Worries arise about quality of U.S. stimulus data

WASHINGTON Wed Sep 23, 2009 4:52pm EDT

President Barack Obama speaks about the post - 9/11 GI Bill alongside Vice President Joe Biden at George Mason University in Virginia, August 3, 2009. REUTERS/Jason Reed

President Barack Obama speaks about the post - 9/11 GI Bill alongside Vice President Joe Biden at George Mason University in Virginia, August 3, 2009.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - U.S. President Barack Obama's pledge to flood Americans with information about economic stimulus spending could misfire, the independent Congressional auditor said on Wednesday.

The volume of information required for a report due next month may be creating problems with the quality of data, the Government Accountability Office said in a special report.

"This unprecedented level of detailed information to be reported by a large number of recipients into a new centralized reporting system raises possible risk for the quality and reliability of these data," said the report.

Vice President Joe Biden, whom Obama asked to spearhead the implementation of the recovery act, said the administration appreciated the GAO's recommendations for improving the information collection.

"I am also stressing to agencies the importance of responding to the GAO's other recommendations for improvements in execution and oversight of this highly complex effort," he said.

The size of the American Recovery and Reinvestment Act -- $787 billion -- is unprecedented, as is the amount of oversight of the package of spending measures and tax cuts.

Alongside the GAO and Congress's frequent audits, a bevy of agency and state Web sites track spending, while a special panel and various agencies keep watch for fraud.

The Office of Management and Budget is collecting information on where exactly the money goes, including which vendors are hired for projects and when agencies received grants, in a special database. Those details will be compiled in a report to be released on October 31.

About $276 billion worth of projects from the two-year plan will be tracked. The first report will lay out details for about $143 billion worth of projects, according to the OMB.

"What the GAO is saying is that this is risky because this has never been done before. We have acknowledged that," said OMB Deputy Director Robert Nabors.

The GAO also found there is insufficient federal review of the data to ensure its quality. But Ed DeSeve, the former Philadelphia finance director brought on to help with the stimulus, said the administration has put in place "as many risk management techniques as any of us could think of."

"We will also be in force over the roughly 20 days between the arrival of the reports and their posting -- we will be in force to look at them, to examine them, along with the GAO and others," he said.

The reporting process started in August, when recipients registered to upload data onto a special website.

One bone of contention has been how to check Obama's claim that the plan will "create or save" 3.5 million jobs. While the White House Council of Economic Advisers relied on projections to say earlier this month that it has already created 600,000 jobs, the OMB will use a direct count from the recipients.

Other problems identified by the GAO include states, which provide a large portion of the data, not being reimbursed by the federal government at a rate that covers the costs of collecting and reporting it.

"These additional costs can exacerbate states' existing fiscal stress," said the report.

The Treasury Department has outlaid $48 billion of the estimated $49 billion included in the stimulus for states and localities this fiscal year, according to the GAO.

More than three-quarters of that money has come through increases in help for Medicaid, the healthcare program for the poor, and a fiscal stabilization fund administered through the Education Department.

(Reporting by Lisa Lambert and Ross Colvin, Editing by Chizu Nomiyama)

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