Job numbers reported under stimulus spending are misleading: LA city controller

Los Angeles city administrative office's (CAO) reporting of job creation and retention numbers under the American Recovery and Reinvestment Act (ARRA) funds could be very misleading, said Wendy Greuel, LA city controller.

In the first 11 months that ARRA funds were available, the CAO reported that the City had created or retained 1,207 jobs, out of which 860 were temporary summer jobs, said the audit report on City’s use of federal stimulus funds, released last Friday.

“The figures were presented as individual positions, this could be very misleading,” the report said.

By the end of October 2010, the City had spent slightly more than $180 million out of $630 million awarded under ARRA funds so far.

The CAO policies did not make sure that job creation and retention numbers would be reported accurately or clearly, the audit said.

“While the systems in place appear to be effective in ensuring funds are not misspent, there appears to be substantial room for improvement in how expenditures, as well as job creation and retention figures are reported,” said Greuel.

Further, the audit also found that the City lacks a clear strategy on how to manage employees who have been hired or retained with ARRA funds, once that funding expires.

While the CAO has suggested that employees will be moved to special funded-projects or positions once ARRA funding has expired, given the City’s current budget crisis, it is unclear whether those positions will exist, the report said.

In a similar audit report released in September 2010, the city controller had found that the Los Angeles Department of Public Works generated only 45.46 jobs (the fraction of a job created or retained correlates to the number of actual hours of work) after receiving $70.65 million, while the target was 238 jobs. Similarly, the city’s department of transportation, armed with a $40.8 million fund, created only 9 jobs in place of an expected 26 jobs.

“With more money coming in to the City, we will continue to keep a watchful eye over every dollar awarded and spent,” Greuel added.