The Obama administration announced yesterday that it will allow states to use a small fraction of the economic stimulus funding they receive for oversight or auditing purposes, a decision sought by several states facing serious financial hardship amid the economic downturn.
The Office of Management and Budget said in a memo posted yesterday afternoon that the states can use up to 0.5 percent of the total recovery funds they receive for administrative costs. The White House hopes the new guidance will make it easier and faster for states to get money for the staff and technologies needed to handle the influx of federal cash.
“A majority of Recovery Act dollars are disbursed by the States, who thus play a central role in the prudent, timely, and transparent expenditure of Recovery funds,” OMB Director Peter R. Orszag wrote in the memo. The White House noted that Orszag and Vice President Biden have heard from several state officials who greater freedom to spend some of the stimulus money on administrative costs. Several good government groups credit the administration for acting quickly to address concerns expressed by state and local leaders.
Here is a related story from Stateline on how state budget cuts have resulted in fewer state auditors.
Tracking the Recession, Cuts, stimulus create risk for auditors