Colorado – May 26, 2010

The content below was excerpted from the Colorado Appendix (PDF, 35 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

Our work in Colorado included reviewing the state's use of Recovery Act funds and its experience reporting Recovery Act expenditures and results to federal agencies under Office of Management and Budget (OMB) guidance. We continued our review of several programs that we have been reviewing on an ongoing basis, including the State Fiscal Stabilization Fund (SFSF); Highway Infrastructure Investment; Individuals with Disabilities Education Act, as amended, (IDEA) Part B; and Elementary and Secondary Education Act of 1965, as amended, (ESEA) Title I, Part A. We also added two new programs to our review—the Clean Water and Drinking Water State Revolving Funds (SRF)—because the state received a sizable amount of funding for these programs and SRF projects have already been selected and are under construction. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-605SP.

As a result of past work determining that the state's system of internal controls is largely decentralized, we continued our efforts to understand state agencies' controls over Recovery Act funds. We reviewed controls over the IDEA Part B, and ESEA Title I, Part A programs, which are managed by the Colorado Department of Education (CDE); the Clean Water and Drinking Water SRFs, which are managed jointly by the Colorado Department of Public Health and Environment (CDPHE), the Colorado Water Resources and Power Development Authority (Authority), and the Department of Local Affairs; and the SFSF funds, which are managed by the Office of the Governor. We also asked state and local accountability organizations about their efforts to audit and review Recovery Act programs in the state.

In addition to reviewing state programs, interviewing state officials, and examining documents for these programs, we continued our visits to local governments to better understand their use of and controls over Recovery Act funds. All regions of Colorado are experiencing economic stress. We chose to visit two local governments, in part because of these localities' size, location, and unemployment rates. Specifically, we selected the city of Fort Collins because it has an unemployment rate lower than the state's average of 8.4 percent and it is a small city in north central Colorado. We also selected Grand Junction, a small city in western Colorado, because it has an unemployment rate of 10.3 percent, higher than the state average.

What We FoundBack to top

State Fiscal Stabilization Fund

Colorado has targeted most of the $760.2 million in SFSF funds it was allocated to programs that have had significant reductions in state funding, in particular, higher education and corrections. To date, most of the funds have been used to pay for staff at the state's institutions of higher education (IHE) and its corrections institutions. To receive the full amount of SFSF funds, the state was required to meet a set of education reform assurances and to gather certain data to show progress toward these reform areas. Because the state has identified problems with the data collection systems that CDE will use to gather the data, it may not have adequate systems in place to efficiently gather and report this data. The state's plan to update its data collection systems and improve their efficiency hinges in part on the state receiving an additional $400,000 in federal or private funds.

Highway Infrastructure Investment

As of the Recovery Act deadline of March 2, 2010, the Federal Highway Administration (FHWA) had obligated the state's apportionment in highway infrastructure funds. Colorado was apportioned $403.9 million of Recovery Act highway funds, of which $18.6 million was transferred from FHWA to the Federal Transit Administration (FTA) for transit projects in the state. As of May 3, 2010, the state had been reimbursed $127.7 million for work on its projects. The state has 102 projects for which bids have been advertised, and out of these projects, 92 contracts had been awarded as of March 31, 2010. The state has used the funds to replace seven bridges; construct or reconstruct about 90 miles of road; and resurface about 200 miles of highway.

Education programs

Spending of IDEA Part B, and ESEA Title I, Part A funds by local educational agencies (LEA) in Colorado has increased since we last reported in December 2009. As of April 1, 2010, Colorado had distributed 22 percent (more than $32.7 million) of IDEA Part B program funds and 20 percent ($22 million) of ESEA Title I, Part A funds to LEAs, as compared with 3 percent and 0.25 percent, respectively, distributed as of November 13, 2009. As they have been spending the Recovery Act funds, the LEAs are paying for teachers and training, among other costs.

Clean Water and Drinking Water State Revolving Funds

Colorado is using $32.3 million to fund drinking water projects and another $30.1 million to fund clean water projects throughout the state. A total of 34 water projects—22 drinking water projects and 12 clean water projects—are expected to improve water quality and assist multiple disadvantaged communities in the state. Eighteen of these projects are considered "green" projects and are expected to lead to increased water and energy efficiencies, largely through replacing leaky distribution pipelines and installing more efficient drives to control water processing at wastewater treatment plants. Colorado's SRF programs met the Recovery Act deadline of having all projects under contract by February 17, 2010, and exceeded it by having all projects under construction by that date as well.

State and local use of Recovery Act funds

The state has used Recovery Act funds to help balance its general fund budget after cutting $1.5 billion in expenditures in fiscal year 2010. As the funds run out in fiscal year 2011, however, state officials said they face challenges in managing the decline in funding. The two local governments we visited, Fort Collins and Grand Junction, experienced different degrees of assistance from the Recovery Act. Fort Collins received $28.6 million in grants, which is primarily allowing it to continue pursuing its energy efficiency goals. Grand Junction received $1.9 million, although it applied for $39.3 million in grants. Grand Junction officials said that they thought they received limited funding because grant applications requested unemployment data for 2007 to 2008, a period when the city's unemployment rate was significantly lower than it was when it applied for the grants in 2009.

Recipient reporting

Colorado's Recovery Act recipients reported roughly 10,300 jobs, by full-time equivalent (FTE) positions, paid for with Recovery Act funds during January through March 2010. The state reports centrally for state agencies, but not for local, private, or other entities in the state. While we noted some inconsistencies in the FTE figures for some of the agencies we reviewed, state officials said that they have taken steps to improve their data in subsequent rounds. However, officials are concerned that continued changes to the recipient reporting process—specifically, limiting the period for state review of data—will potentially decrease the state's ability to ensure the quality of the data it reports.


In addition to our work reviewing Recovery Act funds, the accountability community in Colorado has identified weaknesses in internal controls over some Recovery Act programs in the state. In particular, the State Auditor recently identified significant internal control deficiencies at the Colorado Department of Human Services' Colorado Child Care Assistance Program. Specifically, the audit found errors on expenditure statements because the program lacked adequate written procedures and supervisory review, and did not provide adequate training. The department agreed with the results and has taken steps to correct the deficiencies.

Full May ReportBack to top

Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
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