Illinois – September 20, 2010

The content below was excerpted from the Illinois Appendix (PDF, 17 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

We conducted work on one of the programs in Illinois that was funded under the Recovery Act-the Public Housing Capital Fund-to follow up on issues that we had reported on in previous bimonthly reviews. For this program, we conducted interviews and examined relevant program documents. Additionally, we met with state-level auditors to determine what steps they were taking to oversee state agencies' implementation of the Recovery Act. We also met with officials from the Illinois Governor's Office to discuss the state's ongoing role in reviewing the quarterly recipient reports that state agencies receiving Recovery Act funds must submit to federal agencies through the Web site.[2] Finally, we monitored the state's fiscal condition and spoke to officials from two rural communities-Chrisman and the Village of Steward-to discuss their use of Recovery Act funds and the effect of these funds on their budgets. (For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-1000SP.)

What We FoundBack to top

Public Housing Capital Fund

Six public housing agencies in Illinois collectively received $83.7 million in Public Housing Capital Fund competitive grant funds under the Recovery Act.[3] As of August 7, 2010, five of the recipient public housing agencies had obligated $53.5 million of the $83.7 million and had drawn down a cumulative total of $23.8 million, or 44.4 percent of the obligated funds.[4] Similarly, 99 public housing agencies in Illinois collectively received $221.5 million in Public Housing Capital Fund formula grants under the Recovery Act. As of August 7, 2010, the recipient agencies had obligated all of the $221.5 million and drawn down a cumulative total of $143.6 million, or 64.8 percent of the obligated funds. For this report we visited the Chicago Housing Authority (CHA), which continues to make progress on its Recovery Act competitive and formula grant projects. For example, as of July 1, 2010, CHA had expended 52 percent of its Recovery Act formula funds and completed work on 5 of 12 projects funded by the Recovery Act.

Oversight Activities

Auditing responsibility within the state passed from the Illinois Office of Internal Audit (IOIA) within the Governor's Office to state agencies effective July 1, 2010.[5] Officials said that IOIA staff will finish the 20 audits the office planned or started prior to July 1. State officials expect that the Office of Accountability, also within the Governor's Office, will follow up on the implementation of IOIA audit recommendations as part of its existing role assisting agencies in implementing corrective action plans to address audit findings. In addition, the Office of the Auditor General issued the fiscal year 2009 statewide Single Audit, and the Inspectors General of the U.S. Departments of Education and Energy are currently conducting audits of state programs that received larger amounts of Recovery Act funds.[6] We spoke to state and federal auditors about these audits for this review.

Recipient Reports

The Governor's Office requires state agencies to submit employment and other data to the Illinois Federal Reporting Test site for review and verification before they submit these data to their respective federal agencies through the Web site. IOIA used to be responsible for reviewing these reports; however, with the statutorily-mandated transfer of audit responsibility to state agencies, and the corresponding dissolution of IOIA, the Illinois Office of Accountability has taken responsibility for reviewing and verifying most state agencies' reports.

Illinois's Fiscal Condition

Representatives of the Governor's Office emphasized the important role that Recovery Act funds have played in aiding the state's fiscal situation over the previous 2 fiscal years. However, Illinois's fiscal year 2011 budget does not include Recovery Act State Fiscal Stabilization Fund (SFSF) monies, which provided more than $2 billion toward education in the state over the past 2 fiscal years. The Governor's Office had planned to address the phasing out of SFSF monies in fiscal year 2011 with a tax increase, but the Illinois General Assembly did not pass such an increase. Facing a balance of between $5 billion and $6 billion in unpaid bills from prior fiscal years, the state passed legislation that provides the governor with expanded authority to address the budget deficit, according to state officials.[7]

Rural Communities' Use of Recovery Act Funds

Although the communities we spoke to applied for and were awarded Recovery Act funds, they ultimately delayed use of the funds. For example, an official from the Village of Steward, Illinois, told us that the village applied for $2.5 million in Recovery Act funding through the U.S. Department of Agriculture's (USDA) Rural Development Water and Waste Program to establish a sewer system, but had to put the project on hold because residents were unwilling to pay costs associated with the project.

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] Under section 1512 of the Recovery Act, recipients of Recovery Act funds must submit quarterly reports that include employment and other data to the federal agencies through the Web site. These reports are due on the 10th day of the month following the end of the reporting period and are available to the public on the Web site.
  • [3] The U.S. Department of Housing and Urban Development's (HUD) Illinois State Office of Public Housing monitors all Illinois housing agencies for compliance with Recovery Act requirements, including obligation and expenditure deadlines.
  • [4] As of August 7, 2010, one housing agency had not obligated any of its competitive grant funds.
  • [5] According to Illinois officials, Illinois Executive Order 2003-10, Executive Order to Consolidate Facilities Management, Internal Auditing and Staff Legal Functions, consolidated the state's internal audit function under the Illinois Department of Central Management Services within the Governor's Office. 27 Ill. Reg. 6401 (Apr. 11, 2003). State officials further explained that Illinois Public Act 096-0795 mandated the return of the internal audit function to state agencies and the dissolution of IOIA, as the function would again reside at the agencies.
  • [6] Single Audits are prepared to meet the requirements of the Single Audit Act of 1984, as amended (31 U.S.C. §§ 7501-7507) and provide a source of information on internal control and compliance findings and the underlying causes and risks. The Single Audit requires that states, local governments, and nonprofit organizations expending more than $500,000 in federal awards in a year obtain an audit in accordance with the requirements set forth in the act. A Single Audit consists of (1) an audit and opinions on the fair presentation of the financial statements and the Schedule of Expenditures of Federal Awards; (2) gaining an understanding of and testing internal control over financial reporting and the entity's compliance with laws, regulations, and contract or grant provisions that have a direct and material effect on certain federal programs (i.e., the program requirements); and (3) an audit and opinion on compliance with applicable program requirements for certain federal programs. See also Office of Management and Budget (OMB) Circular A-133 (revised June 27, 2003, and June 26, 2007).
  • [7] Ill. Pub. Act 096-0958, art. 1 (July 1, 2010).
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