation, and tax increases. 

Page 53 GAO-10-223 Recovery Act
 

In addition to the type of spending undertaken, the size of the multiplier 

and resultant employment effects will depend on the extent to which aid is 

not diverted to reserves. Generally speaking, states with weaker 

economies and finances will be more likely to spend Recovery Act dollars. 

States that may suffer little or no harm from a national downturn are less 

motivated to make full use of any federal assistance.31 Rather than 

increase spending, they may choose to cut taxes or, where permitted by 

law, add to their reserves. Tax cuts would have some simulative effect, bu

additions to reserves would reduce any multiplier effect. The increase

FMAP available under the Recovery Act is for state expenditures for 

Medicaid services. However, the receipt of this increased FMAP may 

reduce the state share for the Medicaid programs. States are prohibited 

from using any funds directly or indirectly attributable to the increased

FMAP for state rainy day funds,

t 

d 

revenue shortfall. 

 

32 but states have reported using funds 

made available a result of the increased FMAP for a variety of purposes 

including offset of general fund deficits and tax 

The availability of reserves and the possibility of borrowing points out the 

difficulties of gauging the impact of federal policy by the observed timing 

of aid flows. The expectation of aid could encourage governments to draw 

more out of reserves or to borrow more than they would otherwise. The 

rationale is that the expected aid would replace the reserves or liquidate 

the new debt. In this way, the timing of aid could postdate the impact. 

Research on individual consumption has long wrestled with the problem 

of how expectations influence household decisions. State and local 

governments must also look forward in making fiscal decisions. 

The recession has substantially affected the states’ fiscal conditions. In 

recessions, state and local governments are motivated to enact “procyclical” measures that aggravate the downturn. Balanced budget 

requirements and other constraints cause them to reduce spending and 

raise taxes, generating what is called “fiscal drag.” Federal assistance can 

reduce the need for such measures. In this way, the negative employment 

effects of fiscal drag can be precluded and existing jobs can be saved. With 

sufficient aid, it is possible for state and local governments to go beyond 

31We have ongoing work examining the implementation of maintenance of effort or similar 

provisions of the Recovery Act. Such provisions are designed to prevent recipients from 

substituting federal funds for other funds that would have otherwise have been spent. We 

expect to issue our report later this calendar year. 

32Recovery Act, div. B, § 50012(f)(3). 

Page 54 GAO-10-223 Recovery Act
 

saving existing jobs to creating additional ones. However, there are likely 

to be limits to the abilities of governments to spend aid quickly enough to 

affect employment 

The recession has substantially reduced states’ and local governments’ 

combined tax revenues. Figure 8 indicates that tax revenue collected in 

the second quarter of 2009 fell from the peak in the second quarter of 2008 

by more than $130 billion. 

Figure 8: State and Local Tax Receipts 

Billions of 2009 dollars

Source: GAO analysis of U.S. Bureau of Economic Analysis data.

Date

0

1,000

1,050

1,100

1,150

1,200

1,250

1,300

1,350

1,400

2001Q1

 2001Q2

 2001Q3

 2001Q4

 2002Q1

 2002Q2

 2002Q3

 2002Q4

 2003Q1

 2003Q2

 2003Q3

 2003Q4

 2004Q1

 2004Q2

 2004Q3

 2004Q4

 2005Q1

 2005Q2

 2005Q3

 2005Q4

 2006Q1

 2006Q2

 2006Q3

 2006Q4

 2007Q1

 2007Q2

 2007Q3

 2007Q4

 2008Q1

 2008Q2

 2008Q3

 2008Q4

 2009Q1

 2009Q2

Note: State and local tax receipts are real state and local tax receipts in billions of 2009 dollars, 

seasonally adjusted at annual rates (the quarterly amount multiplied by four). 

