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Monday, November 09, 2009

Creative accounting: Federal Government Edition

Just how many jobs were "created or saved" by the Federal stimulus package? Hard to say. It is notoriously difficult to prove the "saved" portion of the equation. However, notwithstanding such difficulties, the Federal government provided "guidelines" as to how states and localities could determine whether a job was "saved" by the stimulus. This, in turn, led to a number of jobs "saved" that the good folks on the pro-stimulus side of the debate could flaunt on the Sunday talk shows.

One problem, however, is that the guidelines are probably not very reliable as the folks who gave us the stimulus also gave us the guidelines. This problem was highlighted in the case of the California State University system which, by the government's guidelines, was able to save fully 50% of its work force with the stimulus money. On the other hand, UNC Charlotte had to let go 15 people due to the recent crisis, suggesting that the CSU system would not have had to let 50% of its work force go save the stimulus.

This sentiment was basically confirmed in this Sacramento Bee story:
California State University officials may have followed federal guidelines in reporting that stimulus money saved an inordinate number of campus jobs, but someone in the university system should have objected to reporting the numbers because "they don't make sense," California's stimulus watchdog official said Friday.

CSU reported late last week that federal stimulus dollars let them retain about 26,000 full-time-equivalent positions. That's more than half of CSU's work force, and it's more jobs than the state of Texas and 44 other states reported saving with stimulus money.

A CSU spokeswoman told The Bee earlier this week that the system reported the jobs in strict accordance with federal guidelines, but confirmed that half the system's work force would not have been laid off if not for stimulus dollars.

"If I were them, and I followed instructions to a T, and I came up with a number like that, I would have said, 'Whoa,' " said Laura Chick, the state's inspector general for Recovery Act funds. "Then I would have been on the phone saying, 'These numbers don't look right.' "

Whoa indeed.

Full story here

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