New York – September 20, 2010

The content below was excerpted from the New York Appendix (PDF, 31 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

We reviewed six programs funded by the Recovery Act—three education programs and three energy programs. The three education programs we reviewed were (1) the State Fiscal Stabilization Fund (SFSF); (2) Title I, Part A of the Elementary and Secondary Education Act of 1965, as amended (ESEA); and (3) the Individuals with Disabilities Education Act, as amended (IDEA), Part B. All three of these programs are administered by the U.S. Department of Education (Education). The three energy programs we reviewed were the State Energy Program (SEP), the Energy Efficiency and Conservation Block Grant (EECBG), and the Weatherization Assistance Program (Weatherization). All three of these programs are administered by the U.S. Department of Energy (DOE). These programs were selected primarily because they are receiving significant amounts of Recovery Act funds, recently began disbursing funds to states, or both. We focused on how funds were being used, how safeguards were being implemented, and how results were being assessed. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-1000SP.

Our work in New York also included understanding the state's fiscal condition, visiting one locality—the Town of Brookhaven—to gain insight into its use of Recovery Act funds, and obtaining an update on the fiscal condition of one of the localities we visited for our December 2009 report—Steuben County[2]. We chose the local governments in order to visit a range of communities based on locality type, population size, and unemployment rates. Specifically, we visited the Town of Brookhaven because it is a suburban town and its unemployment rate is below the state's rate[3]. We followed up with Steuben County because it is a rural county with an unemployment rate above the state's rate. Finally, we reviewed the work being done by the accountability community to oversee the use of Recovery Act funds.

What We FoundBack to top

Funds from the programs we reviewed have helped New York prevent reductions in education and health care funding and improve the energy efficiency of public buildings and private residences. Recovery Act funds are also stimulating infrastructure development and expanding existing programs. The following summarizes findings for the areas we examined.

Education programs

Education allocated $4.98 billion in SFSF, ESEA Title I, Part A, and IDEA, Part B funds to New York, of which the state has made $3.9 billion available to local educational agencies (LEA). As of July 16, 2010, New York had drawn down about 48 percent of available funds. In examining the efforts of the Syracuse City School District (SCSD) and the New York State Education Department (NYSED) to safeguard this funding, we found that SCSD reduced its local spending on IDEA, Part B for the 2009–2010 school year despite being ineligible to do so. After we alerted SCSD officials to this maintenance–of–effort (MOE) issue, SCSD restored its local spending to the correct level. We also found that SCSD generally followed its procurement procedures in a sample of Recovery Act transactions. In addition, NYSED is continuing its monitoring of 30 high–risk LEAs.


On July 2, 2009, DOE approved New York's plan for SEP and allocated it $123.1 million in Recovery Act funds. The New York State Energy and Research Development Authority (NYSERDA)—the agency that administers SEP in New York—also elected to use $2.5 million from EECBG to augment one of its SEP programs[4]. As of June 30, 2010, NYSERDA had obligated $109.2 million of its total allocation and had expended $3.2 million to fund SEP activities under the Recovery Act. NYSERDA is distributing most of these funds to subrecipients in the state to pay for energy efficiency and renewable energy projects ranging from the retrofitting of street lights with more energy–efficient bulbs to the installation of solar photovoltaic systems in homes and businesses. NYSERDA is generally using its established procedures to track and monitor these projects with an increased emphasis on reporting and impact evaluation requirements.


New York was allocated over $175 million in formula–based Recovery Act EECBG funds. Some of the allocations went directly to local recipients, while those for smaller recipients went through the state. In New York, the funds for smaller recipients went through NYSERDA. We examined how NYSERDA and two direct–recipient localities—Orange County and the Town of Brookhaven—planned to use their EECBG funds, as well as their monitoring and reporting efforts. NYSERDA, Orange County, and the Town of Brookhaven received about $30 million, about $3.5 million, and about $4 million, respectively. As of June 15, 2010, NYSERDA reported that it had obligated 100 percent of its funds. As of June 30, 2010, Orange County reported that it had obligated about $19,000 (about 0.5 percent of its funds), and the Town of Brookhaven reported that it had obligated about $49,000 (about 1.2 percent of its funds). However, we found that both of these recipients initially underreported their obligations by over $500,000 combined but later corrected their reports. The recipients plan to use the funds for a variety of projects to improve the energy efficiency of public buildings and private homes and plan to evaluate program outcomes by tracking energy–savings metrics over time.


