This is the second installment in a series of columns by Recovery Board Chairman Earl Devaney on the lessons he has learned from his work on the Recovery Board, which oversees the $787 billion Recovery program. The column originally appeared at Recovery.gov.
There’s nothing like a punch in the gut to get your attention.
In the first year of the Recovery program, after we began collecting spending data from recipients of economic stimulus funds for posting on Recovery.gov, I felt much like a prizefighter doubled over in pain.
More than 127,000 recipients submitted spending reports to FederalReporting.gov, our password-protected website used to collect the data. Most recipients did a good job, and the quality of the data was excellent. But some, quite frankly, submitted reports filled with errors while others refused to file a report, ignoring their obligation to taxpayers.
Most embarrassing, some recipients entered the wrong congressional district in their reports. All hell broke loose when we posted the data on Recovery.gov, as some reporters and bloggers assailed the Board for allowing taxpayer funds to disappear into “phantom” congressional districts.
The Board also decided that it would not put up with recipients who thumbed their noses at the legal requirement to submit reports. We published their identities on Recovery.gov-something referred to within the Board as the “Wall of Shame.”
Of course, no money actually disappeared. The recipients simply didn’t know what congressional districts they lived in and wrote down the wrong district number. That’s usually called a “clerical error.”
Equally troublesome, recipients failed to submit 4,359 spending reports. Bottom line: Taxpayers got no accounting whatsoever on how $583 million in Recovery funds was being spent.
This was no time for excuses, and the Board gave none. We were plainly embarrassed by the kerfuffle over the misreporting of congressional districts. We wasted no time fixing the problem with edit checks that wouldn’t permit recipients to enter the wrong congressional district in future spending reports.
The Board also decided that it would not put up with recipients who thumbed their noses at the legal requirement to submit reports. We published their identities on Recovery.gov-something referred to within the Board as the “Wall of Shame.” I also called on the federal agencies that distributed Recovery funds to step up their efforts against reporting scofflaws.
The pressure worked. We have a zero tolerance policy, and the number of non-reporting offenders is now down to a little more than 350. More important, the number of repeat offenders, which we describe as two-time and three-time non-reporters, is down to 17 and 7, respectively.
Although I have been in government for more than 40 years, I subscribe to the theory that old dogs can learn new tricks. In this case, I learned this important lesson: Transparency often causes embarrassment, which, in turn, causes self-correcting behavior.
I would make one final point. Congress and the Administration are working on plans to enhance transparency for all government spending and improve efforts to detect and prevent fraud. But no system for collecting and displaying data is foolproof. There will always be mistakes.