Arizona – July 8, 2009

The content below was excerpted from the Arizona Appendix (PDF, 45 pages) of GAO's second bimonthly review of the Recovery Act.[1]


Use of Funds

Our work in Arizona focused on eight federal programs, selected primarily because they have begun disbursing funds to states and includes existing programs receiving significant amounts of Recovery Act funds or significant increases in funding. Program funds are being directed to helping Arizona stabilize its budget and support local governments, particularly school districts, and are being used to expand existing programs. Funds from some of these programs are intended for disbursement through states or directly to localities. The funds include the following:

Funds Made Available as a Result of Increased Medicaid Federal Medical Assistance Percentage (FMAP)

As of June 29, 2009, Arizona has received about $535 million in increased FMAP grant awards, of which it has drawn down about $513 million, or 96 percent. Arizona officials said the funds made available as the result of increased FMAP are critical in helping Arizona maintain its core Medicaid program and avoid systematic reductions in funding for other programs, such as the State Children’s Health Insurance Program. Arizona is also planning on using state funds freed up as a result of the increased FMAP to offset the state budget deficit.[2]

Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s Federal Highway Administration apportioned $522 million in Recovery Act funds to Arizona. As of June 25, 2009, $262 million has been obligated for highway projects. Arizona’s Department of Transportation and Arizona’s Federal Highway Administration worked together to identify a priority list of transportation infrastructure projects that could be started quickly. ADOT has awarded 24 contracts for Recovery Act highway projects, largely involving pavement preservation, shoulder widening, and road repair. As of June 25, 6 highway projects funded with Recovery Act dollars have begun construction. For example, the initial project under construction near Prescott involves making safety improvements and repairs to the roadway.

U.S. Department of Education State Fiscal Stabilization Fund (SFSF)

The U.S. Department of Education has awarded Arizona about $832 million, or about 81.8 percent of its total SFSF allocation of $1.017 billion. Arizona has not drawn down any of the funds as of June 30, 2009.  Arizona is planning to use a portion of these funds to offset budget cuts, in such areas as education. For example, the state has allocated, for fiscal year 2009, $250 million to be used for the K-12 program, and $183 million for community colleges and universities. Remaining funds will be used for education, public safety, or other government services.

Title I, Part A, of the Elementary and Secondary Education Act (ESEA) of 1965

The U.S. Department of Education has awarded Arizona about $97.5 million in Recovery Act ESEA Title I, Part A, funds, or 50 percent of its total allocation of $195 million. Of these funds, Arizona has allocated to state local education agencies (LEA) about $185 million. As of June 30, 2009, the state education agency had approved 24 applications for about $6.7 million. The schools are encouraged to use the funds in ways that will build their long-term capacity to service disadvantaged youth, such as through providing professional development of teachers. For example, a school will acquire an instructional data system, which integrates curriculum mapping, assessment, reporting, and analysis tools, to identify trends in student learning and make improvements in classroom instruction, and contract for a system coordinator.

Individuals with Disabilities Education Act (IDEA), Parts B and C

The U.S. Department of Education has allocated about $194 million in Recovery Act IDEA, Part B and C funds to Arizona.  The Arizona Department of Education will receive about $184 million in IDEA Part B funds and the Department of Economic Security will receive about $10 million in IDEA Part C funds.  On April 1, 2009, the U.S. Department of Education made available about 50 percent of the total allocation.  The Arizona Department of Education has allocated about $178 million and about $6 million to state LEAs and preschools, respectively, in Part B funds.  On June 22, 2009, Arizona opened the grant application process to support special education and related services for infants, toddlers, children, and youth with disabilities. For example, LEAs plan to use the funds to provide teachers with coaching services for improving behavior management skills, and initiate an in-school program for students with autism and another for medically fragile students.

Weatherization Assistance Program

The U.S. Department of Energy allocated about $57 million in Recovery Act weatherization funding to Arizona for a 3-year period. Based on information available on June 30, 2009, Arizona has received $28.5 million in weatherization funds.  Arizona is using the initial funding allocation of $5.7 million to hire and train program staff and has received an additional $22.8 million of the Recovery Act weatherization funds. Arizona intends to use this money to begin to weatherize at least 6,400 homes.

Edward Byrne Memorial Justice Assistance Grants

The U.S. Department of Justice’s Bureau of Justice Assistance has awarded $25.3 million directly to Arizona in Recovery Act funding. Based on information available as of June 30, 2009, about $23.1 million (91 percent) of these funds have been obligated by the Arizona Criminal Justice Commission, which administers these grants for the state.[3] These funds coming to the state are being used mostly to supplement current state law enforcement and criminal justice efforts. For example, 36 projects have been approved for funding in such areas as drug forensics, drug and gang prosecution, rural law enforcement, and information sharing initiatives.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development has allocated about $12 million in Recovery Act funding to 15 public housing agencies in Arizona. Based on information available as of June 20, 2009, about $1.7 million (14 percent) had been obligated by 11 of those agencies. At the five public housing authorities we visited, this money, which flows directly to the authorities, is being used for various capital improvements. For example, two projects underway in Tucson are using the funding to repair asphalt, to do roof repairs, and to remodel a kitchen and bathroom and to replace the hot water and air-conditioning units.

Safeguarding & TransparencyBack to top

Arizona has enhanced its accounting system to track Recovery Act funds by adding new accounting codes in order to segregate and track these funds separately from other funds that will flow through the state government. Arizona’s General Accounting Office has issued guidance to state agencies on their responsibilities, including how they are to receive, disburse, tag or code funds in their accounting systems; track funds separately; and, to some extent, report on these federal resources. State department heads and program officials generally expect that they will also require subrecipients, through agreements, grant applications, and revised contract provisions, to track and report Recovery Act funding separately. The state comptroller and the state chief information officer are devising a methodology to integrate information gathered across the state agencies with the data in the state’s accounting system, the Arizona Financial Information System, into an overall database or data warehouse for reporting on the use of Recovery Act funds for the entire state. Although the state has not completed a separate risk assessment for these funds, the state is in the process of administering a survey asking state agencies for a self-assessment of their internal controls that includes a risk assessment, to help safeguard Recovery Act resources.

Assessing the Effects of SpendingBack to top

Arizona agencies have begun collecting information on jobs created and preserved, although different kinds of information are being submitted across programs. On June 22, 2009, OMB issued implementing guidance clarifying how states are to report the number of jobs created and preserved under the Recovery Act.  Existing programs that are receiving Recovery Act funds are continuing to measure some results beyond jobs—such as program outcomes—through their existing program evaluations, but some programs are still awaiting guidance for how to assess outcomes from federal programs.

Full July ReportBack to top

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses
Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses (Appendixes)
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services. The receipt of this increased FMAP may reduce the funds that states would otherwise have to use for their Medicaid program, and states have reported using these available funds for a variety of purposes.
  • [3] We did not review Edward Byrne Memorial Justice Assistance Grants awarded directly to local governments in this report because the Bureau of Justice Assistance’s solicitation for local governments closed on June 17; therefore, not all of these funds have been awarded.
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