ARRA Implementation
What Worked, What Didn’t, &
What’s Next
Colorado State Controller
David McDermott, CPA
What Worked
• Overall a phenomenal accomplishment
– Nationwide implementation
– Never before attempted
– Seven months from signing to reporting
– No dollars at the state level
– Wide range of technical expertise
– Significant language and knowledge barriers
– Delivered on time without much acrimony
What Worked
• People involved
– Competent, committed, and altruistic
– Willingness to suppress egos (and tempers)
• Open and ongoing communication
• Change to a batch submission process
• Frequently Asked Questions format for
guidance promulgation
– Allowing recipient input to questions and
answer content
What Worked
• National organizations collectively
interacting with OMB, RATB, and GAO
– Friday morning calls – NGA, NASACT,
NASBO, NASCIO, etc.
– NASACT/DCA/OMB on the Supplemental
SWCAP
• OMB and RATB willingness to work with
Federal agencies on a “single voice”
What Worked
• Application Support at RATB
– Responsive
– Well informed
– Creative
– Consistent
• Help desk
– Managed high volume effectively
– Generally pleasant and helpful
– Appropriately raised issues for Federal management
consideration
What Worked (for Colorado)
• Policies on:
– Aligning the definition of internal transactions
with GASB 14 & financial accounting/reporting
– Accounting systems flags for reportable vs.
nonreportable and pass through vs. external
spending
– Prohibition against delegating reporting to
subrecipients or being delegated reporting
responsibility by another prime recipient
– Centralized reporting
What Didn’t Work
• Late changes to basic design elements:
– Multiple versions and significant changes to
the data model
– Database structure, and data base hierarchy
never clearly defined
• Multiple CFDA numbers per grant award ID
• DUNNS number and Award ID as a key data
elements
– one validated but not the other,
– not communicated until changes to Award ID’s became
late submissions
What Didn’t Work
• Requiring recipients to provide information
they didn’t know:
– Treasury Account Symbols used exclusively
at the federal level and unfamiliar to most
recipients
– Distinction between funding and awarding
agency should be known by the Federal
government, but may not be apparent to
recipient
What Didn’t Work
• The Tower of Babel:
– Undefined terminology
– Use of terms with audience specific meanings
• Agency
• Obligation – spent when obligated vs encumbered
– Cryptic file submission error codes
What Didn’t Work
• Multiple Masters:
– Inconsistent directives from OMB and Federal
agencies
• Reporting path
– Direct to FederalReporting.gov vs. direct to Federal agency
– State =>FHWA=>State=>FederalReporting.gov
• Reporting level
– Award ID
– Project
– Jobs count
• Specific identification formula vs. program specific
methodologies
What Didn’t Work
• Lack of time for training:
– Federal level:
• Communicating when OMB requirements would rule and
when Federal agency would have discretion
• Standardizing and streamlining the review process
– State level:
• Difficulty in identifying the right people – accountants,
purchasing, grants/program staff, and POC
• Changing requirements - increases confusion if training
cannot be ongoing
• Resource limitations
What Didn’t Work
• Oversight cost recovery:
– Basic flaw in the Act
– S-SWCAP remedy less than satisfying
• Unnecessarily time consuming and resource
intensive for both DCA and recipients
• Highly dependent on estimates where no valid
estimation methodology exists
• No workable provision for recovery from grants
already expended or those prohibiting oversight
costs
• Requires ongoing adjustment to actual
What Didn’t Work
• Initial design of FederalReporting.gov and
related access controls:
– Design focused on individual submissions
– Ignored the potential for high volume and
state’s need for centralized accumulation of
data and reporting
– Access Controls - Potential for disabling
state’s centralized recipient reporting
– Remedy drove batch submission process –
an impressive comeback late in the game
What Didn’t Work
• Jobs count
– Objective conceptually flawed (not the implementation)
– OMB calculation directives worked only for
jobs specifically identifiable
– Job retention – the magic “what if” scenario
• Indefinable in year one – FTE cuts are not
budgeted by position - management discretion
allowed
• Worse in years two and three – budgets don’t
project FTE cuts this far out
What Didn’t Work
• Federal agency review process
– System processes and controls not described
or communicated
– Training by trial and error
– Both sides overloaded by the volume
– Programmed exception reporting such as jobs
count “outside of parameters”
– No appeals process to address Federal
agencies requiring data change requests that
states believed to be inappropriate
What’s Next
• Recovery from the Recovery
– Many states made ARRA a priority – they’re
still catching up on their “normal” job
– States have requested a change hiatus at
least until April, 2010
• Recipients need to evaluate internal
systems and redesign weaknesses
• Time needed to automate systems where
ad hoc manual processes were used
What’s Next
• States may need to reconsider centralized vs.
decentralized reporting and the benefits of a
hybrid approach
– Central office overload
– Time commitment cannot be duplicated at fiscal year
end
• All parties should work on “many masters” and
“single voice” problem
• Solidify a consistent definition of internal versus
external transactions considering the effect on
“subrecipient” reporting
What’s New
• NGA, NASACT, NASBO recommend no
changes for January, except better jobs
guidance.
• OMB actions:
– Step by step jobs guidance
– Jobs spreadsheet calculator
– Fed agency ARRA guidance peer review process
– New guidance due the week of December 4 (by the 18th?)
– No plan to centralize guidance in one site
– Memo to Fed grantors on chronic nonreporters
– Focus turning to accountability and improper
payments
What’s New
• RATB actions:
– Enhancements to FR.gov (as time permits)
– No new fields
– New internal audit or data edit checks:
• Hard edit on Congressional districts validity
• Soft edit on Zip +4 for Congressional district
• Soft edit on jobs vs. dollars alignment
• Infrastructure soft edit on Expenditures > Award
• Reject Fed funding/awarding agencies that are not
grantors
What’s New
• RATB actions:
– Other changes:
• Quality Assurance continues after the 30th
• Working w/ OMB on W2 type grant notification for
TAS, Funding Agcy, Granting Agency, etc.
• Version control on FR.gov database, copy function
from previous to current version
• No decision yet on extended submission period
– Concern about locals reporting capacity and
knowledge