State and local revenues are not likely to return to their previous levels 

until well after the recession has ended. After the 2001 recession, tax 

receipts did not begin to recover until after second quarter of 2003, well 

after the ‘official’ end of the recession in fourth quarter of 2001. However, 

the fall in receipts after the second quarter of 2008 is dramatic. In a survey 

of the nation’s state governments, the National Governors Association 

reported that outlays for current services provided through states’ general 

funds decreased by 2.2 percent in fiscal year 2009, which ended in June 

2009 for most states. Spending for fiscal year 2010 is projected to fall by 

Page 55 GAO-10-223 Recovery Act
 

2.5 percent. In light of average annual increases of five percent for total 

state and local government outlays, any decrease is a significant 

adjustment. 

Most states have some sort of requirement to balance operating budgets. 

However, most state governments are able to establish reserve funds. 

Maintenance of a baseline of five percent of annual outlays for a state’s 

fund is regarded by state budget officers as prudent. A lower level could 

increase a state’s borrowing costs. Since 2006 these funds have decreased. 

In the wake of the 2001 recession, according to an analyst at the 

Rockefeller Institute of Government, state governments in fiscal year 2002 

drew as much as 4.8 percent of their revenues from fund balances.33 The 

National Governors Association reports that fund balances peaked in 2006 

at $69 billion, at 11 percent of general fund expenditures. The funds 

declined to 9.1 percent by 2008 and were estimated at 5.5 percent—$36.7 

billion—in June 2009. However, by fiscal year 2010, these funds are 

projected to fall to 5.3 percent of outlays. 

In addition, for 2009 there is variation in state government reserves. For 

example, 11 states had total reserves in excess of 10 percent of outlays, 

while others, such as California, had total reserves less than 1 percent of 

outlays. This may be seen in figure 9. 

 

33Donald J. Boyd, “Coping with Effects of Recession in the States” (presentation to the 

Governmental Research Association Annual Conference, Washington, D.C., July 2009), 

http://www.rockinst.org/pdf/government_finance/2009-07-Boyd_GRA_Presentation.pdf 

(accessed November 13, 2009). 

Page 56 GAO-10-223 Recovery Act
 

Figure 9: Total Year-End Balances as a Percentage of Expenditures, Fiscal Year 2009 

Pa.

1.9%

Ore.

5.7%

Nev.

5.1%

Idaho

7.2%

Mont.

17.6%

Wyo.

15.5%

Utah

7.6%

Ariz.

-4.6% N.Mex.

9.5%

Colo.

2.0%

N.Dak.

55.3%

S.Dak.

9.3%

Nebr.

25%

Tex.

20.5%

Kans.

0.9%

Okla.

14.5%

Minn.

3.4%

Iowa

9.8%

Mo.

5.7%

Ark.

0%

La.

17.5%

Ill.

1.4%

Miss.

7.3%

Ind.

9.3%

Ky.

0.5%

Tenn.

6.3%

Ala.

3.0%

Fla.

4.5%

Ga.

12.4%

S.C.

2.5%

N.C.

2.7%

Va.

4.6%

Ohio

4.7%

N.H. (3.3%)

Mass. (5.3%)

R.I. (0.3%)

Mich.

0%

Calif.

-2.5%

Wash.

-0.3%

Wis.

1.5%

N.Y.

2.7%

Maine

2.5%

Vt. (5.2%)

W.Va.

10.3%

Alaska

108.4%

Hawaii

2.6%

Conn. (6.5%)

N.J. (2.3%)

Del. (11.4%)

Md. (7.9%)

Source: Copyright © Corel Corp. All rights reserved (map); GAO analysis of U.S. Bureau of Labor Statistics data.

Less than one percent

1.0 percent to 4.9 percent

5.0 to 9.9 percent

10 percent or more

Diversity in the economic and fiscal conditions of the states and 

differences in the size and composition of Recovery Act funds they receive 

suggest that the potential for employment gains varies across states. We 

will continue work in this area, along with our other work on federal-state 

fiscal interactions. 

Page 57 GAO-10-223 Recovery Act
 

In commenting on a draft of our report, OMB staff told us that OMB 

generally accepts the report’s recommendations. It has undertaken a 

lessons learned process for the first round of recipient reporting and will 

generally address the report’s recommendations through that process. 

