September 14, 2009: Fiscal reporting still a puzzle to New Jersey officials

The federal Government Accountability Office is conducting reviews of how New Jersey and some other states are spending funds from the American Recovery and Reinvestment Act and making the information available in bimonthly reports. This is a good thing, because New Jersey has not yet figured out how to integrate reporting requirements into its overall fiscal policy.

For example, the state’s recovery website lists only a few of the state agencies subject to reporting requirements: the Department of Agriculture, Department of Transportation and the Board of Public Utilities.

Although New Jersey is using $1.3 billion of the Act’s State Fiscal Stabilization Fund to avoid reductions in education and other essential public services, few concrete answers about how exactly the money is being spent have been provided. The state has instead requested the GAO to provide more guidance on spending.

One thing is for certain: the Recovery Act has helped New Jersey balance its FY 2010 budget and has prevented many cuts to critical programs. But full, accessible disclosure of all spending would bring the openness and accountability needed to ensure the state is spending the money wisely.

With a new GAO report due later this month, more may be known about specific ways New Jersey is spending ARRA funds. Fortunately, the GAO is actively participating in the accountability process. Since transparency is critical, these bimonthly reviews will do much to help that process.

New Jersey’s full GAO review can be found here.