Virginia Tech

In 2009, the American Recovery and Reinvestment Act provided a one-time boost in spending to state and local govern­ments of more than $275 billion which was distributed via 65 different new or existing federal programs. These funds were accompanied by a new, centralized system of strict financial accountability and perfor­mance reporting, with frequent reporting requirements. These new requirements, as well as the rapid implementation time­frame required by the Recovery Act, created an enormous implementation challenge for all the participants in our federal-state-local-non­profit intergovernmental system. While the Recovery Act is a temporary program, its implemen­tation and its centralized requirements may have potential long-term implications. The authors examined the implementation of the Act in three localities in Virginia: Alexandria, Blacksburg, and Richmond. Specifically, the authors examined the impact of the speed at which the localities imple­mented their funding; how they addressed increased information demands and increased frequency of reporting; how they used risk management as a strategic lens in their decision-making; and how they increased their collaborative efforts with both state and federal partners. Based on an analysis of the implementation of Recovery Act grants in Virginia, the report offers a series of rec­ommendations to improve the federal grants process in the future. The authors conclude that the approach used to implement the Recovery Act may also serve as a new benchmark for rapid informa­tion sharing. In fact, Congress seems pleased enough with the data collection approaches used in the Recovery Act to be con­sidering expanding the same type of reporting requirements to all federal spending.