Agency Comments 

We are sending copies of this report to the Office of Management and 

Budget and to the Departments of Education, Housing and Urban 

Development, and Transportation. The report will be available at no 

charge on the GAO Web site at http://www.gao.gov. 

If you or your staffs have any questions about this report, please contact J. 

Christopher Mihm or Susan Offutt at (202) 512-5500. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff 

report are listed in appendix III. 

who made major contributions to this 

Gene L. Dodaro 

Acting Comptroller General of the United States 

Page 58 GAO-10-223 Recovery Act
 

List of Addressees 

The Honorable Nancy Pelosi 

Speaker of the House of Representatives 

The Honorable Robert C. Byrd 

President Pro Tempore of the Senate 

The Honorable Harry Reid 

Majority Leader 

United States Senate 

The Honorable Mitch McConnell 

Republican Leader 

United States Senate 

The Honorable Steny Hoyer 

Majority Leader 

House of Representatives 

The Honorable John Boehner 

Minority Leader 

House of Representatives 

The Honorable Daniel K. Inouye 

Chairman 

The Honorable Thad Cochran 

Vice Chairman 

Committee on Appropriations 

United States Senate 

The Honorable Dave Obey 

Chairman 

The Honorable Jerry Lewis 

Ranking Member 

Committee on Appropriations 

House of Representatives 

Page 59 GAO-10-223 Recovery Act
 

The Honorable Joseph I. Lieberman 

Chairman 

The Honorable Susan M. Collins 

Ranking Member 

Committee on Homeland Security and Governmental Affairs 

United States Senate 

The Honorable Edolphus Towns 

Chairman 

The Honorable Darrell E. Issa 

Ranking Member 

Committee on Oversight and Government Reform 

House of Representatives 

Page 60 GAO-10-223 Recovery Act
A

Data—Exa

ppendix I: Calculating Full-Time Equivalent 

mples of Guidance and Challenges 

Page 61 GAO-10-223 

Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges

The Office of Management and Budget (OMB) and federal agencies have 

provided wide-ranging guidance to states on how to report full-time 

equivalent (FTE) data—that is, jobs created or retained. OMB staff 

reported that questions on FTEs dominated the inquiries they fielded 

during the first round of recipient reporting, and recipients had various 

understandings of how to report an FTE. Following are selected examples 

of the challenges of reporting and calculating FTEs, as seen through public 

housing agencies and four states—California, Florida, Georgia, and 

Massachusetts. 

As we reported in September 2009, the Department of Housing and Urban 

Development (HUD) is using two methods to satisfy reporting 

requirements for public housing agencies under the Recovery Act. First, 

OMB and the Recovery Act Board have created and manage 

www.Federalreporting.gov (Federalreporting.gov), a Web site where all 

Recovery Act recipients can report on the nature of projects undertaken 

with Recovery Act funds and on jobs created or retained. Second, HUD 

developed the Recovery Act Management and Performance System 

(RAMPS) in response to reporting requirements outlined in section 1609 of 

the Recovery Act.1

 HUD officials said approximately 96 percent of housing 

agencies had successfully reported into Federalreporting.gov. Initial 

reports suggested a lower reporting rate, but this was due to a substantial 

number of housing agencies incorrectly entering values into certain 

identification fields, such as the award ID number, the awarding agency, 

or the type of funding received. HUD officials said that the system did not 

have validation measures in place to ensure the correct award ID numbers 

were entered. In addition, housing agencies could not edit the award ID 

number without submitting a new report. According to a HUD official, 

OMB initially classified reports that could not be matched with a federal 

agency as “orphaned.” The HUD official told us HUD program and 

Recovery team staff reviewed reports submitted with nonmatching award 

ID numbers and OMB’s list of reports that could not be matched to 

determine if they matched HUD awards. 

