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Business intelligence software helps states track federal stimulus spending

State agencies like Arkansas' Department of Education are turning to business intelligence software to track and report federal stimulus spending.

With billions of dollars destined for local government coffers, pressure is mounting on state agencies to accurately track and report their spending of federal stimulus funds.

After all, with the economy on the brink, nobody wants a repeat of the first round of TARP funding last fall, in which some banks couldn't even say how they spent much of the $350 billion dollars shelled out by the government due to a lack of oversight.

Sensing an opportunity, IBM recently unveiled a version of its Cognos business intelligence (BI) software aimed at public sector agencies that will help them inventory, disperse and track stimulus spending and report results back to the federal government.

The new offering, which includes prebuilt Web-based data entry modules, dashboards and reports, was developed in February as a direct response to the American Recovery and Reinvestment Act of 2009, said Rob Dolan, who oversees government and education-related technology for IBM's BI and performance management group.

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 "The recovery act really does spell out some very specific rules around transparency and accountability," Dolan said. "It's important within government to understand where they're investing funds and the kind of programs they're investing in and how those programs are performing."

Other BI vendors, including Oracle, SAP and MicroStrategy have or are currently developing similar products, according to Gartner analyst David McClure. Many hope government agencies and other public sector customers, flush with stimulus money, will fill the gap left by corporate customers that have cut back on IT spending.

Arkansas' Department of Education is in the process of deploying the Cognos software to help it manage and track its portion of the stimulus funding, which comes to over $500 million, said Bill Goff, assistant commissioner for fiscal and administrative services.

The department is required to first spend stimulus funds to restore earlier budget cuts made due to the recession before it begins allocating funds for new initiatives, Goff said. "Once you restore any cuts, the remaining funds can be used to supplement what you're already doing."

The Cognos software will also allow Goff's department to monitor spending at both the school and district level, and let it report results back to the federal government. Goff said he hopes to have the software up and running later this month, a task made easier since his department has been using Cognos software to manage operations for about four years.

Like Arkansas' Department of Education, Gartner's McClure recommends state agencies first look to their existing financial reporting or BI software vendors for help tracking stimulus spending. They may be able to help state agencies modify current BI software to meet federal stimulus reporting requirements or in other cases offer relatively inexpensive add-on modules, such as Cognos has done.

"There's certainly a need and a requirement for this kind of tracking and reporting software, and states are trying to find out how to do it with minimal investment," McClure said. "It's been a big issue for most state and local governments since day one."

McClure said BI software can help state agencies not just report where stimulus money has been spent to the federal government, but also report its impact on state services and the public good, like whether it enabled schools to retain teachers or upgrade facilities.

"It can help determine if the spending is having a discernable impact on student outcomes," McClure said.

Being able to show results of stimulus spending is especially important thanks to the added media attention generated around government accountability and transparency since the TARP debacle last year, Goff said.

"It's extremely important with any public dollar, but the amount involved here and the publicity involved, this is probably going to catch a whole lot more attention than normal funding," Goff said. "We have to make sure this is spent appropriately."

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