Massachusetts – December 10, 2009

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

Contents

What We Did

GAO’s work in Massachusetts for this reporting period focused on three specific programs funded under the Recovery Act—Highway Infrastructure Investment, Public Housing Capital Fund (formula and competitive grants), and the Weatherization Assistance Program. We selected these programs because all three have significant funds being obligated at this point. The highway program in Massachusetts has a major obligation deadline approaching in March 2010 and was behind other states in getting these funds obligated and reimbursements for projects previously obligated. Competitive grants for the housing program were recently awarded, and the formula grant projects are under way. Lastly, the Massachusetts weatherization program has begun spending its Recovery Act funds following a delay while the U.S. Department of Labor set weatherization wage rates. Our work focused on the status of the programs’ funding, how funds are being used based on issues specific to each program (including procedures for procurement of goods and services), and how results were being reported and assessed. As part of our review of public housing, we revisited two agencies, the Boston and Revere public housing agencies, that we reported on earlier in 2009. We also visited two recipients of weatherization funds—community action agencies in Chelsea and Gloucester. In addition, we are including updated funding information and results of our national survey on three Recovery Act education programs with significant funds being disbursed. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-232SP.

To gain an understanding of the state’s experience in meeting Recovery Act reporting requirements, we examined documents prepared by, and held discussions with, the Massachusetts Department of Transportation (MassDOT) and its predecessor, the Massachusetts Executive Office of Transportation (EOT) and met with two highway general contractors.[2] In Massachusetts, state agencies that are prime recipients of Recovery Act funds report through the commonwealth on a number of measures, including the use of funds and estimates of the number of jobs created and retained. The first quarterly reports were due in October 2009. We focused our work on MassDOT’s methodology for collecting data, particularly job creation and sustainment data, and on MassDOT’s experience in preparing the October report.

Finally, we continued to track the use of Recovery Act funds on state fiscal stabilization, and also visited two Massachusetts cities to determine the Recovery Act funds each is receiving from federal agencies and how those funds are being used as they deal with their difficult fiscal situations. We chose to visit the cities of Boston and Springfield, the largest and third-largest cities in population in Massachusetts, respectively. Both are receiving Recovery Act funds under several programs. They have unemployment rates of 9.2 percent and 12.8 percent, respectively, thus providing an example of cities with unemployment rates above and below the commonwealth’s unemployment rate of 9.3 percent.

What We Found

Highway Infrastructure Investment

As of October 31, 2009, the U.S. Department of Transportation (DOT) Federal Highway Administration (FHWA) has obligated $253 million of the $438 million of Recovery Act funds apportioned to Massachusetts. Although still behind other states, the commonwealth has made progress in having funds obligated for highway projects, including those in metropolitan areas. Upcoming projects for which Massachusetts will seek approval will strike a balance between projects that can be obligated quickly and projects that support the state’s long-term economic development plans. Bids for highway projects continue to come in below state cost estimates, as competition continues among contractors for these projects. According to FHWA officials, Massachusetts has been meeting its maintenance of effort spending goals, but the commonwealth will need to recertify to higher spending levels because of errors in their original calculation and additional guidance that state highway aid to local governments must be included.

Public Housing Capital Fund

Public housing agencies in Massachusetts were allocated about $82 million in Public Housing Capital Fund formula grants under the Recovery Act. As of November 14, 2009, they had obligated about $31 million of these funds and drawn down about $12 million. These funds flow directly to the public housing agencies. The two public housing agencies we visited—Boston and Revere—both said they are using their formula funds primarily to accelerate capital improvement projects that were already on their long-term plans. The Boston Housing Authority has faced some challenges to awarding contracts and starting construction work quickly, but has taken steps to meet the March 2010 deadline for obligating all formula funds. The Revere Housing Authority expects the construction work on its one formula project to be completed by the end of December 2009. In addition, Boston received about $40 million in competitive grant funds for specific purposes, while Revere did not apply for any competitive grants.

Weatherization Assistance Program

Massachusetts was allocated $122.1 million in Recovery Act Weatherization Assistance Program funds in March 2009 for improving the energy efficiency of low-income families’ homes.[3] As of November 17, 2009, the commonwealth reported overall Recovery Act weatherization expenditures of $16.4 million primarily for advance payments to subgrantees and estimated the completion of over 500 units with Recovery Act funding, with an additional 1,100 units in process. The commonwealth opted to use these funds once the U.S. Department of Labor set prevailing wage rates for Massachusetts weatherization workers. To handle the increased funds, local community action agencies that implement the weatherization program identified potential new contractors. Those new to weatherization receive special training and agencies report doing more oversight and inspections of these contractors’ work.

Updated Funding Information on Education Programs

Massachusetts has been awarded Recovery Act education funds through three major programs. The commonwealth has been awarded $726 million in State Fiscal Stabilization Fund money, designed in part to help state and local governments stabilize their budgets by minimizing budgetary cuts in education and other essential government services. As of November 6, 2009, the commonwealth has drawn down about $423 million. Actual and planned recipients include local educational agencies (LEA) (which have expended $412 million), institutions of higher education (IHE), fire departments, and the state police. Massachusetts was also awarded $164 million in Recovery Act funds through Title I, Part A of the Elementary and Secondary Education Act of 1965 (ESEA), as amended, which helps educate disadvantaged youth, and as of November 6, 2009, the commonwealth had drawn down almost $7 million. In addition, under Part B of the Individuals with Disabilities Education Act (IDEA), as amended, which supports special education services, the commonwealth has been awarded $291 million. As of November 6, 2009, the commonwealth had drawn down almost $20 million in IDEA, Part B Recovery Act funds for LEAs. In addition, we found that LEAs in Massachusetts are generally not planning to use more than half of their Recovery Act funds for staff retention, and that the commonwealth’s current plans for monitoring LEAs’ use of State Fiscal Stabilization Fund monies include an up-front review of LEAs’ funding applications and the Single Audit.

Recipient Reporting

Massachusetts developed a centralized system to collect award-level data from prime recipients that supplements data from the commonwealth’s financial management system with employment data collected by state agencies from their vendors and subrecipients. The commonwealth took steps to ensure the quality of recipient reports that included the centralized calculation of full-time equivalent positions (FTE) based on hours worked and the requirement that each prime recipient validate data before submission to www.federalreporting.gov (FederalReporting.gov). While some nonstate entities we visited were largely successful with quarterly report submission, other entities we visited that did not report through the commonwealth’s centralized data system faced challenges.

Cities’ Use of Recovery Act Funds

Boston and Springfield have received Recovery Act funds directly from federal agencies and indirectly through state government. The cities’ plans for the funds include using education and public safety dollars to help retain jobs in schools and police departments.

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] As of November 1, 2009, Massachusetts reorganized its transportation agencies and authorities into a new Massachusetts Department of Transportation (MassDOT).
  • [3] On September 22, 2009, the U.S. Department of Energy obligated all the funds allocated to the states, but it has limited the states’ access to 50 percent of these funds.
GAO Contact
portrait of of Stanley J. Czerwinski

Stanley J. Czerwinski

Director, Strategic Issues

czerwinskis@gao.gov

(202) 512-6520

portrait of of Laurie Ekstrand

Laurie Ekstrand

Massachusetts State Team

ekstrandl@gao.gov

(202) 512-6845