Iowa – April 23, 2009

Use of Funds

An estimated 90 percent of Recovery Act funding provided to states and localities nationwide in fiscal year 2009 (through Sept. 30, 2009) will be for health, transportation, and education programs. The three largest programs in these categories are the Medicaid Federal Medical Assistance Percentage (FMAP) awards, the State Fiscal Stabilization Fund, and highways.

Medicaid Federal Medical Assistance Percentage Funds

  • As of April 3, 2009, Centers for Medicare and Medicaid Services (CMS) had made about $84 million in increased FMAP grant awards to Iowa.
  • From January 2008 to January 2009, Iowa's Medicaid enrollment increased from 358,112 to 392,813, with the highest enrollment increase attributable to two population groups: (1) children and families and (2) nondisabled nonelderly individuals.
  • As of April 15, 2009, Iowa had drawn down about $86 million, or 63 percent of its increased FMAP grant awards.
  • Officials plan to use funds made available as a result of the increased FMAP to cover increased caseloads, maintain existing populations of recipients, and avoid reductions to benefits for Medicaid recipients.

Transportation—Highway Infrastructure Investment

  • Iowa was apportioned about $358 million for highway infrastructure investment on March 2, 2009, by the U.S. Department of Transportation.
  • As of April 16, 2009, the U.S. Department of Transportation had obligated $221.2 million for 107 Iowa projects.
  • As of April 15, 2009, the Iowa Department of Transportation had competitively awarded 25 contracts valued at $168 million, or 47 percent of the Recovery Act funds apportioned.
  • Contracts were awarded for projects such as bridge replacements and highway resurfacing—"shovel ready" projects that could be initiated and completed quickly.

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

  • Iowa was allocated about $316 million from the initial release of these funds on April 2, 2009, by the U.S. Department of Education.
  • Before receiving the funds, states are required to submit an application that provides several assurances to the Department of Education. These include assurances that they will meet maintenance of effort requirements (or that they will be able to comply with waiver provisions) and that they will implement strategies to meet certain educational requirements, including increasing teacher effectiveness, addressing inequities in the distribution of highly qualified teachers, and improving the quality of state academic standards and assessments.
  • Iowa plans to submit its application as soon as it can be accurately completed.
  • Iowa's Department of Education plans to use these funds to maintain spending for grades K-12 and postsecondary.

In addition, Iowa estimates that other funding will be provided to the state under the Recovery Act for the following program areas:

  • Education—$214 million (includes programs such as those to provide grants to local education agencies and assist individuals with disabilities).
  • Housing and infrastructure—$252 million (includes programs such as the Weatherization Assistance Program).
  • Agriculture/natural resources—$152 million (includes programs such as the clean water state revolving fund).
  • Economic development—$94 million (includes programs such as the unemployment insurance program).

The status of plans for using these funds is discussed throughout this appendix.

Safeguarding & TransparencyBack to top

Iowa has a foundation of safeguards and controls that could help assure proper spending of Recovery Act funds. For example, the State Auditor is responsible for audits of state and local entities, such as counties, cities, and school districts, and must provide guidelines to public accounting firms that perform such audits. In addition, many state agencies have internal audit groups that focus on programmatic and financial issues. Furthermore, according to state officials, administrative and statutory mechanisms are in place that could oversee Recovery Act funds and provide information to the public on how these funds are being spent. For example, while previous audits have shown few financial weaknesses, the State Auditor is updating its 2009 audit plan risk assessment to reflect the increased risk associated with Recovery Act funding. Iowa is also enhancing its accounting systems to track all Recovery Act funds that will flow through the state government to ensure that the state can adjust its spending plans as needed. Furthermore, Iowa is developing or planning systems to track funds provided to cities, counties, local governments, and other entities. Finally, Iowa is working to establish a framework that will provide transparency on the use of Recovery Act funds. This framework includes the state's Recovery Act Web site, which is designed to provide up-to-date information on the use of Recovery Act funds by program, a state board to recommend improvements to existing practices to prevent fraud, waste, and abuse and oversee the spending of Recovery Act funds, and mechanisms provided through the state's Accountable Government Act.

Assessing the Effects of SpendingBack to top

State agencies have begun to consider how to measure outcomes and assess the effect of the Recovery Act. Some agencies have mechanisms in place to collect data in order to calculate outcomes. Other state agencies are awaiting guidance such as a consistent approach to quantifying the number of jobs created and sustained. In the meantime, Iowa's Legislative Services Agency plans to work closely with the Iowa Department of Management to create outcome measures for the Recovery Act and report results.

For More InformationBack to top

The above excerpts are taken from GAO's April 23, 2009 Bimonthly Review of the Recovery Act:

Recovery Act: As Initial Implementation Unfolds in States and Localities, Continued Attention to Accountability Issues Is Essential
GAO-09-580, April 23, 2009
For more information on Iowa within the report, please see the following pages:
Appendix IX: Iowa pages: 147 – 160
GAO Contact
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Lisa Shames

Director, Natural Resources and Environment

(202) 512-2649