Recovery Act Recipients Fail to File Reports for Millions in Stimulus Funding

May 1, 2012
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Non-compliant recpients by state

DENVER—Failure to file a timely quarterly report has landed several Colorado organizations receiving stimulus funding on the list of non-compliant prime recipients, according to a report from Recovery.gov.

The Office of Management and Budget, reviewing lists provided by the federal agencies distributing the stimulus funds shows that, over the past 30 months, dozens of recipients in the state of Colorado—including the University of Colorado at Boulder and cities like Greeley—failed to file a quarterly report, as required by Section 1512 of the Recovery Act.

Four recipients in Colorado with awards totaling nearly $1 million failed to file a report for the fourth quarter of 2011.

As many as 21 recipients in Colorado failed to file a report in the third quarter of 2010, Recovery.org records show.

And at least two other recipients listed in the most recent quarter available, with loans totaling nearly $3.8 million from the Department of Housing and Urban Development, were actually for projects located in Illinois, but misattributed to Colorado.

In a blog post entitled “Shaming the Scofflaws” from March 28, 2012, Recovery Board Executive Director Michael Wood writes about attempts to reign in non-compliant recipients through the publishing of quarterly lists that became known as the “Wall of Shame”:

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

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

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

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

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

Wood believes that the effort has worked, as the number of non-compliant recipients declined to 418 by the fourth quarter of 2011.

As for the excuses offered, Wood describes a variety of exculpatory reasoning:

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

Early failures, however, prompted President Barack Obama to issue a memorandum on April 6, 2010, to aid in “combating noncompliance”:

My Administration is committed to transparency in tracking recovery dollars and to elimination of waste, fraud, and abuse by recipients of hard-earned taxpayer dollars. Executive departments and agencies (agencies) should use every means available to: (1) identify every prime recipient under an obligation to file a report on FederalReporting.gov arising from its receipt of American Reinvestment and Recovery Act of 2009 (Recovery Act) funds; and (2) to ensure that every such recipient has filed a report. Any prime recipient that has failed to report is not living up to the standards set by my Administration and must be held accountable by all agencies to the fullest extent permitted by law. Our efforts to ensure timely, comprehensive, and accurate recipient reporting must succeed if we are to effectively meet the transparency and accountability objectives of the Recovery Act.

The Obama administration called for punitive measures including, but not limited to award termination, suspension, or fund reclamation.

For the most recent reporting period ending December 31, 2011, four awards issued to four recipients garnered a failure to report designation in the state of Colorado, with awards totaling a cumulative $989,674.

A total of $4,857,942 in non-compliant awards was attributed to Colorado, including a pair of loan and grant packages totaling $3,868,268 awarded by HUD to organizations in Illinois.

It is unclear how many of the remaining four hundred awards with non-compliant reports were similarly misattributed to incorrect states.

Of the awards actually located in Colorado, a grant made by the National Science Foundation to the University of Colorado at Boulder for $500,000, showed two consecutive missed reporting periods. The original grant description placed a primary focus on research covering flowering plants and seed development, but also emphasized the need for recruitment of “underrepresented groups” in the field of science.

Other non-compliant recipients (4th quarter 2011):

*Cañon City, a recipient of a $100,654 grant for improvements to communication between local law enforcement from the Department of Justice also failed to report during the final quarter of 2011.

*The Center for Independence, located in Grand Junction, received a $310,895 grant for disability advocacy through the Department of Education.

*Colorado Coalition Against Sexual Assault received $78,125 from the Department of Justice for a redesign of the organization’s publications and a new website. The last filing indicated that the project had been “completed.”

Recipients of Recovery Act funding under $25,000 are not required to report for those awards.

This post was written by

Michael Sandoval – who has written posts on The Colorado Observer.

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