Summer of Discontent: Stimulus Money Leads to Payday Mayhem

Hundreds and maybe even thousands of young people in Detroit apparently had to stand in lines and in the rain for up to four hours to receive paychecks for their summer jobs.  Others did not know where to find their checks. Still others didn't get their paychecks at all. And on several occasions, police were called in for crowd control.

The payday mayhem is just one of the many findings of the U.S. Government Accountability Office (GAO) given the task of tracking the usage and monitoring of the American Recovery and Reinvestment Act of 2009 (a.k.a. "ARRA" or the "Recovery Act") in 16 states and the District of Columbia. Even though the first official report which is supposed to track the Recovery Act in great detail, won't hit cyberspace until October 30^th, the GAO is giving us some clues as to how well Michigan is spending some of its $18 billion share.

In its third bimonthly report released last month, the GAO cited problems with the ability of state agencies in six Recovery Act programs to monitor and report their use of stimulus money as required by the Recovery Act. In fact, the title of the report is, "Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed"

One of these six programs was the $74 million Worker Investment Act  youth program (WIA) administered by the state's 25 Michigan Works! agencies. The state has used $20.2 million so far, mostly for summer jobs programs for teens. The GAO spot-checked the programs in Lansing and Detroit, with the following observations:

"Some of the youth in Detroit's WIA summer youth program were not paid for their employment in a timely manner and checks had incorrect amounts, payee names, and addresses...At the August 22, 2009, distribution, we observed that youth had to wait in lines as long as 4 hours while standing in the rain to receive their paychecks. Detroit MWA officials confirmed that the amount of time youths had to stand in line to receive their paychecks was, on average, 3 to 4 hours. Further, we observed on several occasions on August 22, 2009, local police were called to assist with crowd control."

The GAO also notes that some of the youth may have not been eligible for the program in the first place, according to federal guidelines:

"During our fieldwork, we selected a nonprobability sample of 11 participant files. Our review of these participant files revealed inadequate or nonexistent support of WIA eligibility determinations."

To be fair, Detroit officials told GAO reviewers that the number of applicants for summer jobs more than doubled in 2009 from the previous year and they continue to work out the kinks. The GAO will let us know how well the state is working out those kinks in its November report.

In the meantime, there are several other resources that track stimulus spending in Michigan. These include ProPublica recovery tracker, the Wall Street Journal as well as the State of Michigan.

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