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State agencies over-reported stimulus jobs, audit finds

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A report released yesterday by the California Bureau of State Audits found that state agencies and their sub-recipients are not accurately reporting federally funded Recovery Act jobs.

According to recovery.gov, California has received $12.8 billion in stimulus funds and reported over 54,000 jobs since the American Recovery and Reinvestment Act was enacted in February of 2009. But yesterday’s audit report, which analyzed jobs data from five state agencies, found that those agencies overreported the number of full-time jobs created by 617.

In a letter to the governor and legislators, included in the report, State Auditor Elaine Howle wrote that although federal and state offices give explicit guidance on how to calculate jobs data each quarter – as mandated by the Recovery Act – “state agencies do not always report their jobs data accurately.”

The five main agencies reviewed were the Water Resources Control Board, the Department of Community Services and Development, the Department of Transportation, and the Tax Credit Allocation Committee, along with sub-recipients that in turn got from funding from these agencies.

In 2009, the Bureau of Audits identified the application of the Recovery Act in California as a high-risk issue, with potential for waste, fraud, abuse and mismanagement, according to the report. Gov. Schwarzenegger created the California Recovery Task Force to track federal funding coming into the state. In the past year, federal and state agencies have reviewed the 12 highest jobs-producing programs and have consistently found errors in how they've reported jobs data.

According to yesterday's state auditor's report, titled "The California Recovery Task Force and State Agencies Could Do More to Ensure the Accurate Reporting of Recovery Act Jobs":

  • The Water Resources Board reported triple the number of jobs created and retained by adding them up on a monthly basis, rather than at the end of a quarter, resulting in an overstatement of 71 full-time positions.
  • The Water Resources Board calculated its jobs data using the wrong months.
  • The Water Resources Board, the Department of Transportation and the Department of Community Services and Development did not include paid time off in the total number of hours that Recovery employees worked.  
  • The Tax Credit Allocation Committee tripled the number of actual jobs reported by its sub-recipients by adding together data from a three month period and failing to divide by three to adjust for the quarterly calculation. The mistake resulted in an overstatement of 545 jobs for the quarter.
  • All of the state agencies analyzed the reasonableness of their sub-recipients’ data, but only one agency reviewed the sub-recipients’ jobs data calculation methodology.

The Bureau of State Audits recommended that the Recovery Task Force provide technical assistance and training to state agencies to make sure jobs are not triple-counted, estimates are reported for the correct months, agencies fix inaccurate numbers during the correction period, and include paid time off in their estimates. It also recommended the Recovery Task Force review state agencies’ methods of calculating their jobs data.   

In a Dec. 6 response letter, included in the report, Richard Rice, the director of the California Recovery Task Force, said the task force plans to implement the bureau’s recommendations immediately. But he said that the task force has limited power to enforce rules on two departments – the Education Department and the Tax Credit Allocation Committee.

Rice said that the task force relies on departments and their staff to verify the accuracy of their own jobs numbers, and that the task force has "limited visibility into how many awards are attributed to each subrecipient."

Rice expressed frustration with the way the federal guidelines for reporting jobs data changed ten months into the program. Some of those guidelines included the shift to reporting jobs data on a quarterly basis – changes he said created confusion among recipients of Recovery Act funds.




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