Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that revisits the various methodologies used in determining the weatherization work that should be performed based on the consideration of cost-effectiveness and develops standard methodologies that ensure that priority is given to the most costeffective weatherization work. To validate any methodologies created, this effort should include the development of standards for accurately measuring the long-term energy savings resulting from weatherization work conducted.

Agency Affected: Department of Energy

Status: Open

Comments: With regard to our recommendation on developing and clarifying guidance for prioritizing cost-effective weatherization work, DOE has taken some actions. For example, DOE contracted with the Oak Ridge National Laboratory in 2010 to conduct an assessment of aspects of program performance such as costs and benefits for program years 2008-2010. The assessment will cover both Recovery Act funds and annual appropriation funds. Preliminary results may be available in late spring 2011.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that considers and addresses how the weatherization program guidance is impacted by the introduction of increased amounts of multifamily units.

Agency Affected: Department of Energy

Status: Closed - Implemented

Comments: DOE officials identified several issues that impact the increased number of multi-family buildings to be weatherized and issued several guidance documents addressing multi-family buildings. For example, DOE issued Weatherization Program Notice 11-1, Program Year 2011 Weatherization family units. One section covered the eligibility of multi-family units for the weatherization program and the other section provided guidance on conducting energy audits on multi-family units. In reviewing the recently issued program guidance for this recommendation, we have concluded that DOE addressed the intent of these recommendations.

Recommendation: The EPA Administrator should work with the states to implement specific oversight procedures to monitor and ensure subrecipients' compliance with the provisions of the Recovery Act-funded Clean Water and Drinking Water SRF program.

Agency Affected: Environmental Protection Agency

Status: Closed - Implemented

Comments: EPA provided additional guidance to the states regarding their oversight responsibilities, with an emphasis on enhancing site specific monitoring and inspections. Specifically, in June 2010, the agency developed and issued an oversight plan outline for Recovery Act projects that provided guidance on the frequency, content, and documentation related to regional reviews of state Recovery Act programs and regional and state reviews of specific Recovery Act projects. EPA regions have reviewed all 50 states' Clean and Drinking Water SRF programs at least once since the Recovery Act was enacted, and have generally carried out the oversight instructions in EPA's plan. For example, regional officials reviewed files with state documents and information to ensure proper controls over Davis-Bacon, Buy American, and other Recovery Act requirements. Regional staff also visited one drinking water project in every state, but did not meet this goal for clean water projects due to time and budget constraints. EPA headquarters officials have been reviewing the regions' performance evaluation reports for states, and the officials said that they implemented a 60-day time frame for completing these reports. In the nine states that GAO reviewed, program officials described their site visits to projects and the use of the EPA inspection checklist (or state equivalent), according to EPA's oversight plan. State officials said they visit their Recovery Act projects at least once during construction and sometimes more frequently depending on the complexity of the project. We consider these agency actions to have addressed our recommendation.

Recommendation: To provide grantees with appropriate guidelines on their use of Head Start and Early Head Start grant funds, and enable OHS to monitor the use of these funds, the Director of OHS should direct regional office staff to stop allocating all grant funds to the "other" budget category, and immediately revise all financial assistance award (FAA) documents in which all funds were allocated to the "other" category.

Agency Affected: Department of Health and Human Services: Administration for Children and Families: Office of Head Start

Status: Closed - Implemented

Comments: Since our May report, OHS revised all FAAs that had designated all of a grantee's awarded funds to the "other" budget category rather than more specific budget categories, such as "supplies" or "equipment." Further, OHS did not issue any FAAs that designated all funds to "other."

Recommendation: To facilitate understanding of whether regional decisions regarding waivers of the program's matching requirement are consistent with Recovery Act grantees' needs across regions, the Director of OHS should regularly review waivers of the nonfederal matching requirement and associated justifications.

Agency Affected: Department of Health and Human Services: Administration for Children and Families: Office of Head Start

Status: Closed - Implemented

Comments: HHS reports that it has taken actions to address our recommendation. For example, HHS reports that the Office of Head Start has conducted a review of waivers of the nonfederal matching requirement and tracked all waivers in the Web-based data system. HHS further reports that OHS has determned that they are reasonably consistent across regions.

Recommendation: To oversee the extent to which grantees are meeting the program goal of providing services to children and families and to better track the initiation of services under the Recovery Act, the Director of OHS should collect data on the extent to which children and pregnant women actually receive services from Head Start and Early Head Start grantees.

