Mississippi – May 26, 2010

The content below was excerpted from the Mississippi Appendix (PDF, 30 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

We reviewed two programs funded under the Recovery Act-the Weatherization Assistance Program and the Mississippi Clean Water and Drinking Water State Revolving Funds (SRF). We selected these programs because the Recovery Act significantly increased the programs' funding. Our work focused on the status of program funding, the programs' use of funds, and other issues. As part of our review of the Weatherization Assistance Program, we visited community action agencies located in Columbia, D'Lo, McComb, and Meridian. We also visited the Mississippi Department of Environmental Quality (MDEQ) and the Mississippi Department of Health (MSDH), which administer loans for clean and drinking water projects that are funded through the Recovery Act. For description and requirements of the programs we covered, see appendix XVIII of GAO-10-605SP.

Our work in Mississippi also included meeting with officials of two Mississippi cities to determine the amount of Recovery Act funds each has or will receive directly from federal agencies and to learn how those funds are being used. We also wanted to determine the amount of Recovery Act funds that flow indirectly into these communities from state and federal agencies and the funds' impact on the communities. We chose to visit the cities of Hattiesburg and Greenwood. We selected Hattiesburg because its unemployment rate was below the state's average and it is one of the largest cities in Mississippi. We selected Greenwood because of its small population and because its unemployment rate is higher than the state's average.

What We FoundBack to top

Weatherization Assistance Program

The U. S. Department of Energy (DOE) allocated $49.4 million in Recovery Act weatherization funding to Mississippi. Based on information available as of March 31, 2010, more than 2,400 homes have been weatherized statewide and $8 million has been expended. To ensure that funds are expended appropriately and efficiently, the Department of Community Services (DCS) monitors the programmatic and fiscal operations of its subgrantees, which execute the program. DCS cancelled its subgrant with one community action agency because of improper weatherization of homes and mismanagement of the program. We reviewed the amounts paid to contractors for labor for home weatherization and brought them to the attention of DCS, who determined that the amounts exceeded DCS' established guidance. DCS subsequently required the community action agency to reimburse DCS more than $38,000 paid to contractors for excess labor charges.

Clean Water and Drinking Water revolving funds

Two Mississippi agencies-MDEQ and MSDH-received $35,665,000 and $19,500,000 respectively, in Recovery Act funding for their Clean Water and Drinking Water SRF programs. Overall, bids on projects were lower than state estimates, freeing up Recovery Act funding for other projects. According to the Directors of the Clean Water and Drinking Water programs, the Environmental Protection Agency (EPA) has been slow to distribute guidance and states are left to decide how to monitor the implementation of Recovery Act requirements.

Localities' use of Recovery Act funds

Both Hattiesburg and Greenwood received Recovery Act funds directly from federal agencies. Hattiesburg received a total of $1,829,233 and Greenwood received a total of $462,042. In addition, other entities within the cities of Hattiesburg and Greenwood received Recovery Act funds that did not directly affect the two cities' budgets, but did benefit the cities. According to city officials, Recovery Act funds helped Hattiesburg and Greenwood, but did not prevent budget reductions or meet all of the cities' critical needs.

State fiscal condition

Mississippi continues to experience significant fiscal challenges. Tax revenue collections for July 2009 through April 2010, the first 10 months of fiscal year 2010, totaled $300.4 million, or 7.7 percent below expectations. Based on the current revenue forecast, the expected shortfall for the fiscal year is projected to be $499.1 million.

Accountability

To ensure accountability and oversight over federal funds received by Mississippi, the Office of the State Auditor (OSA) conducts an annual Single Audit that reports on internal controls over financial reporting and compliance with pertinent laws and regulations.[2] In addition, to provide increased oversight and accountability of Recovery Act funds, OSA has contracted with a national accounting firm, BKD, to assist with monitoring and oversight. BKD plans to monitor entities such as local governments, not-for-profit organizations, community health centers, and school districts. The Mississippi Department of Finance and Administration (DFA) is monitoring state agencies receiving Recovery Act funds. To do so, it has contracted with the accounting firm KPMG LLP to assess all state agencies for their compliance with Recovery Act provisions.

Full May ReportBack to top

Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
GAO-10-604
Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
(Appendixes)
GAO-10-605SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [1] Single Audits are prepared to meet the requirements of the Single Audit Act, as amended, and provide a source of information on internal control and compliance findings and the underlying causes and risks. The Single Audit Act requires states, local governments, and nonprofit organizations expending $500,000 or more in federal awards in a year to 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 an opinion on compliance with applicable program requirements for certain federal programs.
GAO Contact
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John K. Needham

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