$41 Million in Stimulus Money Went Unreported by Michigan Agency

A Michigan agency landed on a government "naughty" list for not reporting how it spent $41 million in stimulus money, at least according to the official website that tracks the money disbursed by the American Recovery and Reinvestment Act of 2009 (ARRA). The federal government awarded this money in April 2009 to the Michigan Office of Drug Control Policy as part of the Byrne Justice Assistance Grant program (Byrne JAG) which grants money to state and local law enforcement agencies.

The problem is that the state Office of Drug Control Policy (MODCP) no longer exists and the award was never disbursed.

Federal law requires recipients to report quarterly how stimulus money is used. The $41 million award has the dubious honor of being the eighth largest amount in a list of the top 10 stimulus awards that went unreported in the first quarter of 2010, according to data compiled and first reported by watchdog reporter Kevin Lee:

Top 10 non-reporting cases

Key: ED = Department of Education; HUD = Department of Housing and Urban Development; DOJ = Department of Justice; RHS = Department of Agriculture, Rural Housing Services; DOT = Department of Transportation.

Earlier this year, the Obama administration issued a memo to crack down on recipients who don't report the use of their stimulus awards, including such measures as "Terminating Federal funding," "Initiating suspension and debarment of the prime recipient" and "Taking other enforcement action as the agency determines appropriate to the circumstances."  

Nancy Bennett is the manager of the Michigan State Police Grants Management Division, which oversees the Byrne JAG program. Bennett said she's not too concerned about appearing on the list of non-reporters. "Everyone's aware it's an error," Bennett said. "We understand there's a lot of reporting requirements, and rules aren't set until the last minute."

She told the Mackinac Center that the governor's Executive Order 2009-42 of October 2009 abolished the state Office of Drug Control Policy and placed the Byrne JAG program under the jurisdiction of Michigan State Police. Due to this administrative shift, Bennett said the $41 million award was actually closed out in September 2009 and later re-awarded to the Michigan State Police in the amount of $38,692,431 (less administrative costs between April and September 2009). This amount was properly reported in the first quarter of 2010. (Interestingly, the $41 million amount was reported in the 2009 fourth quarter report)

Bennett added that the extra responsibility in administering the stimulus award is worth it, "We've been able to give a lot of money to a lot of needy programs. It (the stimulus program) has been a great benefit for the criminal justice system."

The MODCP award was the largest among Michigan's non-reporters in the first quarter of 2010. The $55,757,875.17 that went unreported included recipients DTE Energy ($4,995,271), the Pokagon Band of Potawatomi Indians (two awards totaling $2,724,635) and the Upper Peninsula Association of Rural Health Services (two awards totaling $665,285). Lansing-based Christman Company was listed as not reporting two awards totaling $5,286,215. A company spokeswoman said the inclusion of the Christman Company on the list was the result of having to learn a new reporting process. Angela Bailey said the stimulus money will show as properly reported for the second quarter 2010. "We experienced a learning curve," Bailey told the Mackinac Center.

The recipient reporting deadline for the second quarter 2010 was July 14. Their reports are expected to be posted on Recovery.gov on July 30.