Agency Affected: Department of Health and Human Services: Administration for Children and Families: Office of Head Start

Status: Open

Comments: The Department of Health and Human Services (HHS) disagreed with our recommendation. OHS officials stated that attendance data are adequately examined in triennial or yearly on-site reviews and in periodic risk management meetings. Because these reviews and meetings do not collect or report data on service provision, we continue to believe that tracking services to children and families is an important measure of the work undertaken by Head Start and Early Head Start service providers.

Recommendation: In order to increase the likelihood that HFAs will comply with Treasury's requirements for recapturing funds, the Secretary of the Treasury should define what it considers appropriate actions by HFAs (Housing Financing Agencies) to recapture funds in order to avoid liability when they are unable to collect funds from project owners that do not comply.

Agency Affected: Department of the Treasury

Status: Closed - Implemented

Comments: Treasury agreed with our recommendation and in response to our recommendation, Treasury provided additional guidance to state HFAs to clarify what constitutes appropriate actions by HFAs to recapture funds in order to avoid liability in the event of project owner noncompliance. Specifically, in August 2010, the agency developed and issued a Recapture Guidance for Recovery Act projects that receive Section 1602 Program funds that defines a recapture event, specifies the amount of funds owed in the event of recapture, describes an HFA's obligation and responsibilities in avoiding project owner noncompliance, sets forth the kinds of recapture actions an HFA may take in the event of noncompliance, and directs HFAs on how to report noncompliance.

Recommendation: The Director of OMB should issue Single Audit guidance in a timely manner so that auditors can efficiently plan their audit work.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: Open

Comments: With regard to issuing Single Audit guidance in a timely manner, and specifically the OMB Circular A-133 Compliance Supplement, we previously reported that OMB officials intended to issue the 2011 Compliance Supplement by March 31, 2011. In December 2010, OMB provided to the American Institute of Certified Public Accounts (AICPA) a draft of the 2011 Compliance Supplement which the AICPA published on its Web site. In January 2011, OMB officials reported that the production of the 2011 Compliance Supplement was on schedule for issuance by March 31, 2011. OMB issued the 2011 Compliance Supplement on June 1, 2011. We spoke with OMB officials regarding the reasons for the delay of this important guidance to auditors and the expected issuance date of the 2011 Compliance Supplement. OMB officials stated its efforts were refocused toward priorities relating to the expiration of several continuing resolutions that temporarily funded the federal government for fiscal year 2011, and the Department Of Defense And Full-Year Continuing Appropriations Act, 2011, which was passed by the Congress in April 2011, averting a governmentwide shutdown. OMB officials stated that, as a result, although they had taken steps to issue the 2011 Compliance Supplement by the end of March, such as starting the process earlier in 2010 and giving agencies strict deadlines for program submissions, they were only able to issue it on June 1, 2011. We will continue to monitor OMB's progress to achieve this objective.

Recommendation: To ensure that the public has accurate information regarding economically distressed areas, the Secretary of Transportation should direct FHWA to issue guidance to the states advising them to update information in the Recovery Act Data System to reflect current DOT decisions concerning the special-need criteria. Projects in areas currently lacking documentation that it meets the criteria to be designated as economically distressed should be reported as a project in a noneconomically distressed area.

Agency Affected: Department of Energy

Status: Closed - Implemented

Comments: In July 2010, FHWA directed Arizona, California, and Illinois to revise their designations and to report these projects as being in noneconomically distressed areas. FHWA also directed all states to ensure that future Recovery Act Data System entries be coded as economically distressed only if FHWA division and headquarters offices had approved the designation.

Recommendation: Given that state and local agencies have felt pressure to meet a large increase in production targets while effectively meeting program requirements and have experienced some confusion over production targets, funding obligations, and associated consequences for not meeting production and funding goals, that DOE should clarify its production targets, funding deadlines, and associated consequences while providing a balanced emphasis on the importance of meeting program requirements.

Agency Affected: Department of Energy

Status: Open

Comments: DOE has taken steps to address this recommendation. According to officials, DOE has communicated directly with recipients about funding, production, and other priorities. For example, the Green Light program is in its fourth round of communications between two DOE offices and recipients. DOE officials cited these calls as assisting in the identification of barriers preventing grantees from increasing production and expenditures. In addition, DOE officials stated that grantees were notified of the requirement to spend all Recovery Act funds by March 31, 2012. However, DOE provided no evidence that it has clarified the consequences.

Recommendation: The Director of OMB should explore alternatives to help ensure that federal awarding agencies provide their management decisions on the corrective action plans in a timely manner.

