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.

The Lansing State Journal reported last week that the federal stimulus has been working.

The White House projects the spending act created or saved between 2.5 and 3.6 million jobs.

Experts at some limited government public policy think tanks give their opinions of the White House report.

Brian Riedl: Research Fellow for Federal Budget Policy at the Heritage Foundation

Of course the stimulus is a failure. Since it has been passed we have lost 3 million more jobs. If that is success, what does failure look like?

'Jobs saved' is impossible to measure. We can point out that the White House predicted that even without the stimulus unemployment would peak at 9 percent. And with the stimulus it would top out at 8 percent. We did the stimulus and it hit 10 percent.

The economy was still getting worse when the stimulus was passed. But they also based their policies on outdated economic theories, such as those claiming that you can spend your way out of a recession. Stimulus spending has no history of ending recessions before.

This shouldn't surprise people, yet the White House used the stimulus to ram $800 billion in unrelated spending through Congress.

Michael LaFaive: Director of the Mackinac Center's Morey Fiscal Policy Initiative

Government stimulus programs have a history of failure throughout the 20^th century. Where they succeed is in creating the illusion that the political class is actually doing something. That's probably why officials have put up millions in signs along highways reminding taxpayers that they delivered the bacon.

John Berlau: Director of the Center For Investors and Entrepreneurs at the Competitive Enterprise Institute.

They use the phony statistic 'saved' or 'created.' To say saved or created, who knows if this job would have been eliminated if you didn't do this program? It's impossible to know that.

You could go to any job and say, "If it weren't for the stimulus it would have been eliminated.'"

They are trying to make up for [the fact that] not enough jobs were created to justify this. How many jobs did it take out of the private sector with the money it took?

Job growth is still lagging and it is lagging because of the uncertainty of new regulations, the looming tax hikes and the level of spending to pay for things like the stimulus that is bringing on fears of inflation. There is a continuing lag in job growth because of the uncertain and negative prospects the Obama administration's big government plans are creating.

If there is a change in Congress that puts the brakes on big government programs, then there will be more certainty for the private sector and more businesses and jobs will be created.

One hundred  percent of the net new jobs are created by businesses five years old or less. Other businesses may create jobs but they also eliminate jobs. The companies that are creating more jobs than eliminating are the new businesses.

Tad DeHaven: Budget Analyst at the Cato Institute

Obama can go to Michigan and talk about the new battery jobs that will be created with federal money, but that's a classic example of what is seen. What isn't so easily seen are the jobs that won't be created or lost because of the diversion of economic resources from the private sector to the public sector.

The White House economists are touting how many jobs they are saving. It's almost laughable because they are using a model - basically a math equation - to come up with these figures. The equation is designed to give the answer that the government is creating all these jobs. It is meaningless. It is frankly embarrassing as far as I am concerned at this point.

Quite honestly, the intent of the stimulus package was to reward the unions at the state and union level. There are jobs not being created and jobs being lost because those resources are being diverted out of the private sector.

Who do you want directing scarce resources? Do you want entrepreneurs or do we want folks in Congress and the various bureaucracies trying to direct those resources?

The government spends money not on the basis of economics but on the basis of politics. Politicians don't think on the basis of the long term, they think in the terms of an election cycle.

The government doesn't possess a magic wand that can just create economic prosperity.