Murphy leads effort for accountability in Iowa’s federal stimulus spending

The federal government is expected to shower Iowa with more than $2.5 billion as part of the economic recovery program passed by Congress this year, and every dollar must be accounted for.

Jon Murphy, director of the Office of State-Federal Relations

From money spent on highway projects to subcontractors hired to weatherize homes, every payment must be reported and justified. With more than 20 state agencies receiving funds, and dozens of programs within those departments administering recovery act dollars, keeping tabs on expenses and avoiding fraud and waste is a Herculean task. And it falls on a group of state employees appointed by Gov. Chet Culver, led by Jon Murphy, director of the Iowa Office of State-Federal Relations.

Murphy’s name might not be familiar to most Iowans and he hasn’t garnered a lot of attention since he was appointed to his post in 2007. But he, along with the rest of his team, is charged with coordinating every department and program that receives stimulus money, ensuring that they are in compliance with federal requirements and are properly reporting how money is spent.

“The coordinating team kind of brings together the different pieces of state government,” Murphy said. “The Recovery Act money is spread out over a number of different funding streams, so we try to coordinate all the activities of the stimulus. We will also are the central reporting site for state government to the federal government, which is a pretty extensive organizational process. We have to get the entire state government to report as a single entity to the federal government. That’s an organizational feat.”

After 11 years in Washington, D.C., Murphy moved back to Iowa in June in order to better manage the Recovery Act task force, which is made up of representatives from the Department of Administrative Services, Department of Management and the governor’s office. Together, task force members help to coordinate different parts of state government and assist them in following strict federal standards for accountability and transparency.

“It takes a lot of coordination between state agencies when it comes to reporting how we spend these funds,” Murphy said. “That’s what we’re focused on right now. We’re making sure we’re meeting federal requirements, getting the proper certification and hitting all the marks to receive the funds. Now we’re getting ready for the first reporting period. It’s a constantly shifting landscape of guidance we’re getting from the federal government. We’re trying to make sure departments understand the requirements.”

Money from the federal stimulus is allocated directly from federal agencies to their state counterparts. For example, the U.S. Department of Transportation will provide funding to the Iowa Department of Transportation, which will then hire contractors to perform the desired work.

But, while the money is allocated to individual agencies, data must be collected and reported back to the federal government all together, which is where Murphy and his team come in.

“We’re trying to pull all that information back up to one centralized location so that we can report it accurately to the federal government,” he said. “It’s a complicated system, but it’s necessary to capture the data the federal government wants.”

Decisions on how the money is spent are left to the individual agencies, Murphy said. His team’s role is simply “keeping trains running on time, sharing information between agencies and making sure deadlines are hit.”

“It’s a big responsibility,” he said.

A return to Iowa

An Iowa native, Murphy lived in Washington, D.C., for more than a decade. He worked in U.S. Rep. Leonard Boswell’s congressional office for two years, and then joined Iowa State University’s lobbying effort in the nation’s capital.

“Just like most top research universities, Iowa State has a D.C. office,” he said. “I was the director of federal relations for them for six and a half years.”

Murphy was tapped in March 2007 by Culver to lead the Iowa Office of State-Federal Relations, a two-person office that works to ensure the state has a say in how legislation is drafted, as well as how different legislation may impact the Hawkeye State. When Congress passed the American Recovery and Reinvestment Act, Murphy quickly realized it would monopolize a large portion of his job, prompting his return to Iowa in June.

“A lot of what the relationship between state and federal government right now revolves around the Recovery Act,” he said. “So a majority of my time is going to that.”

His main focus currently is an Oct. 10 deadline for reporting to the federal government how Iowa has spent the stimulus money it has received thus far. Murphy said every level of state government would learn a lot from this first official reporting period.

“This is basically uncharted territory,” Murphy said. “This is an entire new level of transparency and accountability standards. There are going to be problems, but we’re doing everything we can to make sure we are keeping all problems to a minimum.”

So far, Murphy said he is proud of the work that has been done by his team and all levels of state government.

“I think Iowa has hit every mark in terms of implementing the recovery act, and I think we’ve done it as well if not better than any other state,” he said. “We’ve created this reporting system using existing state resources, in house, and the system is as good if not better than any system around the country.”

Maximizing federal dollars

So far, money for transportation projects has been the easiest to spend quickly. Murphy said that is because there were already a huge number of projects lined up that needed funding.

“There were shovel-ready projects already in the pipeline, so money could go out pretty easily,” he said. “That also clears the path for other projects down the road that may not have gotten funding. Those projects are now back on the table.”

Another area where federal money has been spent quickly is unemployment insurance and Medicaid. Economic downturns create a greater need for these types of programs, Murphy said, and the additional funds ensured state government wouldn’t’ have to reduce services or cut provider rates in order to fund the increased demand.

The state has also allocated $202 million for K-12 education, Murphy said, which will be sent to school districts in monthly installments throughout the school year.

“How they spend that money is left to the discretion of the school districts,” he said.

The state’s energy program also got a boost from federal stimulus dollars. The Office of Energy Independence has stopped accepting applications for funding and will begin handing out financial awards once they are able to sort through the more than 200 applications they received, Murphy said.

“We’re getting the money out as quickly as possible,” he said.

State agencies and local government’s are also being encouraged to go after any competitive grants that they are eligible for, Murphy said.

“We’ve estimated that our total Recovery Act Funds we expect to receive is roughly $2.49 billion,” he said. “The reason that’s an estimate is because there are things like competitive grants departments are going after, so we may get a more, we may get a little less. We’re trying to get as many federal dollars as we possibly can. We are encouraging departments to turn over every stone looking for federal money.”

Don’t call me ‘czar’

Many states have established one point person to oversee federal stimulus spending, a so-called “Stimulus Czar.” Murphy resists that moniker.

“We’ve approached this as a team,” he said. “It’s not my nature to promote myself, that’s for sure. My goal is to get this Recovery Act money implemented as best as possible, and that requires a team effort. This is too comprehensive and requires too many different skill sets for one person to tackle.”

Despite not wanting much of the limelight, Murphy has hit the road in recent months to meet with local officials around the state to ensure all their questions are answered.

“Over the course of the last month or so, I drive out to communities and meet with city managers, mayors, city council members, county supervisors and talked with them about the Recovery Act,” he said. “It’s good to open dialogue. Specifically, I’m focusing on the smaller community in Iowa.”

Those communities may be eligible for federal funds and not know it. Or, they could be receiving federal funds and not be aware of strict accountability standards.

“I want to make sure everyone is on the same page,” Murphy said.

That will ensure the stimulus program does everything it has been advertised to do — help Iowa climb out of a financial recession.

“The Recovery Act, and Gov. Culver’s I-JOBS program, is a bridge to a more stable economic situation,” Murphy said. “An economic situation where we can actually grow our economy and meet future needs.”

As for the success of the program, Murphy said less than a year ago the economy was teetering on the brink of disaster.

“Now, we’re talking about an economy that is beginning to stabilize,” he said. “And it hasn’t really been that long.”

And with each passing deadline and every dollar spent, Murphy said the entire state government apparatus is improving the process.

“We anticipate some hiccups in the system, but the philosophy is to constantly improve in how we implement it,” he said. “We’re doing it better this week than we did last week. We’ll do it better next week better than this week. We’re constantly learning and improving how we do things.”