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.

Getting Out in Front

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