New Jersey – December 10, 2009

The content below was excerpted from the New Jersey Appendix (PDF, 19 pages) of GAO's fourth bimonthly review of the Recovery Act.[1]


What We Did

We reviewed three specific programs funded under the Recovery Act: State Fiscal Stabilization Fund (SFSF), Highway Infrastructure Investment program, and Public Housing. We selected these programs for different reasons. New Jersey began disbursing its allocation of SFSF funds in September 2009. The highway program in New Jersey has an obligation deadline approaching in March 2010 and is behind other states in its obligation of funds suballocated for regional, metropolitan, and local use. The housing program recently awarded competitive grants and projects using the Recovery Act formula grant funds are under way. Our work focused on the status of each program’s funding, how funds are being used, and issues that are specific to each program. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO‑10‑232SP. As part of our review of public housing, we also revisited four housing agencies—Newark, Plainfield, Rahway, and Trenton—that we reported on earlier in 2009.[2] We also reported on selected survey results for Title I, Part A of the Elementary and Secondary Education Act (ESEA), as amended and Part B of the Individuals with Disabilities Education Act (IDEA).

To gain an understanding of the state’s experience in meeting Recovery Act reporting requirements, we met with state officials with each of the programs we reviewed. Because New Jersey is a decentralized reporting state, each agency serves as the prime recipient.[3] Prime recipients of Recovery Act funds are required to report quarterly on a number of measures, including estimates of the number of jobs created and retained. The first quarterly reports were due in October 2009.

Finally, our work in New Jersey included visiting two localities to determine the amount of Recovery Act funds each has or will be receiving from the state or directly from federal agencies and to learn how those funds are being used. We chose to visit the city of Newark and Cumberland County. Both localities have unemployment rates that are higher than the state average of 9.6 percent as of September 2009. We selected Newark because it is New Jersey’s largest city, urban, and located in the northern part of the state. We selected Cumberland County because it is sparsely populated, a mix of urban and rural areas, and located in the southern part of the state.

What We Found

State Fiscal Stabilization Fund (SFSF)

As of November 13, 2009, New Jersey had drawn down 45 percent of its total allocation of SFSF monies (education stabilization funds). Most of New Jersey’s local educational agencies (LEAs) will spend over half of their SFSF funds on staff retention.

Highway Infrastructure Investment

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $652 million in Recovery Acts funds to New Jersey. As of October 31, 2009, about $492 million had been obligated and $71 million had been reimbursed by FHWA. The overall obligation rate for New Jersey continues to be high, but the state has been slow to request that FHWA obligate about $196 million of suballocated funds to New Jersey for projects planned by local agencies.

Public Housing Capital Fund

New Jersey’s 80 public housing agencies are spending about the same as the national average. Under the act, public housing authorities are to prioritize projects for which the authority can award contracts within 120 days from when funds were made available, however, officials in all four agencies we visited said that they were unable to award contracts within this timeframe. Officials cited such reasons as delays in obtaining work permits and meeting requirements for HUD’s approval of all obligations and expenditures.

Localities Use of Recovery Act Funds

As of October 2009, the city of Newark, reported receiving, will be receiving, or being allocated, approximately $120 million, which it plans to use for numerous one-time projects, such as road repaving. Cumberland County reported receiving about $4.8 million that it is using to support nonrecurring projects and existing programs, such as road repaving and employment programs for adults and youth, respectively.

Full December ReportBack to top

Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] GAO, Recovery Act: States’ and Localities’ Current and Planned Uses of Funds, While Facing Fiscal Stresses, GAO-09-830SP (Washington, DC: July 8, 2009).
  • [3]As defined by OMB, prime recipients are non-Federal entities that receive Recovery Act funding as Federal awards in the form of grants, loans, or cooperative agreements directly from the Federal Government.
GAO Contact
portrait of of David J. Wise

David J. Wise

Director, Physical Infrastructure

(202) 512-5731

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Eugene E. Aloise

Director, Natural Resources and Environment

(202) 512-6870