Public Housing 

Agencies Experienced 

Problems with the 

Process of Recipient 

Reporting and the 

FTE Calculation 

 

1

Section 1609 of the Recovery Act requires that adequate resources must be devoted to 

ensuring that applicable environmental reviews under the National Environmental Policy 

Act are completed on an expeditious basis and that the shortest existing applicable process 

under the National Environmental Policy Act shall be used. The National Environmental 

Policy Act protects public health, safety, and environmental quality by ensuring 

transparency, accountability, and public involvement in federal actions and in the use of 

public funds. 

 Recovery Act 
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

According to HUD officials, public housing agencies encountered 

challenges related to registration and system accessibility. For example, a 

HUD official said the registration process for Federalreporting.gov 

requires several steps such as obtaining a DUNS number, registering with 

the Central Contractor Registration (CCR) and obtaining a Federal 

Reporting Personal Identification Number (FRPIN). The HUD official told 

us these steps are necessary for validating the recipient reports because 

they ensure the appropriate points of contact at the appropriate 

organizations—in this case, public housing agencies—are reporting for 

each program. The Federalreporting.gov Web site states that each 

recipient’s point of contact information is taken directly from the CCR and 

if an organization changes its point of contact information it will take 48 

hours for Federalreporting.gov to receive the change and e-mail the FRPIN 

and temporary password to the new point of contact. According to the 

HUD official, a housing agency’s contact information in CCR is sometimes 

outdated and the systems are often not updated in time for access to be 

correctly transferred. Additionally, one housing agency official reported he 

saved his data entry as a draft before being timed out of the system, but 

was unable to retrieve the data when he reentered the reporting Web site. 

A HUD official said in the future, HUD and OMB will need to improve the 

function of the system and the official said that they are working to ensure 

all housing agencies have access to the reporting systems. 

According to a HUD official, there was widespread misunderstanding by 

public housing agencies about OMB’s methodology for calculating the 

number of jobs created or retained by the Recovery Act, in part because 

housing agencies are not familiar with reporting jobs information. In a few 

cases, we found that public housing agencies had reported the number of 

jobs created or retained into Federalreporting.gov without converting the 

number into full-time equivalents. For example, officials from one housing 

agency reported the number of people, by trade, who worked on Recovery 

Act related projects, but did not apply the full-time equivalent calculation 

outlined by OMB in the June 22 reporting guidance. Additionally, officials 

from another public housing agency told us that they based the number of 

jobs they reported into Federalreporting.gov on letters from their 

contractors detailing the number of positions rather than full-time 

equivalents created as a result of their Recovery Act-funded projects. In 

another case, a housing agency official reported having difficulty locating 

guidance on calculating job creation. As a result, the housing agency may 

have underreported jobs data from an architectural firm providing design 

services for a Recovery Act window replacement project at a public 

housing complex. 

Page 62 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

HUD officials cited the fact that OMB and HUD provided additional 

clarification and guidance close to the deadline for recipient reporting as a 

factor in housing agencies’ confusion about the methodology for counting 

jobs. According to a HUD official, HUD was in discussions with OMB 

about finalizing and clarifying portions of the June 22, 2009, job guidance 

right up to the end of September. In early September, HUD posted the 

OMB guidance to its Web site and provided information by e-mail to 

housing agencies on registration for Federalreporting.gov, as well as links 

to Web seminars and training provided by OMB. HUD issued further 

guidance to public housing agencies by e-mail on September 25, 2009, 

approximately 2 weeks before the October 10, 2009, deadline for recipient 

reporting, providing templates and data dictionaries tailored to the Public 

Housing Capital Fund. The guidance also reiterated the recipient reporting 

responsibilities for public housing agencies. 

HUD officials told us they did not have enough time to translate some of 

the terminology into concrete terms that would be clearer to housing 

agency officials. For example, HUD posted a jobs calculator spreadsheet 

to its Web site, and HUD field staff would direct housing agencies to this 

guidance when they asked specific questions about how to calculate jobs. 

Nonetheless, greater instruction may be needed beyond what was 

provided to housing agencies on the job calculator’s instructions page. A 

HUD official said it seemed like some housing agencies may have pulled 

information for the recipient reports from the wrong fields in the job 

calculator, which produced errors. A HUD official stated they will work 

with OMB to improve housing agencies’ understanding of the methodology 

for reporting in full-time equivalents prior to the next round of recipient 

reporting in January 2010. 