Agency Affected: Environmental Protection Agency

Status: Open

Comments: In October 2010, OMB officials stated that, based on their assessment of the results of the project, they had discussed alternatives for helping to ensure that federal awarding agencies provide their management decisions on the corrective action plans in a timely manner, including possibly shortening the time frames required for federal agencies to provide their management decisions to grant recipients. However, OMB officials have yet to decide on the course of action that they will pursue to implement this recommendation. OMB officials acknowledged that the results of the 2009 OMB Single Audit Internal Control Project confirmed that this issue continues to be a challenge. They stated that they have met individually with several federal awarding agencies that were late in providing their management decisions in the 2009 project to discuss the measures that the agencies will take to improve the timeliness of their management decisions. Preliminary observations of the results of the second project have identified that several federal awarding agencies' management decisions on the corrective actions that were due April 30, 2011, have also not been issued in a timely manner.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that sets time frames for development and implementation of state monitoring programs.

Agency Affected: Department of Energy

Status: Open

Comments: To develop and clarify guidance to set time frames for development and implementation of state monitoring programs, DOE has taken limited action. DOE officials provided current guidance available on state monitoring efforts but did not identify any time frames for development or implementation of state monitoring programs.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that develops a best practice guide for key internal controls that should be present at the local weatherization agency level to ensure compliance with key program requirements.

Agency Affected: Department of Energy

Status: Open

Comments: DOE distributed a memorandum dated May 13, 2011, to grantees reminding them of their responsibilities to ensure compliance with internal controls and the consequences of failing to do so. This memo is currently under internal review and DOE anticipated it will be released in May 2011.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that accelerates current DOE efforts to develop national standards for weatherization training, certification, and accreditation, which is currently expected to take 2 years to complete.

Agency Affected: Department of Energy

Status: Open

Comments: According to DOE officials, DOE is making progress toward advancing national standards. For example, DOE and the Department of Labor released the draft "Workforce Guidelines for Home Energy Upgrades" for single-family homes in November 2010. DOE officials expect to finalize the guidelines by spring 2011.

Recommendation: To better understand the impact of Recovery Act investments in transportation, we believe that the Secretary of Transportation should ensure that the results of these projects are assessed and a determination made about whether these investments produced long-term benefits. Specifically, in the near term, the Secretary should direct the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA) to determine the types of data and performance measures they would need to assess the impact of the Recovery Act and the specific authority they may need to collect data and report on these measures.

Agency Affected: Department of Transportation

Status: Open

Comments: In its response, DOT noted that it expected to be able to report on Recovery Act outputs, such as the miles of road paved, bridges repaired, and transit vehicles purchased, but not on outcomes, such as reductions in travel time, nor did it commit to assessing whether transportation investments produced long-term benefits. DOT further explained that limitations in its data systems, coupled with the magnitude of Recovery Act funds relative to overall annual federal investment in transportation, would make assessing the benefits of Recovery Act funds difficult. DOT indicated that, with these limitations in mind, it is examining its existing data availability and, as necessary, would seek additional data collection authority from Congress if it became apparent that such authority was needed. DOT plans to take some steps to assess its data needs, but it has not committed to assessing the long-term benefits of Recovery Act investments in transportation infrastructure. We are therefore keeping our recommendation on this matter open.

Recommendation: To ensure housing agencies use the correct job calculation, the Secretary of HUD should clearly emphasize to housing agencies that they discontinue use of the outdated jobs calculator provided by HUD in the first round of recipient reporting.

Agency Affected: Department of Housing and Urban Development

Status: Closed - Implemented

Comments: In response to our recommendation, HUD sent an e-mail to housing agencies on June 30, 2010, that explicitly instructed them not to use the outdated jobs-counting calculator, as it was not correctly computing the FTE calculation per updated OMB guidance. This e-mail also included a link to HUD's new online jobs-counting calculator and instructed housing agencies to use this calculator for the July and all future reporting periods.

Recommendation: To help clarify the recipient reporting responsibilities of housing agencies and to improve the consistency and completeness of jobs data reported by housing agencies, the Secretary of HUD should issue guidance that explains when full time equivalents (FTE) attributable to subcontractors should be reported by the prime recipient.

Agency Affected: Department of Housing and Urban Development

Status: Closed - Implemented

Comments: In response to our recommendation, HUD notified housing agencies in a June 30, 2010, e-mail that it had developed additional guidance for housing agencies to use when determining whether prime recipients should report FTEs for subcontractors and provided a link to the guidance on its Web site. The guidance noted that housing agencies should include Recovery Act-funded hours that contractors and subcontractors worked as part of their FTE calculation.

