Smart Grid Today discovers a broken system, highly flawed website intended to show where taxpayer dollars are going

WASHINGTON, DC (June 18, 2012) – The only website intended to tell US taxpayers how billions of their Recovery Act tax dollars –including Smart Grid Investment Grants (SGIGs) – are being spent is failing at its mission because of sloppy data collection, interpretation or presentation, an exclusive Smart Grid Today analysis shows. The site's many problems make it difficult or impossible to use effectively in tracking how ARRA grantees are spending the public's money.

Recovery.gov is "the US government's official website that provides easy access to data related to Recovery Act spending and allows for the reporting of potential fraud, waste and abuse," the site claims on its opening page. Included among the $275 billion in ARRA funding is $3.5 billion dedicated to the SGIG program. That program gave out money through DOE, starting in late 2009.
Smart Grid Today discovered the site's issues when researching an exclusive series of stories updating readers on the progress of the 99 SGIG-backed projects. In some cases, Smart Grid Today has been able to use Recovery.gov to successfully relay information about dollars spent and vendors chosen. DOE originally made 100 grants, but one awardee refused the money.
"The goal of Recovery.gov was quite virtuous: putting a lot of information online so people could see where the money was going," Darrell West, director of the Center for Technology Innovation at the Brookings Institution in Washington, DC, told Smart Grid Today this week in an exclusive interview. "That's definitely good. But for people who have a question and want an answer, it's hard to figure out. The government needs to work on the execution so it's actually useful."

Transparency board defends site

The federal Recovery Accountability & Transparency Board vigorously defended the site.
"People basically think it's pretty easy" to use, Ed Pound, a board spokesperson, told us this week. "We present the information we're supposed to present, as required by law." If consumers have a hard time understanding it, he added, "the place to go for guidance is OMB [Office of Management and Budget]" – a separate site, not linked to from Recovery.gov, where documents written with all the clarity and grace of the Internal Revenue Code set out grantees' reporting requirements.
OMB does offer some guidance in its "Clarification of M-10-08 Guidance (December 18, 2009)." It states, "For payments of $25,000 or more, include payments made to the vendor for the current and past quarters with the payment amount in the VENDOR TAB." It seems clear from our reporting either that some grantees have not read or followed this guidance or that they have not understood it.
Smart Grid Today will this summer publish an exclusive industry report updating SGIG spending and project progress.
"The US government is not only derelict in its duty to keep taxpayers informed about the use of public funds to support power grid modernization but also is continuing to demonstrate carelessness that will hinder grid upgrades in the US," Smart Grid Today Editor Brett Brune said.
"This is the third SGIG debacle on which we have reported: In early 2010, Smart Grid Today published a dozen stories about the federal government sorting out whether SGIG awards were federally taxable income -- months after the grants were awarded; and in two months ago, Smart Grid Today published several articles that brought to light vendor-selection data that Reliant Energy had been hiding from public view -- information the firm said it was withholding with DOE's approval. Our SGIG progress update this summer will enable more informed -- and therefore efficient and intelligent -- smart grid development planning."

Problems are many

Among other issues, Recovery.gov:

*Omits all spending data on some projects that it states have cost hundreds of thousands of dollars, so site visitors get no clue where the money went.

*Sometimes presents data in a way that makes it impossible to tell how much a grantee spent on any given vendor in any given quarter. Because apparent duplicate entries appear in successive quarters, the total amount spent cannot be clearly determined – it can only be guessed at. Pound, a DOE grant supervisor and grantees gave conflicting explanations of the proper procedures for reporting quarterly vendor payments.

*Does not properly delete zero-amount spending reports from grantees' quarterly summaries, causing distraction.

*Presents multiple awards to the vendor for the same service or product in different amounts during a single quarter, rather than adding them and presenting them as a single expense. This creates confusion and the appearance of errors.

Because of these specific issues, gaining an accurate spending picture for a grant requires locating and contacting DOE, the grantee or both. Neither DOE nor the grantees are readily accessible or oriented to, skilled at or responsible for aiding the public.
Beyond these major problems are more minor issues that keep the site from being as useful as it could be. Among these are multiple unexplained acronyms, cryptic symbols, sloppy use of different terms and descriptions for apparently identical items, clearly erroneous and even nonsensical numbers that have apparently gone unchecked and egregious typos.