State officials from the California Recovery Task Force and the California 

Office of the State Chief Information Officer (CIO) explained that while 

the centralized reporting structure had several benefits, challenges with 

changing reporting requirements from federal agencies and technological 

glitches still occurred. 

As a centralized reporting state, each state agency reported directly to the 

CIO through the California ARRA Accountability tool. The Task Force is 

responsible for uploading the data to Federalreporting.gov. However, 

according to state officials, local government agencies that received direct 

Recovery Act dollars from the federal government are not under the Task 

Force’s purview of the state officials and report to Federalreporting.gov on 

their own. State officials stated that a centralized reporting structure 

California’s 

Experiences with 

Recipient Reporting 

Requirements 

Page 63 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

allows the CIO to act as a liaison between OMB and the state for faster 

reconciliation of issues. The CIO, on behalf of the task force, was 

responsible for collecting, validating, and uploading data from state 

agencies to Federalreporting.gov. The state officials believed the process 

went well overall and commended their state team for successfully 

reporting into Federalreporting.gov. The Task Force officials believed the 

reporting process could be improved if OMB provided a comprehensive 

list of awards to better crosscheck reporting. California officials stated 

that many of the challenges in reporting did not come from the additional 

information requested during October 11 to 20, but from changes 

immediately prior to the September 30 cut-off date. These changes 

included issues such as the Department of Education’s request to include 

Central Contract Registration numbers on September 21, and FHWA’s 

changes to four of the data elements, including the award amounts. 

California officials have a greater appreciation of what to expect during 

the reporting process. They believe that the continuous communication 

with the state agencies, including weekly data group meetings at which as 

many as 60 people attended, contributed to the overall success of the 

reporting process. They also have been developing their own internal logic 

checks to assist with data validation. California officials continue to be 

concerned that problems at Federalreporting.gov and changing agency 

requirements will cause subrecipient data, initially correctly collected in 

accordance with federal guidance, to be rejected, which will result in 

penalties for late submissions. 

The Florida Department of Transportation (FDOT) has reporting 

requirements under both sections 1512 and 1201 of the Recovery Act. 

Although the state had an existing system in place that could be used for 

section 1201 reporting, officials decided to develop two additional systems 

for 1512 reporting. One system was created to assist FDOT in reporting 

information to the state Recovery Czar and a second system for 

employment reporting was created to allow subrecipients to enter total 

number of employees, payroll, and employee hours for Recovery Actfunded highway projects. According to state officials, the system was 

launched on May 29, 2009, and is currently in use. FDOT officials 

experienced no significant reporting problems while submitting more than 

400 reports. 

Florida Department of 

Transportation’s 

Experiences with 

Reporting and Data 

Quality Reviews 

Florida began preparing for reporting early and conducted extensive 

training to assist contractors, consultants, and local agencies in the 

collection of employment data required by the Recovery Act. For example, 

Page 64 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

FDOT’s Office of Inspector General (OIG) developed five computer-based 

training modules to assist department staff and external partners in the 

use of the electronic reporting system. FDOT also partnered with its OIG 

and the Florida Division of the Federal Highway Administration (FHWA) 

to conduct town hall presentations for its seven District Offices and 

Florida’s Turnpike Enterprise. The presentations were designed to ensure 

consistent use of the electronic employment data application. In 

September, OIG followed up with a survey to local agencies to determine 

the levels of proficiency for using the department’s electronic employment 

reporting system and to solicit feedback. 

FDOT’s electronic employment data reporting system provides for several 

levels of data review and approval. For example, once the subrecipient 

enters their monthly employment data into the electronic system, the data 

is available for review and subsequent approval by the local agency project 

manager. Once approved, the data is available for review and approval by 

the department’s district office project manager. The district office project 

manager performs a reasonableness check of the submitted data prior to 

electronically approving the same. 

