I kept clicking and read the actual report on the transportation department audit. It was a typical government internal audit. They said project managers charged with actually getting the work done were too slow in following the rules and weren't perfect in the arcane world of "jobs created" accounting. For example:
2. The process to ensure accurate and timely reporting of jobs created/retained with ARRA funding may not be adequate or reported to the appropriate agency.
The Recovery Act requires grant recipients to report quarterly on jobs created or retained with ARRA funding. Prime recipients (entities who receive ARRA funds directly from a Federal agency) report jobs data directly to the Federal website FederalRecovery.gov. Subrecipients are required to report at least quarterly to the prime recipient; which for many of the City’s grants, is a State agency. We noted LADOT reported jobs created/retained directly to the OMB in October 2009, instead of reporting the information to Caltrans, who is the prime recipient with reporting responsibility to the OMB. Additionally, reporting deadlines were missed for some projects in November 2009 and March 2010. We also noted that the Department reported jobs data based on budgeted positions retained, and not actual hours worked.
The press release by the controller then took basic findings about LA's business processes and the strings-attached ARRA money trail and blew it up to a social commentary on the scope of the project:
“I’m disappointed that we’ve only created or retained 55 jobs after receiving $111 million in ARRA funds. With our local unemployment rate over 12% we need to do a better job cutting the red tape and putting Angelenos back to work,” said City Controller Greuel.
From there the Yahoo reporter then took individual project titles (only), repeated LA's reported job statistics and did some division to get the headline and statistics he wanted.
Move along folks, nothing to see here. The whole "story" is based on faulty job creation estimating methods (using only on the installer's time, a small part of the overall expenditures), a politician's desire for a catchy audit finding and an obliging reporter willing to twist the facts to create the most sensational conclusion possible.
The funniest part? A government auditor saying red tape needed to be cut. In my experience, that's the opposite of what those guys are about.