Recovery Act: One Year Later, States’ and Localities’ Uses of Funds and Opportunities to Strengthen Accountability

This report responds to two ongoing U.S. Government Accountability Office (GAO) mandates under the American Recovery and Reinvestment Act of 2009 (Recovery Act). It is the fifth in a series of reports since passage of the Recovery Act on the uses of and accountability for Recovery Act funds in 16 selected states, certain localities in those jurisdictions, and the District of Columbia (District). These jurisdictions are estimated to receive about two-thirds of the intergovernmental assistance available through the Recovery Act. It is also the second report in which GAO is required to comment on the jobs created or retained as reported by recipients of Recovery Act funds. As of February 12,2010, $88.7billion, or a little more than 30percent,of the approximately $282 billion of total Recovery Act funds for programs administered by states and localities had been paid out by the federal government. Of that amount, approximately $36 billion has been paid out since the start of federal fiscal year 2010. In brief, findings are as follows: Increased Medicaid Funding - As of January 29, 2010, the 16 states and the District have drawn down about $30 billion in increased Federal Medical Assistance Percentage (FMAP) funds, representing nearly 100 percent of these states’ grant awards for federal fiscal year 2009 and about 57 percent for the first and second quarters of federal fiscal year 2010. Most states reported that, without the increased FMAP funds, they could not have continued to support the substantial Medicaid enrollment growth they have experienced, most of which was attributable to children. Highway Infrastructure Investment and Transit Funding - As of February 16, 2010, the Federal Highway Administration (FHWA) had obligated $25.1 billion and the Federal Transit Administration (FTA) had obligated about $7.5 billion—combined about $32.6 billion (over 93 percent) of the $35 billion that the Recovery Act provided for highway infrastructure projects and public transportation. Nationwide, Recovery Act funding has been obligated for over 11,000 eligible highway projects. However, some requirements, such as the Recovery Act’s maintenance-of-effort requirement—which is designed to prevent states from substituting federal funds for state funds—have proven challenging. Many states have yet to complete a maintenance-of-effort certification that DOT finds fully acceptable, and this, coupled with states’ fiscal challenges, raises questions as to whether this requirement will achieve its intended purpose. Education - As of January 22, 2010, the 16 states and the District had drawn down, in total, about $13.3 billion (56 percent) from the State Fiscal Stabilization Fund (SFSF); $1.1 billion (17 percent) of Elementary and Secondary Education Act (ESEA) Title I, Part A funds; and $1.2 billion (17 percent) of Individuals with Disabilities Education Act (IDEA), Part B, Recovery Act funds available to them. Much of the Recovery Act education funds have been used to pay education staff, including teachers. Recipient Reporting - Progress was achieved in addressing some data quality and reporting issues identified in the first round; however data errors, reporting inconsistencies, and decisions by some recipients not to use the new job reporting guidance for this round compromise data quality and the ability to aggregate the data. Accountability - GAO has recommended that OMB adjust the Single Audit process to help mitigate the risks posed by Recovery Act funding. Although OMB has taken steps to implement our recommendations, these efforts do not yet fully address the significant risks over Recovery Act funds.


  • English

Media Info

  • Media Type: Web
  • Features: Appendices; Figures; Tables;
  • Pagination: 182p

Subject/Index Terms

Filing Info

  • Accession Number: 01155071
  • Record Type: Publication
  • Report/Paper Numbers: GAO-10-437
  • Files: TRIS
  • Created Date: Apr 13 2010 10:43AM