By:  Gerry Lozano

Many of our clients have been successful in specifically targeting and receiving funds as a result of the federal stimulus legislation passed earlier this year. Depending upon how and from whom stimulus funds were received, recipients may be required to file federal government reports.  The first such report is due OCTOBER 10, 2009, for funding received from February 17, 2009, through September 30, 2009.  Thereafter, the reports are due quarterly for on-going projects and activities.  Therefore, the second such report is due JANUARY 10, 2010. As explained below, the online federal reporting system will begin receiving reports on OCTOBER 1, 2009.

Each of the Federal stimulus fund awards includes compliance language requiring these reports. Failure to file the reports can result in withholding of funds, termination of funding, or suspension and debarment, as appropriate. The award term language is found in the Code of Federal Regulations (CFR) at 2 CFR Part 176.50. The following overview is provided to assist you with the reporting requirements and to direct you to sites with more detailed information for your particular situation.

On February 17, 2009, Congress passed the American Recovery and Reinvestment Act, Public Law 111-5. Title XV of the Act requires transparency and accountability to taxpayers for the funds distributed by the U. S. Government. Section 1512 of Title XV is referred to as the Jobs Accountability Act and it requires any entity – other than an individual – that receives recovery funds from the federal government to report on the use of funds. Each subsequent sub-recipient is not required to file this report, only the prime recipients. The first of these reports are due October 10, 2009.

Section 1512(c) provides that the recipient reports shall contain the following information:

(1) the total amount of funds received from a federal agency

(2) the amount expended or obligated to a project or activities

(3) a detailed list of all projects or activities for which recovery funds were expended or obligated, including:

(A) the name of the project or activity

(B) a description of the project or activity

(C) an evaluation of the completion status of the project or activity

(D) an estimate of the number of jobs created and/or retained by the project or activity

(E) for infrastructure investments made by the State and local government, the purpose, total cost, and rationale of the agency for funding the infrastructure investments with funds made available under this Act, and the name of the person to contact if there are concerns with the infrastructure investment

(4) detailed information on any subcontracts or sub grants awarded by the recipient to include the data elements required by the Federal Funding Accountability and Transparency Act of 2006 (Public law 109-282), allowing aggregate reporting on awards below $25,000 or to individuals, as prescribed by the Director of the Office of Management and Budget (OMB).

OMB issued a letter on September 11, 2009 [M-09-30], titled "Improving Recovery Act Recipient Reporting." Per this letter, the Recovery Accountability and Transparency Board has identified and deployed a nationwide data collection system at www.FederalReporting.gov to collect data required by section 1512 of the Act. Those who are required to Report must first register. As of August 17, 2009, recipients could register at www.FederalReporting.gov, and they were encouraged to do this in order to facilitate reporting beginning on October 1, 2009. As of September 15, 2009, recipients who were registered users of the system could begin to test the structure of the system and create a sample file to verify compliance before October 1, 2009.

On June 22, 2009, OMB published several very helpful documents on its website. The first is a 15-page List of Programs that are subject to Recipient Reporting.  The next is a 22-page Recipient Reporting Data Model, which is the current version for the reports due on October 10, 2009, for the quarter ending September 30, 2009. Changes to this model will be reflected at the reporting site: www.FederalReporting.gov.  A review of this Model, however, would be helpful to a recipient before entering the data on the reporting site. Third, OMB published Memorandum M-09-21, which contains 39 pages of very helpful information regarding the reporting requirements. It also explains the prime versus sub-recipient categories, as well as distinguishing a sub-recipient from a vendor.  It also reminds recipients that they must have a D-U-N-S number from Dun and Bradstreet in order to file their reports, and it tells recipients how to get a D-U-N-S number if they don't have one.

This guidance does not apply to those who received stimulus funds through Federal contract awards directly from the Federal government. The guidance for those awardees is provided in the interim Federal Acquisition Regulation (FAR) Clause 52.204-11.  Also, this above guidance and reporting requirement is in addition to any other requirement in the federal agency funding document signed by the recipient

For those who have not previously done business with the Federal Government, this reporting requirement may be confusing. However, the best way to get it done is by registering and testing the reporting structure by creating a sample file, and beginning to enter the data for the first report on October 1, 2009, rather than waiting for the deadline of October 10, 2009.

Jackson Walker has analyzed the requirements and can assist you with compliance with this and other issues related to Stimulus Act funded projects. If you have any questions about this e-Alert, contact Gerry Lozano at 210.978.7741 or glozano@jw.com.