The electronic employment data is then available for review by OIG where 

two types of analyses are performed. First, OIG identifies whether the 

subrecipient should be reporting job data by comparing submitted data 

(and subrecipient identifiers) against the master list of awarded Recovery 

Act transportation projects. Second, OIG compares previously submitted 

subrecipient information against information contained in its current 

submission to determine any data anomalies or variances. Should any 

significant data anomalies or variances occur, OIG will contact the 

appropriate district and local agency. 

FDOT did not require subrecipients to submit verification of their job data 

but subrecipients were advised by FDOT to maintain documentation for 

review. For two subrecipients we visited, we found the extent to which 

documentation was being maintained varied. For example, one 

subrecipient kept time-sheets for all employees associated with Recovery 

Act projects, while another had documentation for its hourly employees 

but not its management employees. 

Page 65 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

Reporting Process: In Georgia, one of the highway contractors we visited 

noted that it was responsible for reporting on about 30 Recovery Actfunded projects with approximately 10 subrecipients for each project. The 

contractor stated that they are required to fill out a monthly report (FHWA 

Form 1589) indicating the number of employees, the hours worked, and 

the dollars charged to the job through a direct portal created by Georgia 

Department of Transportation (GDOT). According to the contractor, this 

reporting requirement is in the contract, and GDOT will withhold payment 

if this report is not completed. As the general contractor, the firm is also 

responsible for collecting the 1589 information from its subcontractors on 

each job. Officials with the firm stated that they would withhold payment 

from the subcontractors if they fail to provide the information. We 

examined these contracts and confirmed these requirements. In addition 

to the 1589 report, the contractor also submits certified payroll to GDOT 

on a monthly basis. 

Reporting from a 

Georgia Highway 

Contractor’s 

Perspective 

Guidance and Challenges: In terms of guidance, the contractor noted 

that there was not a lot of training provided but that they did not 

necessarily need much training. The main challenges raised were issues 

with making changes within the GDOT system and the DUNS number 

field. For example, officials explained once a report was submitted into 

GDOT’s system, it could not be edited, which made errors in entry or 

reporting difficult to correct. The contractor has discussed this issue with 

GDOT and hopes a solution will be reached for the next reporting cycle. 

The DUNS number requirement was an issue for several subrecipients 

since they did not have a number and they were under the impression that 

a cost was involved in obtaining a number, which there was not. After 

discussions with GDOT, it was determined that subrecipients did not need 

a DUNS number, but the field could not be blank. Therefore, GDOT 

advised the contractor to have its subrecipients complete the file by 

entering “not applicable.” The contractor suggested that improvements in 

reporting could be achieved by delaying the reporting date to GDOT to 

allow more time to handle delays in payroll and obtaining supporting 

information. Overall, the contractor felt that the September report was the 

most accurate month reported to date and believed greater accuracy will 

be achieved over time. 

Data Quality: Officials of the highway contractor told us they think they 

have a handle on the process and were confident in the data submitted. In 

their words, “if it’s inaccurate, we paid somebody wrong” since the report 

comes out of their payroll system. In terms of data from subcontractors, 

the officials noted that their confidence varied somewhat across 

Page 66 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

subcontractors. Officials explained that information varied, based on the 

capacity and expertise of the subcontractor (that is, experience in 

reporting and if a certified payroll is in place). Officials explained they had 

greater confidence in subcontractors that had certified payroll. They 

provided several examples of subrecipients who were truckers or haulers 

who are not familiar with reporting and often are a small operation of one 

employee. Officials noted that the number of truckers or haulers on a 

project is often large in order to meet disadvantaged business 

requirements. Officials questioned if truckers and haulers should be part 

of the job creation or retained count since similar positions may not be 

counted for subcontractors that provide materials such as pipe. Officials 

believed over time, subcontractors would become more comfortable and 

familiar with the process. 

Reporting Process: An official at a major highway contractor we 

interviewed in Massachusetts explained that one of his primary 

responsibilities as the Construction Cost Accountant is to certify payroll 

records and ensure compliance with federal labor standards. This 

company is the general contractor (or prime contractor) on six Recovery 

Act highway construction projects. 

