Philadelphia has spent less than $1 million in the seven months since the federal stimulus program began - but you won't learn that from the city's Web site, which instead says more than $8 million has been distributed.

The dollar figure on the Web site is wrong, city Budget Director Stephen Agostini said this week.

The error is perhaps the most visible illustration of the confusion and disarray that stands to undermine the city's efforts as it pursues its share of federal dollars available under the American Recovery and Reinvestment Act (ARRA).

In an unusually blunt letter three weeks ago to Mayor Nutter, Agostini, who is overseeing the city's "Recovery Office," detailed concerns over what has been an inconsistent process for reviewing and evaluating applications for federal grant money. He also highlighted an uncoordinated approach in seeking those funds that could leave city agencies vying for the same pot of dollars.

"Currently, the Recovery Office does not know if City agencies are competing for the same ARRA grants from the US government, thereby risking the chance that federal funding sources might discount duplicative applications from the same jurisdiction," he wrote. "This will become a particular acute issue as competitive grants begin to diminish in size and availability."

Elsewhere in the letter, which was obtained by The Inquirer, Agostini wrote, "There have been a number of instances where departments have not followed procedures established for reporting centrally on the city's Recovery efforts."

For instance, he said, the city Health Department submitted applications to the federal government for three research grants without the Recovery Office signing off. "Errors in reporting by one department might reflect badly on grant applications from other city departments and thereby diminish our chances of securing additional ARRA funds," he wrote.

Further demonstrating the confusion, Agostini, in an interview, admitted that chief among his challenges has been simply getting out the word that there is in fact a Recovery Office and one person - him - leading it.

Part of the perplexity stems from the administration's decision during the summer not to hire an outsider to run the office. In June, just a few months earlier, the administration had issued a request for proposals to hire such a person "to coordinate and report recovery efforts for the City."

Nutter's chief of staff, Clarence Armbrister, said yesterday "the respondents were not of the quality we wanted."

Instead, in September, Agostini was named to the position.

But in the interim, while Managing Director Camille Barnett had held meetings to review projects and funding applications with various department officials, there appeared to be uncertainty about who was in charge and what procedures were to be followed.

"I think it's better," Agostini said in the interview, "but there is still a lot of work to do."

That includes correcting the city's Web site. "I think people made mistakes about what was awarded vs. what was spent," he said.

Armbrister said Agostini's concerns in his letter reflected challenges typical in coordinating a large program across city departments. "I'm not sure we have done central grant management in the city for years," he said, noting individual departments have separate long-standing relationships with federal agencies.

While acknowledging that improvements can be made, Armbrister said, "I don't know the process we have gone through so far is ultimately detrimental. That remains to be seen."

Through Sept. 30, while the city has been awarded $158 million in stimulus funds, it has spent just $776,000, split between two grant recipients. (These figures don't include money that has been distributed to or from other Philadelphia agencies, such as SEPTA, the school district, and the Philadelphia Housing Authority.)

The substantial gap is largely due to award notices sent and received by the federal government, but a lag time in actual cash disbursements.

Other cities face a similar situation.

Through August, for instance, Baltimore was promised $310 million, but to date the city has spent only $1.3 million.

"The reality does not match the rhetoric about the pace of spending, and that in many respects, many of the federal agencies were wholly unprepared to move this amount of money this quickly and remain so today," said Jamie Kendrick, Baltimore's deputy transportation commissioner and one of two city officials charged with monitoring the stimulus funds.

"The problem is the local governments are the ones who catch the blame on this," he added.

Philadelphia City Council is concerned as well. And its interest grew when some of the few stimulus dollars that were spent - on a law enforcement-related grant that prevented 52 layoffs in the First Judicial District - appeared to have been distributed without Council's approval.

To get more information on the stimulus program, Councilman Darrell L. Clarke, chairman of the Fiscal Stability and Intergovernmental Cooperation Committee, scheduled a hearing today, with testimony expected from Agostini and other city agencies.

"At the end of the day," Clarke said, "we just don't know what's going on."

Contact staff writer Marcia Gelbart at 215-854-2338 or mgelbart@phillynews.com.