Colorado’s system for tracking and auditing federal funds is too archaic and understaffed to closely monitor billions in economic-stimulus dollars flowing into the state over the next two years, government officials acknowledge.
Worries over the state’s ability to supervise funds have sent Gov. Bill Ritter’s economic-recovery team to Washington in recent days to ask for funding help and guidance so they can lash together a new system and boost staffing to meet the first major reporting deadline in October.
Several states, federal officials say, are grappling with the unprecedented reporting and transparency requirements imposed by the American Recovery and Reinvestment Act designed to ensure the $787 billion streaming into federal, state and local agencies is not wasted.
They are required to follow the money, as well as the jobs it creates, and make that detail available to the public. But it’s unclear whether states such as Colorado can use stimulus money to add administrative staff and fund information upgrades to satisfy stimulus-law mandates.
Colorado’s challenges stem from a clunky 18-year-old database system to depleted staffs of auditors and procurement employees across numerous agencies, including local governments. Then there is the fact that the federal Office of Management and Budget still hasn’t issued guidance on all the states’ requirements under ARRA.
“What you have with this stimulus program is that it’s huge, fast and new,” said Don Elliman, who directs the state’s stimulus-fund tracking efforts. “These factors don’t play well together in the sandbox. But I’m confident we’ll make our deadlines. The accounting is a problem, but we’re going to find our way around it.”
Not all agencies linked in
Though the costs and staffing needs statewide are still unclear, state officials are rushing to put together a separate accounting system designed to track dollars entering Colorado — whether it’s money flowing directly from the federal government to a local federal office or federal funds going straight to local governments.
The bulk of the state’s $3 billion-plus share will flow directly to the state government, but as much as $500 million could bypass it. Elliman said his Colorado Economic Recovery and Accountability office must find a way to document those revenue streams too.
Not even all state agencies — such as higher education — are linked into the state’s existing accounting database. Many manually compile their own expense information. But to effectively track the money, the data must be centralized. It would take tens of millions of dollars, Elliman and others say, to replace the state’s accounting system. So state officials are exploring a separate, less expensive computerized effort that can provide uniform collection solely of ARRA funds.
The current system is “old and limited,” said state auditor Sally Symanski. “There’s not a lot of flexibility. One limitation is job creation. You can’t track jobs in it,” as required by ARRA.
In the meantime, severe state budget constraints have led to the nixing of staff auditors and procurement officials in several agencies, including the Department of Personnel and Administration, which manages most of the state’s contracts.
Glaring “omission”
While the stimulus law clearly provided funding for tracking federal agencies’ handling of stimulus money, it didn’t do the same for state and local monitoring.
Elliman and other state officials hope that Congress plugs that hole and also frees up stimulus money to improve data collection. U.S. Rep. Edolphus Towns, D-N.Y., is taking up the cause and has proposed legislation that would do just that by modifying ARRA.
“Not initially providing funds for state auditors under the recovery act was an omission that needs to be rectified,” Towns said in a news release.
Officials with Elliman’s office say they’re confident they have plenty of time to sort through the problems and clarify what they can do before the October deadline.
The way he sees it, there’s no choice but to find a way. The economy depends on it.
Says Elliman: “After two years, we want to be able to say we did everything right.”
