Bill gives state and local governments more stimulus flexibility

Legislation would allow funds to be used for oversight and contract management.

Key members of the House Oversight and Government Reform Committee have formally introduced legislation to provide state and local governments with increased flexibility to spend Recovery Act funds.

The legislation addresses several concerns that were raised during recent committee hearings on implementation of the economic stimulus package. It would allow state and local governments to set aside 0.5 percent of their Recovery Act dollars "to conduct planning and oversight to prevent and detect waste, fraud and abuse.''

The Recovery Act already instructs agencies to "reasonably adjust" or increase the amount of federal money that state and local governments are allowed to spend on administrative expenses, such as the data collection requirements outlined in the bill. But the new legislation adds audits, and planning, management and oversight of contracts and grants to the list of covered administrative activities, according to Jenny Rosenberg, spokeswoman for Rep. Edolphus Towns, D-N.Y., chairman of the committee and one of the bill's sponsors.

Similar language was included in a bill (H.R. 1911) Rep. Gerry Connolly, D-Va., introduced earlier this month. Connolly co-sponsored Towns' legislation, along with Reps. Darrell Issa, R-Calif., ranking member of the Oversight and Government Reform Committee; Dennis Kucinich, D-Ohio; Todd Platts, R-Pa.; and Peter Welch, D-Vt.

The bill also permits state and local governments to use pre-negotiated contracts on the General Services Administration's multiple award schedules for economic stimulus projects. Towns made the cooperative purchasing announcement during a procurement conference in Arlington, Va., on Wednesday.

A third provision requires Office of Management and Budget Director Peter R. Orszag to issue detailed guidance to state and local governments on how they should define and report "jobs created" and "jobs retained" using Recovery Act funds.

OMB is planning to issue guidance in early May establishing standard procedures for calculating jobs creation, Vice President Joe Biden said in a letter last week to the leaders of the Senate Homeland Security and Governmental Affairs Committee.