Issues drag on for 2 years

Eight quarters have passed since most SGIG grantees began feeding their data onto different sites -- principally one called FederalReporting.gov – using templates provided by the federal government.
Overseers are supposed to check the data in form and substance and to request clarifications if necessary before the data is presented in Recovery.gov.
Yet the errors and ambiguities continue.

Penalty absent

No penalty is imposed on grantees that report data improperly, even repeatedly, a DOE technical project officer (TPO) in charge of several SGIGs told us this month.
"I cannot go and make changes myself, and I have no power to make people do it correctly," the TPO said, speaking on condition of anonymity.
The source reported feeling frustrated about how confusing the reporting requirements and procedures are: "The situation is unfair to taxpayers. I'm one myself, and this much confusion about how the data should be reported and interpreted – it's just wrong."
Federal employees working with SGIG recipients may not even know the data is incorrectly presented. They may never have gone to the main public site, Recovery.gov, so they have no idea what the public is seeing or whether the data has been scrambled since its receipt and review by other federal employees. "This is the first time I've seen this site [Recovery.gov] myself," the TPO told us this month.
Grantees, too, may be unaware that they are submitting data improperly, that data they submitted properly is appearing in a garbled form, or both. "I had never seen the site" before Smart Grid Today contacted her this month, said Julienne Sugarek, process project manager for CenterPoint Energy Houston Electric, which won a $200 million SGIG. "It certainly would create questions" when identical data appears in successive quarters, she acknowledged. Determining whether apparent duplicate entries were in fact duplicates "would take a tremendous amount of effort."

Quarterly payments unclear

The biggest problem with Recovery.gov is that it leaves unclear how much money each grantee paid to each vendor each quarter. Data is viewable by quarter, and each quarter's "vendor transactions" section is intended to show only payments to vendors in that period, the DOE TPO said. "It is not cumulative," he said. "It is just the spending for the quarter."
But some SGIG winners provide cumulative data. That is, the payments listed in any one quarter include all payments from all prior quarters as well. And that is the intention, Recovery.gov's Pound said.
But by no means do all SGIG recipients report cumulatively. Many list only the current quarter's payments. Trying to tell which recipient is taking which approach is impossible without contacting them.
For example, CenterPoint's 4Q11 report includes scores of payments that duplicate those listed in earlier quarters in the three most significant data fields: vendor (for example, AT&T), product and service description" (for example, "voice, long-distance/toll free, private line, internet services") and payment amount (for example, $313,304). When such duplicate items appear in successive quarters, site visitors must guess whether they are genuine (unlikely but possible, if they are recurring charges) or repeated from prior quarters. Smart Grid Today succeeded in clarifying the situation only through a lengthy series of phone calls. Smart Grid Today will publish its update on CenterPoint's SGIG project next week.

Some numbers don't add up

As another example of the problems on Recovery.gov, the Iowa Association of Municipal Utilities' (IAMU) report for the quarter ended March 31 reported six payments to vendors of greater than $25,000 each, for a total of $2,904 – a total that cannot mathematically be correct. Likewise, IAMU reported two payments to vendors of less than $25,000 each, totaling $2,904, which appears to be an error because it duplicates the number in the line item above it.
When asked about the problem, Elaine Hill, an accounting assistant for IAMU charged with providing SGIG project data to DOE, could not explain it. "I have my report in front of me and I didn't put those numbers in," she said, referring to the payments greater than $25,000 each. "I don't know how they got there."
Smart Grid Today will publish its update on IAMU's SGIG project next week.
A small related absurdity of Recovery.gov is that it separates payments to vendors into those "above $25,000" and those "below $25,000" – ignoring the possibility that an award might be exactly $25,000 and thus technically not subject to being reported at all.

List of issues long

Several related problems further muddy the waters:

*CenterPoint in its 4Q11 report had four entries identical in vendor and product and service description but different in payment amount. Tallying them and making them a single entry would have reduced possible confusion.

