A day of reckoning is quickly approaching for state and local governments that have received money from the federal American Recovery and Reinvestment Act - the stimulus package that some lawmakers and economists hope will help sweeten the nation's sour economy.
Budget officials are bracing for Oct. 10, the first quarterly deadline mandated by the U.S. Office of Management and Budget (OMB) for stimulus fund recipients to upload detailed financial data to a new Web site called FederalReporting.gov.
Video: State and local CIOs describe the challenges of reporting on stimulus spending.
For the sake of transparency and accountability, President Barack Obama's administration and the OMB instituted what they say are the most stringent reporting requirements of any government grant-making process in history. Agencies will be required by the OMB to upload expenditure data - via an Excel spreadsheet or Extensible Markup Language (XML) - pertaining to subrecipients, subgrantees and subcontracts. Grants administrators say that extra level of detail will make accounting more complex.
Those requirements will put the onus on state and local governments to deliver an unprecedented amount of financial record keeping and reporting, and some agencies' computer systems likely are ill prepared to cope. Governments find themselves with a choice: purchase software that's built specifically for the stimulus, or forge ahead with enterprise software they already own.
"These dollars are going to be watched closer than any federal dollar that has ever come out of the Treasury," said Dave Quam, the director of federal relations for the National Governors Association. "We're talking Congress, reporters, states, locals - everyone is going to be watching this money. You might be able to know exactly where your tax dollar went at the end of the day. That's pretty remarkable considering where we are right now."
Photo: Dave Quam, director of federal relations, National Governors Association
But challenges are ahead. States will be asked to do more than they've ever done before, Quam said. And the same burden of transparency and detailed record keeping has also been placed on local governments.
Rich Robinson, the chief operating officer of San Francisco's Department of Technology, said when he read the first draft of the stimulus package's reporting requirements, he quickly realized it would take 18 to 24 months for his IT department to build an in-house reporting application - much too long.
"I initially saw a significant gap," Robinson said. "The reason was because the local governments - being a city or county, you have lots of different agencies: public health, public transportation, law enforcement - all to some extent do their own thing on project management and financial accounting."
Robinson said he knew the 65 departments in the consolidated city-county government would have to be on the same page for stimulus reporting, because at least $500 million is estimated to be awarded to San Francisco. He decided the best choice for doing that was Microsoft's Stimulus360 - a solution built atop existing software that many governments already own: Office, SharePoint and Microsoft Dynamics; SQL Server, Virtual Earth and BizTalk are optional add-ons. Stimulus360 has been deployed in San Francisco's controller's office, the mayor's office and will soon be used by the auditor's office, Robinson said.
Robinson believes San Francisco's stimulus projects will be under even more scrutiny than elsewhere because of the city's large community of activists. Therefore, he said it was important to get out in front of the reporting issue. But he said some of his peers in other large cities are probably falling behind.
"Chicago seems to be understanding, and Washington, D.C., and the state of Tennessee. I think there are a couple of others. I think San Francisco and those cities are ahead in understanding the problem is fairly significant," Robinson said. "What we don't want to happen, and I think the Obama administration is kind of showing its cards a little bit in saying, 'We're going to crack down if you can't meet the needs.'"
Grants management has been a longtime bugaboo for municipalities like San Francisco and Chicago - even before the stimulus arrived on scene. But the Recovery Act added urgency. In an April white paper, Gartner called the $787 billion that will be disbursed by the economic recovery package "one more good reason" for local governments to modernize their grantee management tools.
"If you walk into these [state and local] grants coordinators' offices, they all do this on Excel, Access database or Word. They're doing it today - it's not like they're not doing it," said Craig Peting, the senior technology consultant for CA, which also has released a stimulus tracking solution. "It's just now the key factor is that the reporting is going to crush them, and also the auditing. I've been in 14 of the 16 states personally that are getting bimonthly GAO [Government Accountability Office] audits, and have talked to those people - plus I've been to 12 other states. They're all starting to realize this is not going away."
States received some budgetary help in May when OMB Director Peter Orszag sent a memo to agency and department heads allowing them to spend 0.5 percent of their total Recovery Act funds on administrative costs. This includes the deployment of software to track stimulus dollars.
With demand for hardware and software stalled in general by the recession, a growing number of technology vendors - Microsoft, CA, IBM, SAP, Acumen Solutions and others - hope that selling software tailored to the stimulus will provide them with some economic stimulus of their own.
For example, CA's Grants Manager On Demand includes year-to-year comparisons, computation of personnel time used on each grant, and reporting capability. The solution can assemble a project plan for applying to a grant, manage the financials when the grant is awarded, and map projects on a geospatial dashboard. The new on-demand version of CA's product launched in July is entirely Web-based, so it's able to feed data in HTML or XML to public-facing Web sites - including the many "transparency" portals that states and cities have built recently in response to Obama's call for transparency.
Meanwhile, Microsoft's selling point for Stimulus360 is that it's built with software parts that many organizations already own, so the only additional cost is a modest licensing fee. It's a collaborative workspace remixed into a brand-new intellectual property, said Stuart McKee, the national technology officer of U.S. public sector for Microsoft. He is also former CIO of Washington state.
Photo: Stuart McKee, national technology officer of U.S. public sector, Microsoft
Other software vendors are taking a different approach. Acumen Solutions' START program - Stimulus Tracking and Recipient Transparency - is built on the increasingly popular Salesforce.com platform, so it's a hosted solution.
Greg Sanders, senior manager of public-sector services for Acumen Solutions, said the application's advantage is that because it's a "cloud" solution, it's easily updatable with the most recent grant information released by federal agencies, as well as reporting and accounting regulations from the OMB.
"We watch OMB, and we make sure that our application interfaces with OMB properly so that the state and local governments ... don't have to worry about that. They just get the data into the application, we keep the application lined up with OMB and keep it running for them," Sanders said.
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