Reporting from a 

Massachusetts 

Highway Contractor’s 

Perspective 

A company official stated that that there was no additional burden 

associated with filing the quarterly recipient reports because they 

routinely report employment data to the Massachusetts Department of 

Transportation (MassDOT), Highway Division for federal-highway funded 

projects through the MassDOT Highway Division’s Equitable Business 

Opportunities (EBO) system. Although there were additional data 

elements required for Recovery Act projects, the company official noted 

that FHWA Form 1589 specifies these additional reporting elements, and 

they have been added to the EBO system to make it easier for contractors 

and subcontractors to report on a monthly basis. 

According to the company official, the process was very straightforward. 

Contractors and subcontractors log into the EBO system and can see 

detailed information on all the projects they are working on for the 

MassDOT Highway Division. Typically, by the 15th day of each month, 

contractors and subcontractors upload their certified payroll files into the 

EBO system. However, for the September submission, MassDOT’s 

Highway Division required contractors to submit their employment reports 

early by October 9, so that they could meet the state’s October 10 deadline 

of submitting the quarterly Recovery Act report. 

Page 67 GAO-10-223 Recovery Act
Appendix I: Calculating Full-Time Equivalent 

Data—Examples of Guidance and Challenges 

Guidance and Challenges: The official noted that the only guidance he 

received came from the MassDOT Highway Division in the form of training 

on the EBO system, which he said helped contractors and subcontractors 

transition from the old employment reporting system to the EBO system. 

He noted that for contractors that were used to working with complex 

accounting systems, this training was adequate, but for smaller 

contractors with little computer experience, the training could have been 

better. In general, the official observed that most contractors and 

subcontractors are very pleased with the new system because it interfaces 

so well with their existing accounting and certified payroll databases and 

because the cost is low. 

Data Quality: There are several steps for ensuring data quality. First, a 

company official explained that most large contractors and many 

subcontractors have accounting and payroll data systems that interface 

with the EBO database well, so they are able to upload data from these 

systems directly into the EBO system, eliminating the need to reenter 

employment data. However, some smaller contractors don’t have these 

systems and thus must enter the data by hand each month. The company 

official stated that he is not concerned with the quality of data because it is 

verified both internally and by the MassDOT Highway Division. 

The official explained that the MassDOT Highway Division puts the 

responsibility for ensuring that subcontractors file monthly reports with 

the general contractor, and his company ensures subcontractor 

compliance by withholding their reimbursements. Although it is rarely 

needed, the official noted that withholding payments to subcontractors is 

a very effective tool for getting subcontractors to submit their monthly 

reports. Furthermore, all subcontractor employment reports are verified 

against the daily duty log that is kept by the project supervisor, who is an 

employee of the company. The MassDOT Highway Division also posts 

resident engineers at each job site on a daily basis, and they keep a daily 

diary of employment and work status that is used to verify the data 

submitted by general contractors in the MassDOT Highway Division 

project management system. This is the same system that is used to 

generate contractor invoices for reimbursement. 

Page 68 GAO-10-223 Recovery Act
Appendix II: Department of Education 

Calculations to Determine Full-Time 

Equivalents (FTE) for Jobs Created or 

Retained 

Appendix II: Department of Education 

Calculations to Determine Full-Time Equivalents 

(FTE) for Jobs Created or Retained 

According to Education’s clarifying guidance on jobs estimation, local 

educational agencies (LEA) are generally required to calculate a baseline 

number of hours worked, consisting of a hypothetical number of hours 

that would have been worked in the absence of Recovery Act funds. Once 

LEA officials derive this number, they then deduct the number from actual 

hours worked by individuals whose employment is attributable to 

Recovery Act funding to determine the number of hours created or 

retained. They then derive the number of full-time equivalents (FTE) for 

jobs created or retained, as shown in table 10. 

