New York – July 8, 2009

The content below was excerpted from the New York Appendix (PDF, 53 pages) of GAO's second bimonthly review of the Recovery Act.[1]


Use of Funds

Our work in New York focused on nine federal programs, selected primarily because they have begun disbursing funds to states and they include both existing programs receiving significant amounts of Recovery Act funds or significant increases in funding, and new programs. Program funds are being directed to help New York stabilize its budget and support local government entities, particularly school districts, and several programs are expanding 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 York had drawn down about $2.6 billion in increased FMAP grant awards and is using funds made available as a result of the increased FMAP to cover the state's increased Medicaid caseload, work on the state's goal to restructure provider reimbursement, and to offset the state's budget deficit. [2]

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

Education has awarded New York about $2.02 billion in Recovery Act SFSF funds, or about 67 percent of its total SFSF allocation of about $3 billion. As of June 30, 2009, New York had not obligated or disbursed any SFSF funds. New York is planning to use these funds to offset the state budget gap and restore state aid to school districts and 2-year public colleges. For example, the New York City School District will use SFSF education stabilization funds to provide basic education services that would not be offered without the Recovery Act funds.

Highway Infrastructure Investment Funds

The U. S. Department of Transportation's Federal Highway Administration (FHWA) apportioned about $1.12 billion in Recovery Act funds to the New York State Department of Transportation (NYSDOT) in March 2009. As of June 25, 2009, the U.S. Department of Transportation had obligated about $589 million to New York. According to NYSDOT, they have used Recovery Act funds for about 240 projects; 105 of these projects had been advertised for bids and 34 contracts had been signed as of June 17, 2009. Many of these projects are preventive maintenance efforts or repaving projects that could be started quickly and completed in 3 years. For example, we visited 1 of the 11 bridges to be repainted, under a state contract, in two economically distressed areas. Without Recovery Act funding this project would have been scaled back or delayed.

Title I, Part A, of the Elementary and Secondary Education Act (ESEA) of 1965 and Individuals with Disabilities Education Act (IDEA), Parts B and C

Through the Recovery Act, over the next 2 years New York school districts expect to receive an additional $907 million in ESEA Title I funds and about $760 million in increased IDEA funds. As of June 30, 2009, New York had been allocated about $453.5 million of the ESEA Title I and about $409 million of the IDEA funds, according to New York State Division of the Budget officials. As of June 30, 2009, New York had not obligated or disbursed any ESEA Title I and IDEA funds. New York school districts plan to use these funds to expand existing programs. For example, the New York City School District alone estimates that 180 schools with more than 90,000 students will receive ESEA Title I funding for the first time under the Recovery Act.

Weatherization Assistance Program

The U.S. Department of Energy allocated about $395 million in Recovery Act weatherization funding to New York. As of June 30, 2009, the state had not obligated any of these funds. It plans to begin disbursing its funds in July 2009. New York plans to use the Recovery Act weatherization funds to greatly expand its existing weatherization program; the state estimates that about 45,000 dwelling units will be weatherized using Recovery Act funds.

Workforce Investment Act Youth Program

The U.S. Department of Labor allotted over $71 million to New York in WIA Recovery Act funds. After reserving 15 percent for statewide activities, the New York State Department of Labor has allocated $60.8 million of this allotment to local workforce investment boards within 30 days of receipt of funds as required by the U.S. Department of Labor guidance. New York State plans to use the increased Recovery Act WIA funds to provide over 23,400 youth with summer youth/work experience activities. We visited projects in New York City, Utica, and Buffalo, where plans were being developed to provide increased WIA work sites, additional job training, and new programs, including some that would focus on green jobs in landscape design and public horticulture.

Edward Byrne Memorial Justice Assistance Grants

The U.S. Department of Justice's Bureau of Justice Assistance has awarded approximately $67 million in Recovery Act funding directly to New York. Based on information available as of June 30, 2009, no Recovery Act funds had been obligated by the New York State Department of Criminal Justice Services, which administers these grants for the state. According to state officials, these funds will be used to implement recently enacted drug law reform efforts, provide job placement services for the formerly incarcerated, and support other programs.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development allocated about $500 million in Recovery Act funding to 84 public housing agencies in New York. Based on information available as of June 20, 2009, about $98.1 million (19.5 percent) had been obligated by 36 of those agencies. The three public housing authorities we visited in Binghamton, Buffalo, and Glen Cove indicated that they were planning to spend the increased funding on an expanded community center, a gymnasium, a computer lab, projects aimed at increasing energy efficiency, and other site improvements.

For more information on Recovery Act program funding within New York State, see the Office of the State Comptroller's Open Book, the Web site that provides transparency for contracts, expenditures, and local government funds, at Note, however, in some cases the Recovery Act program numbers in this report may not correspond exactly to those reported at this site because we use different sources and/or timeframes.

Safeguarding & TransparencyBack to top

As we noted in our April 2009 Recovery Act report, New York plans to track and monitor Recovery Act funds mostly through its existing systems. New York officials recently told us that they have not experienced any challenges with regard to creating discrete budget and accounting codes to track Recovery Act funds; however, a few agencies have expressed the need for more specific guidance from the Office of Management and Budget (OMB) and federal agencies on tracking certain programs. Standards adopted by the Office of the State Comptroller and the New York State Division of the Budget's internal control and internal audit requirements provide state agencies with guidance to (1) conduct risk assessments of agency operations, (2) prepare audit plans to guide their work, (3) evaluate their agencies' internal controls, and (4) monitor and assess their effectiveness. Individual agencies, as well as the Economic Recovery and Reinvestment Cabinet Internal Controls and Fraud Prevention Working Group, are planning to conduct additional oversight of Recovery Act funds, but indicated to us that the lack of funds for monitoring activities may somewhat impede their ability to adequately monitor Recovery Act funds.

Assessing the Effects of SpendingBack to top

Throughout April, May, and June 2009, most of the state's management focus was on reducing the state budget gap, while applying for and spending Recovery Act funds through its various program agencies. Although state agencies have taken steps to adapt current reporting mechanisms to prepare to meet Recovery Act reporting requirements, some of these agencies continue to express concerns about meeting Recovery Act reporting requirements and continue to look to federal agencies and the Office of the Management and Budget (OMB) for further guidance on how to define report variables such as jobs created and/or sustained. Nevertheless, New York officials throughout the state agencies and at some of the localities we visited provided some preliminary estimates. For example, the New York City School District anticipates saving 14,000 jobs as the result of Recovery Act funding through several programs.

Full July ReportBack to top

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses
Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses (Appendixes)
  • [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 (BJA) solicitation for local governments closed on June 17; therefore, not all of these funds have been awarded.
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