Iowa – December 10, 2009

The content below was excerpted from the Iowa Appendix (PDF, 24 pages) of GAO's fourth bimonthly review of the Recovery Act.[1]

Contents

What We Did

Our work in Iowa examined specific programs and funds under the Recovery Act—the Highway Infrastructure Investment Program, Transit Capital Assistance Program, Weatherization Assistance Program, Public Housing Capital Fund, and education programs. We selected these programs because they are among the programs receiving the greatest amount of Recovery Act funds in Iowa and have recently begun to obligate or are already using significant amounts of Recovery Act funds. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-232SP. To review the transportation programs, we visited four transit authorities: the Des Moines Area Regional Transit Authority; the Ames Transit Agency; the Mid-Iowa Development Association and Dodger Area Transit in Fort Dodge; and the Southwest Iowa Transit Agency in Atlantic, Iowa. We selected these to provide a mix of large urban, small urban, and nonurban transit authorities. To review the weatherization program, we revisited the Polk County Public Works Department in Des Moines, an urban local action agency, as well as Mid-Iowa Community Action in Marshalltown, a rural local action agency. We revisited four public housing agencies that we reported on in our July 2009 report: the Des Moines Municipal Housing Agency, the Evansdale Municipal Housing Authority, the North Iowa Regional Housing Authority and the Ottumwa Housing Authority. Finally, we surveyed a representative sample of local educational agencies (LEA) nationally and in Iowa about their planned uses of Recovery Act funds. We also examined the state’s actions to stabilize its budget, monitor controls over the use of Recovery Act funds, and report the number of jobs created and retained as a result of these funds. We analyzed state and local budget information, including state revenue estimates, and met with state and municipal officials. We visited three Iowa localities—Cedar Rapids, Des Moines, and Newton—to determine the amount of Recovery Act funds each is receiving from federal agencies and how those funds are being used. We selected Cedar Rapids because it is the second largest city in Iowa and was already managing federal funds to recover from significant flooding that occurred in 2008. We selected Des Moines because it is the largest city in Iowa and has been awarded at least $16.5 million in Recovery Act funds for various projects. We selected Newton because its unemployment rate is above the state’s average—8.1 versus a state average of 6.3—and because of the recent loss of a major area employer. As part of our review of Iowa’s reporting on the number of jobs created and retained under the Recovery Act, we met with highway contractors as well as county and district engineers in Cass and Polk counties and from the cities of Atlantic, Jefferson, and Fort Dodge.

What We Found

Highway Infrastructure Investment

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $358 million in Recovery Act funds to Iowa. As of October 31, 2009, the federal government had obligated $334 million to Iowa; and $165 million had been reimbursed by the federal government for work submitted for payment by highway contractors.[2] About 84 percent of Recovery Act highway obligations for Iowa have been for pavement improvement projects. Iowa’s October 2009 report to www.federalreporting.gov on the number of jobs created or retained shows that Recovery Act funds have contributed to the equivalent of more than 1,200 full-time highway infrastructure jobs in Iowa. In addition, Iowa transportation officials estimate that the Recovery Act has helped complete repairs on more than 250 lane-miles of road in the state.

Transit Capital Assistance Program

The U.S. Department of Transportation’s Federal Transit Administration (FTA) apportioned $36.5 million in Recovery Act funds to Iowa and urbanized areas located in the state. As of November 5, 2009, FTA had obligated $35.2 million. About 90 percent of Iowa’s Recovery Act Transit Capital Assistance Program funds are being used to replace and expand aging bus fleets and to rehabilitate or improve transit facilities. Transit agencies we visited—Des Moines Area Regional Transit Authority; Ames Transit Agency; Mid-Iowa Development Association and Dodger Area Transit in Fort Dodge; and the Southwest Iowa Transit Agency in Atlantic, Iowa—are using Transit Capital Assistance Recovery Act funds primarily to replace buses that have been in their fleets for 10 years or longer. In total, the state and urbanized areas in Iowa reported 12 jobs created or retained as a result of Transit Capital Assistance program expenditures.

Weatherization Assistance Program

Iowa has obligated most of the $40.4 million received in Recovery Act funds to the local agencies that carry out the weatherization work. Seventeen of 18 agencies are using these funds to complete weatherization work, such as insulating walls and attics and reducing air infiltration in homes. Actual work on homes did not, however, start until September 2009; therefore, only 71 homes had been weatherized, as of October 31, 2009.

Public Housing Capital Fund Formula Grants and Competitive Grants

Iowa’s 48 public housing agencies received approximately $7.6 million in Public Housing Capital Fund formula grants. As of November 14, 2009, Iowa’s public housing agencies had obligated about $6.1 million and had drawn down about $3 million in Capital Fund formula grants. On average, Iowa public housing agencies are obligating funds faster than public housing agencies nationally. Only one public housing agency in Iowa was awarded competitive grant funds—the Ottumwa Housing Authority—which was awarded two competitive grants totaling about $178,000 to improve energy efficiency at two sites.

Education

Based on a survey of a representative sample of LEAs in Iowa about their planned use of Recovery Act funds, we estimated that about one-third of Iowa LEAs plan to use more than 50 percent of Individuals with Disabilities Education Act (IDEA) funds to retain staff and about two-thirds of LEAs plan to use more than 50 percent of State Fiscal Stabilization Fund (SFSF) funds to retain staff. However, about one-third of Iowa LEAs anticipate job losses, even with SFSF funds.

State and Local Government Use of Recovery Act Funds

The receipt of Recovery Act funds enabled Iowa to mitigate the effects of a recent budget cut to state agencies. Due to projected declines in fiscal year 2010 revenues, Iowa’s governor recently implemented a 10 percent across-the-board budget reduction for the fiscal year, which will result in government furloughs and layoffs. However, according to state officials, the receipt of Recovery Act funds has enabled Iowa to maintain education services, and avoid additional state government layoffs. The three localities we visited—Cedar Rapids, Des Moines, and Newton—said that they have benefited from the receipt and use of Recovery Act funds. However, officials from these three localities also said that they faced significant challenges in applying for and implementing Recovery Act programs due to continuing budgetary and staffing constraints.

State Monitoring and Internal Controls

Iowa’s State Auditor and the Iowa Accountability and Transparency Board continue to monitor controls over Recovery Act funds. The Office of the State Auditor’s audit plan includes consideration of the increased risk associated with state agencies and localities receiving Recovery Act funding. The Iowa Accountability and Transparency Board (Board) identified six high-priority programs that it expects will have some difficulty in fully complying with the accountability and transparency requirements in the Recovery Act. The Board has required that these high-priority programs submit a comprehensive accountability plan.

State Reporting Under Section 1512

In accordance with section 1512 of the Recovery Act,[3] Iowa submitted a detailed report to the federal government that included information on the number of jobs created and retained by the implementation of the Recovery Act. Based on data provided by state and local agency officials, Iowa created a centralized database and used it to calculate the number of jobs created or retained for programs funded through the state. Iowa has implemented internal controls, such as requiring agency and local officials to certify their review and approval of information prior to submission, to help ensure the accuracy of the data reported to the state. Iowa officials told us that a relatively small amount of data were improperly submitted based on the number of awards that required resubmission.

Full December ReportBack to top

Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
GAO-10-231
Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
(Appendixes)
GAO-10-232SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] States request reimbursement from FHWA as they make payments to contractors working on approved projects.
  • [3] Recovery Act, div. A, title XII, § 1512.
GAO Contact
portrait of of Lisa Shames

Lisa Shames

Director, Natural Resources and Environment

shamesl@gao.gov

(202) 512-2649