Last week the Senate Homeland Security and Governmental Affairs Committee held a hearing entitled "Follow the Money: State and Local Oversight of Stimulus Funding." The hearing consisted of a single panel of three witnesses:

In his opening remarks, Committee Chairman Joe Lieberman (I-Conn.) voiced concern that cash strapped states may be forced to lay off the individuals who would normally oversee stimulus spending. Citing a letter sent by Vice President Joe Biden, Chairman Lieberman expressed his strong support for efforts by both Congress and the Administration to ensure thorough oversight of stimulus funds.

Mr. Dodaro, the Acting Comptroller General of the U.S. Government Accountability Office, testified just days after the release of the GAO’s report on the implementation of the stimulus programs, the first in what will be bi-monthly reports on stimulus oversight. Mr. Dodaro stated that many of the state officials interviewed in connection to the report voiced concerns similar to those of Chairman Lieberman and Vice President Biden with regard to funding for oversight personnel. Mr. Dodaro also provided three policy recommendations for the Director of the Office of Management and Budget:

  • Adjust the single audit process to provide for review of the design of internal controls during 2009 over programs to receive ARRA funding, before significant expenditures in 2010.
  • Continue efforts to identify methodologies that can be used to determine jobs created and retained from projects funded by ARRA.
  • Evaluate current requirements to determine whether sufficient, reliable and timely information is being collected before adding further data collection requirements.

Mr. Scheppach provided four specific recommendations for coordination between the federal and state governments:

  • Congress and the Administration should coordinate and streamline reporting requirements and oversight avoiding duplicative or unnecessary reporting requirements by sharing information and developing common definitions to make state reporting easier and more usable.
  • Federal Inspectors General should acknowledge that flexibility is necessary to allow states to develop and improve states systems and capabilities to meet ARRA transparency and accountability standards.
  • Congress and the Administration should allow time for planning to ensure that states have the flexibility to organize and plan after federal rules are finalized to ensure proper handling and priority setting at the state level.
  • Federal officials should ensure that each governor’s office is kept informed of all federal spending and activities that occur in a state as ARRA provides states and governors with central responsibility for using and administering federal recovery funds.

Ms. Coleman detailed current efforts by local governments to ensure transparency and full disclosure in their use of stimulus funds. She specifically cited the cities of Reno, Nevada and New York City as being particularly good examples local governments attempting to provide unprecedented detail and transparency. Finally, Ms. Coleman gave reiterated the view of that state and local governments require greater resources to ensure that there is adequate manpower to perform oversight efforts required in ARRA.