Recommendation: To ensure that FTEs are properly accounted for over time, the Secretary of the Department of Education should clarify how local educational agencies (LEA) and institutions of higher education (IHE) should report FTEs when additional Recovery Act funds are received in a school year and are reallocated to cover costs incurred in previous quarters, particularly when the definite term methodology is used.

Agency Affected: Department of Education

Status: Closed - Implemented

Comments: On August 26, 2010 U.S. Department of Education issued clarifying guidance that addressed our recommendation.

Recommendation: To ensure that subrecipients do not underreport vendor FTEs directly paid with Recovery Act funds, the Secretary of the Department of Education should re-emphasize the responsibility of subrecipients to include hours worked by vendors in their quarterly FTE calculations to the maximum extent practicable.

Agency Affected: Department of Education

Status: Closed - Implemented

Comments: On August 26, 2010 the U.S. Department of Education released clarifying guidance that addressed our recommendation.

Recommendation: To improve consistency in how FTEs generated using the definite term are calculated, the Secretary of the Department of Education and the Director of OMB should clarify whether IHE and LEA officials using this methodology should include the cost of benefits in their calculations.

Agency Affected: Department of Education

Status: Closed - Implemented

Comments: On August 26, 2010 the U.S. Department of Education issued clarifying guidance that addressed our recommendation.

Recommendation: To enhance Labor's ability to manage its Recovery Act and regular WIA formula grants and to build on its efforts to improve the accuracy and consistency of financial reporting, the Secretary of Labor should determine the extent and nature of reporting inconsistencies across the states and better target technical assistance, conduct a one-time assessment of financial reports that examines whether each state's reported data on obligations meet Labor's requirements.

Agency Affected: Department of Labor

Status: Open

Comments: Labor agreed with our recommendation and has begun to take some actions to implement it. To determine the extent of reporting inconsistencies, Labor awarded a contract in September 2010 to perform an assessment of state financial reports to determine if the data reported are accurate and reflect Labor's guidance on reporting of obligations and expenditures. Since then, Labor has completed interviews with all states and is preparing a report of the findings.

Recommendation: To enhance Labor's ability to manage its Recovery Act and regular WIA formula grants and to build on its efforts to improve the accuracy and consistency of financial reporting, the Secretary of Labor should enhance state accountability and to facilitate their progress in making reporting improvements, routinely review states' reporting on obligations during regular state comprehensive reviews.

Agency Affected: Department of Labor

Status: Open

Comments: Labor agreed with our recommendation and has begun to some actions to implement it. To enhance states' accountability and facilitate their progress in making improvements in reporting, Labor has drafted guidance on the definitions of key financial terms such as "obligations," which is currently in final clearance. After the guidance is issued, Labor plans to conduct a systemwide webinar and interactive training on this topic to reinforce how accrued expenditures and obligations are to be reported.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that establishes best practices for how income eligibility should be determined and documented and issues specific guidance that does not allow the self-certification of income by applicants to be the sole method of documenting income eligibility.

Agency Affected: Department of Energy

Status: Closed - Implemented

Comments: In response to our recommendation on issuing guidance and establishing best practices to determine income eligibility, DOE issued guidance--"Weatherization Program Notice 10-18, 2010 Poverty Income Guidelines and Definition of Income"--on September 20, 2010. In this guidance, DOE clarified the definition of income and strengthened income eligibility requirements. For example, the guidance clarified that self-certification of income would only be allowed after all other avenues of documenting income eligibility are exhausted. Additionally, for individuals to self-certify income, a notarized statement indicating the lack of other proof of income is required.

Recommendation: Given the concerns we have raised about whether program requirements are being met, DOE should, in conjunction with both state and local weatherization agencies, develop and clarify weatherization program guidance that clarifies the specific methodology for calculating the average cost per home weatherized to ensure that the maximum average cost limit is applied as intended.

Agency Affected: Department of Energy

Status: Open

Comments: To clarify the methodology for calculating the average cost per home, DOE has developed draft guidance to help grantees develop consistency in their average cost per unit calculations. The guidance further clarifies the general cost categories that are included in the average cost per home. DOE anticipates issuance of the guidance in June 2011.

Recommendation: To provide housing finance agencies (HFA) with greater tools for enforcing program compliance, in the event the Section 1602 Program is extended for another year, Congress may want to consider directing Treasury to permit HFAs the flexibility to disburse Section 1602 Program funds as interest-bearing loans that allow for repayment.

Agency Affected: Department of Energy

Status: Open

Comments: We continue to believe that Congress should consider directing Treasury to permit HFAs the flexibility to disburse Section 1602 Program funds as interest-bearing loans that allow for repayment.