New Jersey – September 23, 2009

The content below was excerpted from the New Jersey Appendix (PDF, 43 pages) of GAO's third bimonthly review of the Recovery Act.[1]


Use of Funds

We reviewed five programs in New Jersey funded under the Recovery Act—Title I, Part A, of the Elementary and Secondary Education Act of 1965 (ESEA), as amended; the Individuals with Disabilities Education Act (IDEA), Part B; Highway Infrastructure Investment funds; Transit Capital Assistance funds; and the Weatherization Assistance Program. We selected these programs for different reasons. To expedite spending of ESEA Title I and IDEA, Part B Recovery Act funds, New Jersey’s Department of Education opened a request for applications for local educational agencies (LEA) to use up to 50 percent of each LEA’s allocation during the summer recess. Contracts for highway projects using Highway Infrastructure Investment funds have been under way in New Jersey for several months, which provided an opportunity to review and discuss with officials New Jersey’s progress in suballocating funds to local areas, as required by the Recovery Act, and the oversight of contracts. The Transit Capital Assistance funds had a September 1, 2009, deadline for obligating a portion of the funds. The Weatherization Assistance Program in New Jersey had begun to spend Recovery Act funds on start-up activities related to the weatherization of homes and, as in other states, the large influx of Recovery Act funds posed a risk to program implementation. With these programs, we focused on how funds were being used; how safeguards were being implemented, including those related to procurement of goods and services for highway and weatherization contracting; and how results were being assessed. We reviewed and discussed with officials contracting procedures and three specific contracts under the Recovery Act Highway Infrastructure Investment funds program. In addition to these five programs, we also updated funding information on the U.S. Department of Education State Fiscal Stabilization Fund (SFSF) and the U.S. Housing and Urban Development (HUD) Public Housing Capital Fund. Consistent with the purposes of the Recovery Act, funds from the programs we reviewed are being directed to help New Jersey and local governments stabilize their budgets and to stimulate infrastructure development and expand existing program—thereby providing needed services and potential jobs. The following provides highlights of our review of these programs:

ESEA Title I, Part A and IDEA, Part B

  • New Jersey has allocated $91.5 million—50 percent of its total allocation of $183 million—in Recovery Act funds to LEAs under ESEA Title I, Part A. Similarly, New Jersey has allocated $186 million in Recovery Act funds under IDEA, Part B to LEAs.
  • As of September 1, 2009, New Jersey LEAs have not drawn down funds for ESEA Title I or IDEA, Part B. However, state officials reported that LEAs are spending on Recovery Act-funded activities such as summer programs for at-risk students or purchases of equipment and materials for students with disabilities.
  • In an effort to expedite spending, New Jersey approved applications in 199 of the state’s 616 LEAs to implement summer activities and procure materials and equipment for which they will receive reimbursement with ESEA Title I and IDEA, Part B Recovery Act funds.
  • Some pre-existing weaknesses with monitoring at the state department of education and with managing funds at the local level, as well as competing priorities for state department of education staff and responsibility for monitoring 616 LEAs, will make monitoring the use of education Recovery Act funds a challenge for New Jersey.

Highway Infrastructure Investment

  • The U.S. Department of Transportation’s (DOT) Federal Highway Administration apportioned $652 million in Recovery Act funds to New Jersey, of which $196 million—30 percent—was suballocated to metropolitan and other areas.
  • As of September 1, 2009, the New Jersey Department of Transportation (NJDOT) had awarded contracts, or advertised for bids on, 60 projects, obligating a total of $473 million in highway infrastructure funds. Most of these projects involve road paving, but many also involve bridge replacement and improvements, along with streetscape improvements.

Transit Capital Assistance Funds

  • DOT’s Federal Transit Administration (FTA) apportioned more than $1 billion in Recovery Act Transit Capital Assistance funds to New Jersey and urbanized areas that include New Jersey for transit projects. As of September 1, 2009, FTA concluded that the 50 percent obligation requirement had been met for New Jersey and the urbanized areas located in the state.
  • New Jersey Transit (NJT) is the primary public operator of bus and commuter rail transit lines in New Jersey. As of August 20, 2009, NJT had received nearly $357 million for Transit Capital Assistance projects.
  • The largest funded project is design and early construction of a new rail tunnel under the Hudson River, which will receive $130 million in Recovery Act funds.

Weatherization Assistance Program

  • As of August 31, 2009, the state had obligated $24.1 million of its initial allocation of weatherization funds and disbursed $3.4 million of these funds.[2]
  • New Jersey has begun to spend weatherization funds, particularly for start-up activities such as hiring and training. The state plans to use Recovery Act funds to weatherize 13,400 homes.
  • The Department of Labor (Labor) has issued prevailing wage rate information for weatherizaton work, which will facilitate weatherization program implementation.
  • The state agency administering the program will rely on the automated systems it has used for non-Recovery Act weatherization work to track accountability.
  • New Jersey officials stated that they will be able to meet Recovery Act reporting requirements.

Updated funding information on SFSF and the Public Housing Capital Fund

  • The U.S. Department of Education has awarded New Jersey about $891 million, or about 67 percent of its total SFSF allocation. As of September 1, 2009, New Jersey has allocated these funds to LEAs, but LEAs have not drawn down funds. SFSF funds have helped New Jersey restore and increase the state’s portion of education aid to LEAs for the 2009-2010 school year.
  • New Jersey has 80 public housing agencies to which HUD allocated Recovery Act formula grants. In total, these public housing agencies received $104 million in Public Housing Capital Fund formula grants. As of September 5, 2009, 64 of these public housing agencies have obligated $31 million, and 46 of these public housing agencies have drawn down $6.1 million.

Full September ReportBack to top

Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed
Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (Appendixes)
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] New Jersey’s Department of Community Affairs, the agency administering the weatherization program, defines the term “obligate” as monies available for Community Action Agencies (CAA) to draw down and the term “disburse” as monies CAAs have drawn down.
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