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Stimulus Funded Nearly 600,000 Jobs in Fourth Quarter

Stimulus Scorecard
Stimulus Scorecard

Nearly 600,000 U.S. jobs were funded by Recovery Act money in the final quarter of 2009, according to the Recovery Board that monitors federal stimulus spending.

But that's just the surface of a deeper story.

The somewhat media-shy Chairman of the Recovery Board, Earl Devaney, spoke with CNBC on Monday to provide some depth.

Let's start with the accuracy of the number. Remember phony Congressional districts? Critics should have a difficult time finding that kind of discrepancy this time around.

"I would be naive to think there aren't mistakes. There are things we have not massaged, but I am pretty sure we won't find phantom districts," said Devaney, who poked a little fun at the controversy surrounding the reporting issues last fall. "I don't think they (journalists) are Sherlock Holmes. We are putting it right in front of them."

Predictions '10 - See Complete Coverage
Predictions '10 - See Complete Coverage

"I get frustrated when reporters do the "aha" when they see a non-existent zip code," he added, noting that the fallibility is a natural part of the effort at transparency. "If you are a fan of transparency and accountability, which I am, I think this is pioneering work."

"The public might not like what they see, but they get to see it."

The biggest take-away from the conversation was that Devaney actually thinks—even with the updated and more liberal accounting rules—the 599,108 number is probably low, by a substantial margin.

Why? A lot of recipients of Recovery Act money have not even reported the results of the spending yet.

"My biggest concern is under-reporting from people who are supported (by the federal money)," said Devaney. "Our count might be low."

Devaney would like to be more aggressive in pursuing recipients who have not reported, but under the Recovery Act, he does not have the authority to penalize a delinquent recipient or stop payment of funds.

Another factor he touched on was fraud and waste. One watchdog group made headlines recently, saying that 7 percent of funds are lost through fraud and waste. If you assume that number is accurate, that would translate to more than $50-billion wasted from the Recovery Act.

Devaney says it's not even close, to his surprise actually.

"So far, I don't see what I had imagined I thought I would see a year ago," he said, adding that some degree of fraud and waste is unavoidable. "We have more eyeballs on this money than I have ever seen.

"If you were a crook, you wouldn't pick this money (to steal)."

The final notable point is addressing the question as to when the stimulative impact will wane. Although Devaney's job is to transparently report on the impact and not analyze it, he admits there is a lot left to be spent.

"My sense is that this is going to ramp up," he said. "In the next couple of quarters, you will see more money being spent."

As for the impact on job creation, he will check back in with the general public in three months.

Be sure to get in touch with us: stimulus@cnbc.com