DOE allocated $394.7 million in Recovery Act funds to New York in March 2009 for Weatherization. In New York, these funds are administered by the Division of Housing and Community Renewal (DHCR). Through June 30, 2010, New York had weatherized almost 4,000 units—nearly three times the number it reported as of March 31, 2010, and about 8.5 percent of its goal of 45,000 units. DHCR officials said they believe this increase was the result of more multifamily projects working their way through the production process. These officials also believe similar jumps in production numbers will occur in future reporting periods because work on over 14,100 units was currently under way and energy audits—which are required before weatherization can begin—of over 19,200 additional units had been completed. Once work on these over 33,300 units is finished, New York will have completed about 82.7 percent of the units needed to meet its goal. DHCR officials believe the state will meet its goal by March 31, 2012.


The Stimulus Oversight Panel and Office of the State Comptroller (OSC) continue to actively monitor Recovery Act funds[5]. Since our May report, the New York State Inspector General (NYSIG) has completed a review of the Recovery Act Clean Water and Drinking Water State Revolving Funds (SRF). It has also continued to investigate complaints received through the Stimulus Complaint intakes. According to a NYSIG official, NYSIG has received approximately 25 allegations of waste, fraud, or abuse related to Recovery Act funds, predominately in the area of Weatherization. NYSIG expects to report on a number of substantiated claims in September. OSC's Local Government and School Accountability Division has completed its audits of transportation procurement procedures in 51 municipalities, with no significant findings, and has begun looking at how transportation claims are audited and paid for by local governments. OSC's Division of State Government Accountability has begun an audit of the Metropolitan Transportation Authority (MTA) that will examine, among other items, the systems and controls in place to ensure that Recovery Act funds are used for the proper purpose and to monitor waste, fraud, and abuse.

State and localities' use of Recovery Act funds

According to state budget officials, the receipt of Recovery Act funds has greatly affected the state's fiscal stability as it has prevented cuts in education and health care funding and helped the state address budget gaps over 3 fiscal years. The localities we visited plan to or are using Recovery Act funds for financing Medicaid, energy programs, and community development, among other things.

Full September ReportBack to top

Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] GAO, Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability (Appendixes), GAO-10-232SP (Washington, D.C.: December 2009).
  • [3] The U.S. Department of Labor's Bureau of Labor Statistics reported an 8.2 percent unemployment rate for New York State for June 2010. This rate is preliminary and has not been seasonally adjusted.
  • [4] NYSERDA is a public benefit corporation created in 1975. Its goal is to help New York meet its energy goals by reducing energy consumption, promoting the use of renewable energy sources, and protecting the environment. Currently, NYSERDA is primarily funded by state rate payers through a systems benefit charge.
  • [5] In July 2009, the Governor created a Stimulus Oversight Panel chaired by the New York State Inspector General (NYSIG) with the state Division of Human Rights Commissioner, Metropolitan Transportation Authority (MTA) Inspector General (IG), and Medicaid IG as members. The panel meets on a biweekly basis to examine the use of Recovery Act funds by each of the 22 New York State agencies designated to receive them, to develop coordination with other state and federal law enforcement partners responsible for the oversight of Recovery Act funds, to discuss the progress of investigations whose allegations were received through the Stimulus Complaint intakes, and to initiate proactive reviews when deemed necessary. State program departments and agencies also have internal audit departments that review Recovery Act funds, and localities and transit or housing authorities play a role in managing some Recovery Act funds that do not pass through state offices.
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