New Jersey – July 8, 2009

The content below was excerpted from the New Jersey Appendix (PDF, 47 pages) of GAO's second bimonthly review of the Recovery Act.[1]

Contents

Use of Funds

Our work in New Jersey focused on nine federal programs, selected primarily because they have begun disbursing funds to the state. These include existing programs receiving significant amounts of Recovery Act funds or significant increases in funding. Program funds are being used to help New Jersey stabilize its budget and support local governments, particularly school districts, and several are being used to expand existing programs. Funds from some of these programs are intended for disbursement through states or directly to localities. The funds include the following:

Funds Made Available as a Result of Increased Medicaid Federal Medical Assistance Percentage (FMAP)

As of June 29, 2009, New Jersey has received about $580 million in increased FMAP grant awards, of which it has drawn down almost $580 million, or 100 percent. New Jersey is using funds made available as a result of the increased FMAP to cover the state’s increased Medicaid caseload, maintain current populations and benefits, and free up state funds to offset the state budget deficit.[2]

Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s (DOT) Federal Highway Administration (FHWA) apportioned $652 million in Recovery Act funds to New Jersey, of which $410 million was obligated as of June 25, 2009. As of June 25, 2009, the federal government’s obligation was $223,780. Funding from the first round of FHWA obligations are being used for five quick-start projects. These projects generally include pavement resurfacing and road repair, but also include one long-term project. For example, New Jersey plans to use funds for the first phase of bridge repair for the Route 52 Causeway project in Cape May and Atlantic Counties.

U.S. Department of Education State Fiscal Stabilization Fund (SFSF)

The U.S. Department of Education (Education) has awarded about $891 million to New Jersey, or about 67 percent of its total SFSF allocation of $1.3 billion. According to officials from the New Jersey Office of Management and Budget, the state has expended $162 million, as of June 30, 2009. New Jersey is using these funds to restore state aid to school districts and fill shortfalls in the state budget.

Title I, Part A, of the Elementary and Secondary Education Act (ESEA) of 1965

Education has allocated $91.5 million to New Jersey in Recovery Act ESEA Title I, Part A, funds, or 50 percent of its total allocation of $183 million. Of these funds, New Jersey has allocated $91.5 million to local education agencies, and based on information available as of June 30, 2009, New Jersey has obligated none of these funds. To expedite spending, New Jersey made 50 percent of these funds available to local education agencies for summer activities such as districtwide summer programs for students and in-service professional development programs for teachers.

Individuals with Disabilities Education Act (IDEA), Parts B and C

Education has allocated $192 million to New Jersey in Recovery Act IDEA, Part B and C, funds, or 50 percent of its total allocation of $383 million. Of these funds, New Jersey has obligated none of the Part B funds to local education agencies or Part C funds to service providers, based on information available on June 30, 2009. To expedite spending, New Jersey made 50 percent of Part B funds available to local education agencies for summer activities such as summer intensive instructional support for students with disabilities. For example, officials in the Camden School District reported that they planned to use summer IDEA Part B funds for a districtwide professional development program for teachers and paraprofessionals working in the district’s programs for behavioral disabilities, autism, and special education. In addition, local education agencies can use these funds for the purchase of equipment such as assistive technology. New Jersey plans to provide Recovery Act funds for Part C to providers that report an increase in enrollment and services.

Workforce Investment Act Youth Program

The U.S. Department of Labor has allotted about $20.8 million to New Jersey in Workforce Investment Act Youth Recovery Act funds. New Jersey plans to use $17.7 million (85 percent of the total allotment) of Recovery Act funds under this program to create about 6,000 summer jobs for its youth.

Edward Byrne Memorial Justice Assistance Grants

The Department of Justice’s Bureau of Justice Assistance has awarded $29.8 million directly to New Jersey in Recovery Act funding. Based on information available as of June 30, 2009, none of these funds have been obligated by the New Jersey Department of Law and Public Safety, which administers these grants for the state.[3] New Jersey will use all of these funds to implement the state’s Strategy for Safe Streets and Neighborhoods, a range of initiatives aimed at increasing intelligence-led, data-driven policing. The state will also use these funds to decrease youth involvement in crime and reduce recidivism.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development has allocated about $104 million in Recovery Act funding to 80 public housing agencies in New Jersey. Based on information available as of June 20, 2009, about $11.7 million (11.2 percent) has been obligated by 47 of those agencies. GAO visited four Public Housing Agencies in New Jersey: the Newark Housing Authority, the Plainfield Housing Authority, the Rahway Housing Authority, and the Trenton Housing Authority. Officials at the housing agencies plan to use this money, which flows directly from the Department of Housing and Urban Development to public housing authorities, for various capital improvements, including rehabilitating vacant units; replacing roofs, exterior siding, and windows; and adding security features such as intercom systems.

Weatherization Assistance Program

The U.S. Department of Energy (DOE) allocated about $118.8 million in Recovery Act weatherization funding to New Jersey for a 3-year period. Based on information available on June 30, 2009, DOE has provided $11.8 million to New Jersey, and New Jersey has obligated $7.4 million of these funds. New Jersey plans to begin disbursing the initial 10 percent of funds in late June or early July 2009 for grantees to use toward weatherization and “ramp up” activities for weatherizing low-income families’ homes. These activities include training and technical assistance and the purchase of equipment and vehicles.

Safeguarding & TransparencyBack to top

New Jersey has added specific codes in its accounting system to track Recovery Act funds. The state Office of the Inspector General is planning to provide additional training on internal controls for agencies receiving Recovery Act funding. The state’s Recovery Accountability Task Force and the Governor’s Office are also working with agencies to resolve weaknesses identified through the single audits. Additionally, the oversight community has taken some steps in planning oversight of programs receiving Recovery Act funds. For example, the State Auditor is conducting audits of the departments administering the weatherization and Edward Byrne Memorial Justice Assistance grant programs. New Jersey’s Office of the State Comptroller is reviewing all Workforce Investment Act programs.

Assessing the Effects of SpendingBack to top

As required by the Recovery Act, New Jersey state agencies and localities we met with are planning initiatives to measure the impact of Recovery Act funds, including the number of jobs created or retained. At the time of our discussions, some officials said it would be helpful to have more guidance from federal agencies about what will be required. On June 22, 2009, OMB provided governmentwide guidance on the types of information the federal government would require in reports of Recovery Act spending.[4]

Full July ReportBack to top

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses
GAO-09-829
Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses (Appendixes)
GAO-09-830SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services. However, the receipt of this increased FMAP may reduce the funds that states would otherwise have to use for their Medicaid programs, and states have reported using these available funds for a variety of purposes.
  • [3] We did not review Edward Byrne Memorial Justice Assistance grants awarded directly to local governments in this report because the Bureau of Justice Assistance’s solicitation for local governments closed on June 17, 2009; therefore, not all of these funds have been awarded.
  • [4] See OMB Memorandum, M-09-21, Implementing Guidance for the Reports on Use of Funds Pursuant to the American Recovery and Reinvestment Act of 2009 (June 22, 2009).
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David J. Wise

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Eugene E. Aloise

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