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Wednesday, October 6, 2010

$162 million in stimulus funds not disclosed

WASHINGTON — Recovery.gov promised transparency on how the government spends every dollar of stimulus money, but there's $162 million the website doesn't disclose.
Recipients of 352 federal stimulus contracts, grants and loans have failed to report how they spent the money, the status of their projects or how many jobs were funded, according to the Office of Management and Budget (OMB).
Despite orders from the White House to crack down, enforcement is spotty.
The reports are important because they provide the most detailed disclosures of government spending, and are the keystone of government transparency efforts. Last Friday, the beginning of a new fiscal year, OMB expanded the use of recipient reporting, requiring it for the first time on non-stimulus spending.
OMB controller Danny Werfel said those 352 are less than 1% of the more than 88,000 stimulus projects required to report — a big improvement over a year ago, when reporting started and about 8% of recipients didn't file.
But as compliance goes up, repeat offenders stand out. As of the last report, 32 recipients have missed two consecutive quarterly reports —and eight have missed three. They account for $7.4 million in awards.
"Once you get to a second instance, you're sensing more of a pattern," Werfel said. "It's no longer a miscue or disconnect."
In May, then-OMB director Peter Orszag instructed agencies to take action against repeat offenders within 20 days. That action could include investigations for fraud and suspensions from all future federal contracts.
It's unclear whether that's happening.
Werfel would not release OMB enforcement reports. But a USA TODAY review of debarment actions — companies excluded from receiving federal contracts — found only one non-reporting recipient suspended.
That company, International Trading CCT LLC of Livonia, Mich., wasn't suspended by the U.S. Department of Agriculture, which gave it $442,096 in stimulus money to rent equipment in Huron-Manistee National Forests in Michigan.
It was the Defense Logistics Agency that suspended the company, accusing it of delivering substandard construction materials for Bagram Air Force Base in Afghanistan and then forging documents to cover it up. The company owes the Defense Department $305,256, according to an agency memo.
The company's phone is disconnected.
A USA TODAY analysis of missing reports shows the Department of Agriculture has the biggest problem: 100 recipients receiving $103 million have failed to submit reports.
Agriculture spokeswoman Stephanie Chan said 98% of recipients have reported. For those who haven't, the department "has worked aggressively on a case-by-case basis to achieve compliance."
One recipient, a Fort Morgan, Colo., ranch that received $56,286 for irrigation improvements and has missed three quarterly reporting deadlines, has received little more than form letters. Ranches Inc. has received three reminder letters from USDA's Natural Resources Conservation Service, according to documents obtained under the Freedom of Information Act.
Earl Devaney, chairman of the agency that runs Recovery.gov, told Congress last year he supports even harsher penalties for not reporting — something Congress didn't do in the Recovery Act. "Even if criminal penalties are not practical, the fact that some would willfully not file is distressing and must be addressed," he said.


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