Resonations from the Recovery Act: Accenture identifies trends in post-stimulus state and local government

The $787 billion funding streams created as part of the American Recovery and Reinvestment Act passed in 2009 will end in 2012. Accenture’s Mark Howard discusses what programs and practices will last far beyond the two-year ARRA life cycle.

From transparency measures to econometric forecasting, federal reporting mandates and increased grants competition has ushered a new era for state and local government management.

“ARRA is not a one-and-done event,” Mr. Howard, ARRA Practice Director for Accenture, said in an interview with CivSource. “We believe the use of ARRA funds has created expectations among citizens, elected officials, and media about how government should conduct business.”

The question, Mr. Howard says, is how best to apply federal requirements under the stimulus package more broadly to address organizational improvements and increased transparency.

According to a report based on conversations with state comptrollers, stimulus directors, and financial experts around the country, Accenture has outlined four areas of opportunity to move beyond ARRA reporting compliance and provide long-term value.

The distribution of and access to information about government projects, using websites has already taken seed in all fifty states, with many of those websites making improvements in user interfaces. According to a report released last week, state transparency websites continue to increase the quality and quantity of stimulus projects information, utilizing geospatial tools to indicate project details like dollar amount, recipient name, status and the text of the contract or grant awarded.

Web-based reporting and project tracking is likely to be the most obvious continuing practice of state and local government after ARRA is done. But according to Howard, most states’ reporting processes have room for improvement. During the second round of quarterly reporting (Jan 1 – Jan 10), the Office of Management and Budget (OMB) extended the reporting deadline by ten days to address inconsistencies and formatting issues.

“Most officials are still trying to keep their heads above water,” Howard said. “In general the second time around was better than the first – people were more comfortable with the standards and expectations of how and where they were supposed to report. It was easier, but not across the board easy.”

Mr. Howard believes there is an opportunity for the private sector to help states maintain these transparency websites after the stimulus well has dried up. “Are states going to get into the business of gathering data, preparing, validating and publishing it to the web,” he asked, “Probably not.”

Most states just don’t have that job title and competency built in to their existing organizations, Howard said. Instead, states are likely to outsource the job to keep citizens and watchdogs happy, while vendors develop technologies and processes that make the task easier and cheaper for the taxpayers. Presently, there are a host of companies including Microsoft, Unisys, Actuate, IBM and others who have developed solutions meant to streamline the tracking, managing and reporting process for stimulus-related projects.

This continued surveillance of government projects via transparency websites, even after the last Recovery dollar has been spent will likely manifest itself in two other areas of related opportunities, Howard says, outcome reporting, or “scorecarding”, and economic forecasting.

“The amount of information created by ARRA is staggering. Right now, the only real value delivered metric that is required by the government is based on the number of jobs created or saved. We believe that is going to change.”

Soon governments will be able to track performance measurements to figure out improved traffic flow, improved public safety, increased educational opportunities and improved healthcare. “There’s going to be a growing emphasis on what we can actually accomplish by spending those dollars,” Howard said. At the same time, economic forecasting, used at the beginning of budget cycles to estimate the future condition of the economy, will become more accurate and inexpensive. Howard said this would be possible because specific projects and spending data is available at a granular level. In the past, most econometric models were dependent on statewide figures.

Not only will there be a greater number of economic impact reports, based on reports from the last few years, officials will be able to see where they are likely to get the biggest bang for their buck in next year’s spending, Howard indicated.

Last, but certainly not least, is the answer to a $250 billion dollar question. Under the Recovery Act, over $250 billion has been given to state and local organizations through federal competitive grants. And according to a joint survey between Accenture and the National Association of State Auditors, Comptrollers and Treasurers (NASACT), high-level competition for grants is here to stay. Being able to submit the most comprehensive grant application possible is something a lot of state and local governments have had practice doing with the stimulus package. Though no state has formally adopted a centralized grants management strategy, Howard said.

“Most states coordinate grants through luck and connections, not through conscious strategy.”

Still, there remains an incredible amount of opportunity – for government to improve accountability and service delivery – and for the private sector to tap newly formed revenue streams.

The Recovery Act money will stop flowing in 2012, but the business of government and its associated transparency challenges promise to stay far beyond that timeline.

“At a minimum, that level of transparency [created by ARRA] will be the norm,” Howard concluded.

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