On Feb. 13, 2009, Congress passed the stimulus bill, meant to rush cash to projects that would quickly save jobs and create new ones while investing in the nation’s infrastructure.

But a year later, more than half of the $5.4 billion awarded to Indiana under the American Recovery and Reinvestment Act is still on the books of state agencies, according to a Journal Gazette analysis of federal stimulus reports.

Data reported by companies, organizations and local governments that have received stimulus money through Dec. 31 show awards that total only $2,336,145,641, while state agencies reported $3,053,936,445.

“That doesn’t stimulate,” said Purdue professor Larry DeBoer Jr., an expert in government policies. “You’ve got to spend in order to stimulate.”

The newspaper’s analysis shows that just five state agencies – transportation, education, finance, housing and community development as well as state government itself – were awarded 51 cents of every stimulus dollar sent to Indiana, with the Department of Transportation getting more than $1 billion.

DeBoer said he doubts that the state, rather than distributing the money, is deliberately holding back cash in an effort to shore up its own bottom line. Rather, he said, Congress attached so many strings to the funding that spending it – and thus stimulating the economy – can be difficult.

“There’s two different ideas that conflict. There’s the demand side, that says get money into people’s pockets and let them spend it,” DeBoer said. “But the other idea is, let’s create some infrastructure that will have some lasting value. Well, that takes more time.”

Congress was not only trying to do both but was also concerned the money would be wasted, so it added new levels of accountability to the spending.

Among the rules are prohibitions on states drawing down the cash and not spending it, said Cris Johnston, who oversees Indiana’s stimulus funding as director of the Government Efficiency Division of the state’s Office of Management and Budget.

“Virtually all (federal awards like this) are on a reimbursement. You generally spend your money first and get reimbursed out of this award,” Johnston said. “This money is not sitting in people’s bank accounts.”

Tracking difficult

Johnston said there’s another problem with the amounts reported – not all of that money has been received.

He said the state was awarded about $2.5 billion, of which about $1 billion has actually shown up in state accounts.

“What they’ve reported is the total of awards. That doesn’t mean the cash has come in to the state,” Johnston said. “We’ve essentially received and spent the billion.”

The rest will either come as reimbursements or will go out as quickly as it comes in.

“On federal funds, if you draw them down early and don’t spend them, you owe interest back to the federal government,” Johnston said.

Jake Wiens, an investigator at the Project On Government Oversight, a non-profit government watchdog group in Washington, D.C., said tracking money federal agencies distribute is always a problem, but the size of the stimulus package has exacerbated it.

“It is an overwhelming amount of money,” Wiens said. “(Tracking) it can be difficult because it’s such a vast program.”

Wiens said that Web sites created to increase accountability, such as www.recovery.gov, can help, but only so much.

“It’s almost inevitable problems will occur with a program this vast,” he said.

Awarding violators

The new data also raise questions about how the money was awarded.

Congressional districts are drawn so that they are similar in population. But of the nine districts in the state, one – the 7th District, represented by Democrat André Carson ofIndianapolis – got 24 percent of the awards reported in Indiana. That’s after state agencies and Indiana University and Purdue University were removed from the newspaper’s analysis because their large awards skew the results.

The $526 million award to Carson’s district is more than three times the $168.7 million directed to the 5th District, represented by Republican Dan Burton, which got the least.

The 3rd District, which covers Fort Wayne and much of northeast Indiana and is represented by Republican Mark Souder, came in seventh of the state’s nine districts with about 8 percent of the awards. The 6th District of Republican Mike Pence came in fourth with about 11 percent.

Souder said he was most disturbed by the 3rd District’s having the lowest number of jobs created in the state, despite President Obama’s focus on Elkhart County, most of which is in his district.

“Last year, when this massive spending measure was rushed through Congress, I opposed the bill because I didn’t feel the spending was focused on actually creating jobs for the unemployed,” Souder said. “Today, a year later, I continue to believe the best thing the government can do to aid in recovery is to get out of the way.

“We don’t need more government spending to spur the economy, we need to let businesses and employers get to work, free of overintrusive government regulations.”

Entities in the 11 counties in northeast Indiana reported awards totaling $208.7 million, with the bulk of that going to schools.

Project On Government Oversight’s Wiens said it should also not be a surprise that awards sometimes go to the very entities the federal government has sanctioned.

BAE Systems, the world’s second-largest defense contractor with a plant on Taylor Street in Fort Wayne, reported more than $150,000 in stimulus awards. Unlike most awards, the BAE contracts do not say what they are for or even which federal agency they are from.

Last week, BAE Systems agreed to pay $400 million to resolve decade-old allegations that it violated federal laws on bribing foreign officials and intentionally misleading the government about it. The Justice Department said the company made hundreds of millions of dollars in payments to third parties, “knowing of a high probability that money would be passed on to foreign government decision makers to favor BAE in the award of defense contracts” and failed to disclose the payments to the State Department.

Wiens said companies are trained not to worry about violations affecting future awards. “They continue to get contracts and there’s no accountability,” he said. “They learn they’re going to continue to get contracts and there’s little to no risk.”

Little recourse

There’s also little risk in reporting stimulus awards improperly, Wiens said.

Of the nearly 3,500 awards listed for Indiana, 116 were flagged as reported after government deadlines. Almost half of those blamed the federal government itself: Many said the U.S. Department of Education did not inform them until the last minute that they had to report the award, and many others said the government’s reporting system was not working properly.

“We have certainly heard those claims. We’ve also heard excuses from people for not reporting,” Wiens said. “But outside the threat of not receiving future funding, there’s not much that can be done about it.”

Wiens also said the competing interests inherent in the stimulus package created problems.

“There’s the need to spend the money quickly, … but it’s also supposed to be as accountable as possible,” Wiens said. “Accountability takes time, and it takes resources. It’s kind of a Catch-22 – if you’re going to get it out quickly, accountability suffers.”

dstockman@jg.net