Colorado – September 20, 2010

The content below was excerpted from the Colorado Appendix (PDF, 47 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 the State Fiscal Stabilization Fund (SFSF) and added two new programs to our review–the State Energy Program and the Energy Efficiency and Conservation Block Grant (EECBG) program, both managed by the Department of Energy (DOE). For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-1000SP. 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 that had received an EECBG grant on the basis of each locality's size, location, and unemployment rate. Specifically, we selected the City of Colorado Springs, the second largest city in Colorado, which has an unemployment rate of 8.9 percent, higher than the state's average of 8.3 percent. We also selected Weld County, a rural county in northern Colorado, which has an unemployment rate of 9.6 percent. Furthermore, we asked state and local accountability organizations about their efforts to audit and review Recovery Act programs in the state.

During this round, we also followed up on contracts that we selected and reviewed in previous rounds and spoke to officials about whether there were cost or schedule changes and whether there were any contractor performance issues.[2] We selected 13 contracts on the basis of the state programs we have reviewed and reported on previously and the contract's dollar value. We interviewed contract administrators for several state agencies, including the Colorado Department of Transportation (CDOT), the Governor's Energy Office (GEO), three water utilities that provide drinking water and wastewater services, two transit authorities, and two housing authorities.

In addition, we continued our efforts to understand state and local entities' reporting on Recovery Act funds. Under the Recovery Act and OMB's related guidance, recipients are required to report to on the number of full-time equivalent (FTE) positions paid for with Recovery Act funds. We reviewed FTEs reported by the Colorado Department of Education (CDE) for certain education programs; the Colorado Water Resources and Power Development Authority (Authority), the Colorado Department of Public Health and Environment (CDPHE), and the Department of Local Affairs (DOLA) for Clean Water and Drinking Water State Revolving Funds (SRF); the Governor's office for SFSF funds; and GEO, Weld County, and Colorado Springs for the energy programs.

What We FoundBack to top

State Fiscal Stabilization Fund

During fiscal year 2011, Colorado plans to use $89.2 million–the remainder of the $621.9 million of SFSF education stabilization funds allocated to it–to support higher education. However, the level of support provided will be significantly diminished, given the lessened amount of SFSF funds remaining. Overall, the amount of state spending on higher education will be reduced for the first time in 3 years. The state also has $6.2 million that remain unallocated of the $138.3 million of SFSF government services funds it received. As of August 15, 2010, the state had not determined how it will spend these remaining funds. Since our last report, the state has continued to refine its plan for monitoring the use of SFSF funds and plans to have its first round of monitoring completed in mid-October 2010. It has also received additional federal funding to improve its data systems to track key SFSF data.

State Energy Program

Colorado received $49 million in State Energy Program funds to spend in 3 years–a significant infusion that increased the state's annual funding for that program, which totaled only $1.5 million in 2009. GEO is using the funds to remove financing, information, and access barriers to the deployment of energy efficiency and renewable energy across the state and develop a sustainable infrastructure to support the renewable and energy efficiency industry in Colorado, which the Governor calls the "New Energy Economy." More than a year after receiving its Recovery Act award, Colorado had obligated more than 80 percent of its funds to pay for various energy efficiency and renewable energy activities and had spent nearly 20 percent of its funds, but had not yet reported energy savings because these projects have only begun to be implemented. The state has supplemented existing program controls to oversee the use of these funds.

Energy Efficiency and Conservation Block Grant

In addition to State Energy Program funds, DOE awarded almost $43 million in EECBG funds directly to state and local governments, as well as Native American tribes, in Colorado for them to develop and implement projects to improve energy efficiency and reduce energy use and fossil fuel emissions in their communities. The three recipients we reviewed–GEO, Colorado Springs, and Weld County–varied in the amount of funds they had obligated as of August 15, 2010, yet all expect to meet their deadlines for obligating and spending funds. The state has modified existing controls from other energy programs to provide internal controls over EECBG funds, but local recipients reported startup problems, such as interpreting a large amount of guidance from multiple sources, that still need resolution with DOE. While it is too early to know the long-term energy benefits of the program, GEO and the local recipients have started to report jobs information.


State and local entities in Colorado have awarded a number of contracts under the Recovery Act for a variety of programs, including transportation, housing, weatherization, and drinking water and wastewater management. Of the 13 contracts we reviewed, which had a total value of about $61.4 million, contract oversight officials said that 7 have experienced a change in either cost or schedule. In some instances, the contract changes were the result of savings from lower than anticipated contract costs or the receipt of additional Recovery Act funds. Two of these 7 contracts also experienced issues with contractor performance. The remaining 6 contracts, according to officials, did not have changes or performance issues.

State and local budgets

The state expects to use about $400 million in Recovery Act funds–specifically the increased Federal Medical Assistance Percentage (FMAP) and SFSF funds–to help offset continued cuts to its fiscal year 2011 budget. However, these remaining funds are significantly less than the $800 million in Recovery Act funds the state applied to its budget in fiscal year 2010, which also included funding for the state Department of Corrections. For the two local governments we visited–Weld County and the City of Colorado Springs–the Recovery Act funds they received did not help balance their budgets, but will help them maintain some services and complete needed projects. For example, although Colorado Springs cut $90 million from its budgets beginning in fiscal year 2008, Recovery Act funds allowed the city to maintain service on bus routes in 2010 that it otherwise would have cut.

Recipient reporting

According to state officials, the state's central reporting process worked smoothly during the fourth round of Recovery Act reporting, covering April 1, 2010, through June 30, 2010, although our work reviewing recipient reports indicates the need for a corrections process. Colorado recipients, including agencies that reported centrally and local entities that reported directly, reported a total of about 17,790 FTEs funded by the Recovery Act for the fourth reporting period.[3] The state's FTEs increased by more than 7,530 over the previous period largely because of an influx of $205 million in SFSF phase II funding in April 2010. Because of a change to reporting guidance and because funding was received late in the year, the state did not report all FTEs associated with SFSF phase II funds in the fourth period. As a result, the state will need to adjust FTEs it reported in the January through March 2010 reporting period. In addition, through our review of recipient reports, we found that data quality is still a concern at some other state agencies and local entities, also demonstrating the need for a corrections process.


The Colorado audit community is continuing to conduct reviews of Recovery Act projects and uses of funds, both as part of larger reviews and as specific program audits. Specifically, Colorado auditors have issued 13 audit reports and 2 non-audit services that contained findings related to Recovery Act programs, an increase of 6 reports since we last reported in May 2010.1 The reports include findings aimed at improving management of Recovery Act funds. For example, independent auditors found that the City of Fort Collins paid about $684,000 to two subrecipients under its federal transit grants, which included a Recovery Act grant, without checking whether or not the subrecipients had been suspended or debarred from participation in federal programs. In response to the finding, the city has established a process to check a federal database of excluded parties before issuing any purchase orders for projects containing federal funding.

Full September ReportBack to top

Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] GAO, Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (Colorado), GA0-09-1017SP (Washington, D.C.: Sept. 23, 2009).
  • [3] FTE data are as of August 11, 2010, unless otherwise indicated.
  • [4] GAO, Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability (Colorado), GAO-10-605SP (Washington, D.C.: May 26, 2010).
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