*Quarterly spending reports are not cleansed of superfluous data. For example, IAMU's report for the quarter ended March 31 lists several vendors with "$0" in the "payment amount" blank and the notation "no activity" in the "product and service description." If vendors have been paid nothing during a quarter, the correct procedure is to omit them entirely from that quarter's report, the TPO at DOE told us.

*ARRA recipients are required to report payments to vendors only if they exceed $25,000, said Russell Fray, business-operations manager for SAIC, who responded to questions about Vermont Transco's reporting. "The sum of all expenditures less than $25,000 is reported as a lump sum without itemizing the recipients." That procedure, if Fray is reciting it accurately, lets recipients spend money without identifying the vendor. But reviews of scores of SGIG winners' quarterly reports have revealed no such lump sums.

*Many grant winners do include payments of under $25,000 each on their quarterly reports – including items like $35 to Home Depot for bolts. The policy whether items over $25,000 must be reported obviously remains unclear to them, even after several quarters of reporting.

*Some SGIG winners have labored under the prolonged misunderstanding that they need not disclose the names of vendors they are using if doing so would present a competitive disadvantage – a misconception Smart Grid Today helped dispel in April.

*The reports are riddled with typos, incorrect punctuation and meaningless or unclear phrases. For example, one vendor was ostensibly named "J Adams Contractor" in the Cobb Electric Membership Corp 1Q12 expense listing. Undoubtedly the listing should read that the name of a contractor was J Adams. And in this sentence, also from Cobb's 1Q12 report, stray question marks render the sentence unclear, if not meaningless: "? 191,276 meters were deployed as of 3/31/12, with 27,523 of these deployed during Q1, 2012 ? 149,528 meters have been encrypted, and the remaining installed meters are in process of being encrypted ?".

*As often as not, contacts for SGIG recipients are omitted. The spaces left for contact information have simply been left blank – for eight quarters in a row.

Important data missing

Some recipients appear not to be providing other mandated data.
Stanton (Neb) County Public Power District got a $397,000 SGIG for an AMI project. By the end of last year, it had spent all of that money, according to Recovery.gov. But not a single sub-awardee or vendor appeared in any quarter of its reporting. So taxpayers can have no idea where their money went.
Tim Wurdinger, a technical support specialist for the Nebraska utility, is charged with filling out and submitting reporting data on the grant. But he has never recorded any payments to vendors, even though many have been made, he told us recently. And he has never been corrected by DOE, he added.

Reporting policies problematic?

Other problems appear to stem from reporting policies, not from errors in how data is input or handled.
In all but a handful of the many listings of "vendor transactions" – that is, payments to vendors – SGIG winner Vermont Transco (VT) put the phrase "not reported" in the fields "vendor DUNS number" and "product and service description."
Those omissions occur only for payments to vendors by the 10 sub-awardees (also known as sub-recipients) of VT, not for payments to vendors by VT itself, explained Allen Stamp, a spokesperson for Vermont Transco, in a series of emails.
"Per instructions on FederalReports.gov for reporting of that information, it is an optional requirement to report that information for sub-recipients," Stamp said. "The ‘not reported' data is that of the vendors from our sub-recipients."
If his assertion is accurate, it means that sub-recipients can lawfully withhold the reason they spent money with vendors, or that recipients can withhold that information on behalf of sub-recipients.
VT volunteered to give Smart Grid Today the missing data, and that SGIG update was published this month.

Some solutions easy

Easy solutions exist for some of these problems.
If every payment over $25,000 to a vendor carried a unique serial number, suspected duplicates could be detected. Directions to grantees written in clear, simple English could clarify their obligations. Consistent monitoring and rigorous enforcement of reporting requirements – with penalties – could produce better reports.
"There's a lot of information on the site, but not in an easy-to-understand form," West, director of the Center for Technology Innovation at the Brookings Institution, said. "We really need a third party to come along, realize this is important data and summarize it and make it easier for people to understand. That happened with federal data on election-campaign donations. But nothing like that exists for this funding, so far as I've seen."

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