California – December 10, 2009
What We Did
GAO’s work in California included reviewing three specific programs funded under the Recovery Act—Highway Infrastructure Investment funds, Transit Capital Assistance Program, and Weatherization Assistance Program. These programs were selected primarily because they are in the process of obligating Recovery Act funds in California. Our work focused on the status of the programs’ funding, how funds are being used, and issues that are specific to each program. In addition to these programs, we updated information on three Recovery Act education programs with significant funds being disbursed—the State Fiscal Stabilization Fund (SFSF) and Recovery Act funds for Title I, Part A of the Elementary and Secondary Education Act of 1965 (ESEA), as amended, and Part B of the Individuals with Disabilities Education Act (IDEA), as amended. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-232SP.
We also met with the California Recovery Act Task Force (Task Force) to understand the state’s experience in meeting Recovery Act reporting requirements and preparing the state’s quarterly report in October 2009. In addition, we visited two California local governments to discuss the amount of Recovery Act funds each is receiving directly from federal agencies and to learn how those funds are being used. We chose to visit the city of Los Angeles and the county of Sacramento. We selected Los Angeles because it is Southern California’s most populous city, with an unemployment rate above the state’s average of 12.0 percent. We selected the county of Sacramento because it is located in Northern California’s central valley, encompasses the State Capitol, and also has an unemployment rate above the state average.
What We Found
Highway Infrastructure Investment
As of October 31, 2009, the U.S. Department of Transportation (DOT) Federal Highway Administration (FHWA) has obligated $2.079 billion of the $2.570 billion apportioned to California in Recovery Act funds and $90 million had been reimbursed by FHWA. The majority of these projects involve pavement widening and improvement projects, but the state is also using highway infrastructure funds for numerous safety and transportation enhancement projects. California has awarded contracts for 364 projects worth $1.647 billion and advertised an additional 119 projects for bid. Overall, 90 percent of Recovery Act contracts are being awarded for less than the state engineer’s estimated costs and the California Department of Transportation (Caltrans) plans to request FHWA obligate excess funds for additional highway projects. While the pace of federal outlays for California highway projects continues to be slower than the national average, the amount reimbursed grew from $22 million in September to $90 million as of October 31, 2009, and officials expect it to increase in the near future as a number of large state highway projects are under way.
Transit Capital Assistance Program
As of November 5, 2009, DOT’s Federal Transit Administration (FTA) has obligated $916 million of the $1.002 billion in Transit Capital Assistance Program Recovery Act funds apportioned to California and urbanized areas in the state for transit projects. Transit agencies in California are using Transit Capital Assistance Program Recovery Act funds for preventive maintenance, vehicle purchases and rehabilitation, equipment replacement, and large capital projects. The transit agencies we visited, the San Francisco Municipal Transportation Agency (SFMTA) and the San Diego Association of Governments (SANDAG), are in the process of awarding contracts for Recovery Act funded projects and are using Transit Capital Assistance Program Recovery Act funds for a variety of capital projects, which otherwise might not have been funded until future fiscal years.
Selected Education Programs
As of October 31, 2009, California has distributed about $3.2 billion in Recovery Act funding to local education agencies (LEA), and special education local plan areas through three education programs. This includes SFSF education stabilization funds ($2.5 billion), ESEA Title I, Part A funds ($463 million), and IDEA, Part B funds ($269 million). California LEAs are generally using Recovery Act funding to retain jobs for teachers, teacher aides, and other staff, as well as for training and purchasing instructional materials and equipment. However, as we have previously reported, Recovery Act funding was distributed to some LEAs prior to their being ready to spend it, and the concerns we raised in our previous reports about cash management, including the appropriate process for calculating interest on federal cash balances, have yet to be fully resolved.
Weatherization Assistance Program
California awarded almost $57 million to 35 local service providers throughout the state for Recovery Act weatherization activities. The state has required service providers to adopt an amendment to their Recovery Act weatherization contracts to ensure that they comply with Recovery Act requirements before they are provided Recovery Act funds to weatherize homes. Most service providers did not adopt the amendment by the October 30 deadline, due to ongoing negotiations with the state regarding concerns about some amendment provisions. On October 30, the state announced it would issue a modified amendment within 30 days incorporating changes agreed upon by the state and service providers. As of November 10, no homes in California had been weatherized with Recovery Act funds.
Task Force officials believe that, using their centralized reporting system, they successfully reported jobs created or retained as a result of Recovery Act funds received through state agencies, but faced several challenges in doing so. One such challenge related to differing interpretations of federal guidance on jobs reporting, which resulted in variations in the number of jobs reported. On behalf of the Task Force, the state’s Chief Information Officer (CIO) was responsible for collecting the data from state agencies, validating it, and uploading the data to www.federalreporting.gov (FederalReporting.gov).
Localities’ Use of Recovery Act Funds
Los Angeles City and Sacramento County reported using Recovery Act funds to preserve the delivery of essential local government services. For example, Los Angeles has been awarded $178.6 million in Recovery Act grants and Sacramento $21.0 million that are funding airport improvement, anticrime programs, art agencies, community development projects, community policing, diesel emission reduction, energy efficiency projects, homelessness and foreclosure relief, port security, purchases of buses, and public housing rehabilitation. According to officials in both localities, activities funded with Recovery Act funds will not require ongoing financial support after the funds are spent.
Full December ReportBack to top
- Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 168 pages) Accessible Text
- Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability (Appendixes)
- Summary (HTML) Full Report (PDF, 348 pages) Accessible Text
-  Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).