Michigan Stimulus Recipients Failing to Report – Part 2

The July 30 reporting deadline is quickly approaching for those who received money from the federal American Recovery and Reinvestment Act of 2009 (ARRA) program to tell government how they used their stimulus money in the second quarter of 2010. Those who don't properly do so end up on a "non-reporter" list. That's what happened to more than two dozen Michigan companies, colleges and agencies which failed to tell the government how they used nearly $59 million over the past two reporting periods. (fourth quarter 2009 and first quarter 2010.)

The Mackinac Center tried to contact representatives of all of the non-reporting agencies and companies. Of those who responded, some were unaware of the list's existence. Those who were aware gave different reasons for ending up on it.

Michigan's largest unreported amount was in the first quarter of this year; a $41 million law enforcement grant to the Michigan Department of Drug Control Policy. A governor's executive order called for the award recipient to change names and state agencies in 2009. (see details in a previous report in Michigan Capitol Confidential).

This may have led to some confusion over award numbers, according to Ed Pound, Director of communications for the Recovery Accountability and Transparency Board, which oversees Recovery.gov. Pound told the Mackinac Center his data team is working to trace the exact source of the error. "We (at Recovery.gov) don't generate the non-reporter list. We get it from the Office of Budget and Management." Pound added that department shifting in Michigan government isn't an excuse, "It doesn't matter to us that the Governor moved an office. We require a report to be filed."

Other reasons for landing on the government's stimulus non-reporter list:

*Recipient declined the award. The Department of Justice awarded $211,120 to the Kalkaska Police Department, which Kalkaska police turned down. A Kalkaska police department spokeswoman told the Mackinac Center that the decision to decline the award was based on the stimulus requirement of "matching funds in local governments." She cited the current economic situation in Michigan as making it difficult to pay for existing services saying, "Everybody's taking hits."

*Awards granted to Michigan companies for work performed in other states. Kline Multiproducts of Lichtfield, MI received $47,908 for an Army Corps of Engineers project in Kentucky. As explained in the First Quarter 2010 data for Kentucky, this award was "In Support of the Corp. of Engineers operations and maintenance program provide a day use shelter at Rough River Lake, Falls of Rough, KY." While this award was properly reported in Kentucky, the company was listed as a "Significant Non-Complier" in Michigan for not reporting the use of stimulus money in Third and Fourth Quarters of 2009.

Representatives of Kline Multiproducts have not returned phone calls or e-mails. However, Pound said if a Michigan-based company subcontracts a project in another state, both are to report in their respective states. "It doesn't matter where the work was done," Pound said. "It's who receives the money."

It's a similar out-of-state story for Heartland American Products, which has twice been listed as not reporting $3,060.68 for four picnic tables in Dillon, Ohio. This project was also awarded by the Army Corps of Engineers. 

* Bay De Noc Community College in the Upper Peninsula also got the "Significant Non-Complier" designation. According to Recovery.gov, the college twice failed to report a $30,820 Department of Education Federal Work-study grant. A scan of the recovery data does find, however, that the award was correctly reported in the First Quarter of 2010.  A college spokesperson was not aware of the list and had not heard from government officials about the on-reporter listing.

*A $63,588 federal work-study award also went to Mott Community College in Flint. The award was listed as unreported in fourth quarter 2009. However, the college did report this award in the following reporting period. A Mott official told the Mackinac Center, "The reporting deadlines and requirements were unclear and changed several times resulting in a late report."

Other recipients who landed on the non-reporter list, but later correctly reported their awards include Lake Superior State University ($47,495), Coy Laboratory products ($10,431), Northern Economic Initiatives Corp. ($750,000), the Brownfield Redevelopment Authority of Jackson County ($1,000,000), the city of Lincoln Park ($200,000), the Clare County Road Commission (two grants totaling $100,000) and Bob Mitchell and Associates ($39,138.18).

Pound said despite their failures to report, none of these recipients will be penalized because there is no specific penalty spelled out in the Recovery Act: "We'd like there to be some (penalties). We've campaigned for there to be some. We've urged it."

Pound said it's a matter of accountability: "We want people to know that if you use taxpayer money, you've got an obligation to tell people how you're using it."

In April, the Obama administration issued a memo authorizing federal agencies to crack down on recipients for not reporting, using varying degrees of penalties. Pound expects to know more about the memo's impact during this next reporting period. "We obviously hope it is making a difference."

See also:

$41 Million in Stimulus Money Went Unreported by Michigan Agency

Black Holes and Plankton Research Get Stimulus Spending

Stimulus Boosts Bus Transit

Stimulus Fails at Job Creation

Private Home Weatherization a Stimulus Spending Priority