Table 10: Derivation of Number of Hours Created or Retained 

Hypothetical: No

Recovery Act funding (baseline)

Actual: Current

quarter employees

Direct employees Employer Hours employed (estimates) Hours employed (actual)

Employee 1 Prime recipient 520 520

Employee 2 Grantee 300 520

Employee 3 Grantee 0 520

Employee 4 Grantee 300 300

Employee 5 Vendor 1 200 300

Employee 6 Vendor 2 0 300

Total 1320 2460

Hours Created or Retained: 1140

Source: U.S. Department of Education. 

Note: The data were taken from Education’s “Clarifying Guidance on American Recovery and 

Reinvestment Act of 2009 Reporting on Jobs Creation Estimates by Recipients” (September 2009). 

Then, they divide the resulting number of hours created or retained by the 

number of FTE hours in the quarter or reporting period to determine the 

number of FTEs to report. For example, in the table above, Employees 3 

and 6 went from being unemployed (0 hours of employment) in the 

hypothetical situation where no Recovery Act funds are available to fulltime (520 hours) and part-time (300 hours) employment, respectively. 

Employee 2 went from part-time (300 hours) to full-time (520 hours). 

Employee 5 remained a part-time employee, but works an additional 100 

hours in the reporting quarter. Taking the sum of actual hours worked in 

the reporting quarter (2460) and subtracting the hours worked in the 

hypothetical baseline quarter (1320), we are left with 1140 created or 

retained hours. For the first reporting quarter, LEA officials divided the 

Page 69 GAO-10-223 Recovery Act 
Appendix II: Department of Education 

Calculations to Determine Full-Time 

Equivalents (FTE) for Jobs Created or 

Retained 

result by the number of FTE hours in that quarter (520).1 The total FTEs 

created or retained in Quarter 1 is 2.19. 

Results should be reported cumulatively, so in the second reporting 

quarter (Q2), the total hours worked in Q2 will be added to the hours 

worked in Q1 and divided by the hours in a full-time schedule for two 

quarters (1040 hours). For example, if in quarter 2, all employees reported 

in quarter 1 are retained and the baseline remains unchanged, we would 

again have 1140 hours created or retained. To get the final cumulative 

FTE created or retained, officials would sum 1140 for quarter 1 with 1140 

for quarter 2 to get 2280 total hours created or retained. Recipients should 

divide this by the sum of the hours in a full-time schedule for those 

two quarters (1040). The result is again 2.19 FTE created or retained in 

quarter 2. 

 

1

The value of hours worked in a quarter may vary with the number of full-time hours 

worked since the beginning of the reporting period and what the recipient regards as a fulltime schedule. 

Page 70 GAO-10-223 Recovery Act
Appendix III: GAO

A

 Contacts and Staff 

cknowledgments 

Page 71 GAO-10-223 

Appendix III: GAO Contacts and Staff 

Acknowledgments 

J. Christopher Mihm or Susan Offutt at (202) 512-5500. 

The following staff contributed to this report: J. Christopher Mihm, Nancy 

Kingsbury, and Katherine Siggerud (Managing Directors); Susan Offutt 

(Chief Economist); Susan Irving, Yvonne Jones, Thomas McCool, and 

Mathew Scire (Directors); Angela Clowers (Acting Director); Robert J. 

Cramer (Associate General Counsel); Thomas Beall, James McTigue, Max 

Sawicky (Assistant Directors); Judith C. Kordahl (Analyst-in-Charge); and 

Jaime Allentuck, Darreisha Bates, Don Brown, Stephen Brown, Tina 

Cheng, Andrew Ching, Steven Cohen, Michael Derr, Robert Dinkelmeyer, 

Shannon Finnegan, Timothy Guinane, Philip Heleringer, Don Kiggins, 

Courtney LaFountain, John McGrail, Donna Miller, Elizabeth Morrison, 

Jason Palmer, Beverly Ross, Tim Schindler, Paul Schmidt, Jennifer 

Schwartz, Jonathan Stehle, Andrew J. Stephens, James Sweetman, and 

William Trancucci. The state teams for the bimonthly Recovery Act letter 

reports also contributed to this report. 

 Recovery Act 

GAO Contacts 

Staff 

Acknowledgments 

(450752) 
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