Pennsylvania – July 8, 2009

The content below was excerpted from the Pennsylvania Appendix (PDF, 48 pages) of GAO's second bimonthly review of the Recovery Act.[1]


Use of Funds

GAO’s work focused on nine federal programs, selected primarily because they have begun disbursing funds to states, include new programs, or include existing programs receiving significant amounts of Recovery Act funds or a significant increase in funding. Program funds are being directed to help Pennsylvania 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, Pennsylvania has received nearly $1.1 billion in increased FMAP grant awards, of which it has drawn down just over $957 million. This is over 87 percent of the awards to date. Pennsylvania is planning to use the funds made available as a result of the increased FMAP to cover the state’s increased Medicaid caseload, ensure that prompt payment requirements are met, maintain current populations and benefits, and offset the state budget deficit.[2]

Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $1.026 billion in Recovery Act funds to Pennsylvania, of which 30 percent was required to be suballocated to metropolitan and other areas. As of June 25, 2009, the federal government had obligated $729 million, and Pennsylvania had advertised for bids on $754 million. For example, one project in Bedford County is a bridge rehabilitation that is expected to begin in mid-July 2009 and be completed by November 2009. A transportation enhancement project in Chester County to construct and upgrade over 1,000 access ramps for people with disabilities began in May 2009 and is expected to be completed in May 2010. Pennsylvania plans to use Recovery Act funds for 242 projects mainly for bridge rehabilitation and roadway resurfacing. This includes work on approximately 400 bridges, about 100 of which are structurally deficient.

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

As of June 30, 2009, Pennsylvania had not yet received its initial allocation of $1.3 billion of its total $1.9 billion allocation for SFSF. The Governor submitted a preliminary application to Education for initial funding on April 24, 2009, and submitted a final application on June 26, 2009. Pennsylvania will file an amended application thereafter, if necessary, based on the education provisions of the final fiscal year 2009-10 budget. According to state officials, the Governor’s budget proposes to use the SFSF funds to increase education spending for school districts, whereas the Pennsylvania Senate has passed a bill to use the SFSF funds to hold education funding level. Local school districts will be uncertain about the SFSF funding until Pennsylvania adopts its budget for the fiscal year beginning July 1, 2009.

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

Education has awarded Pennsylvania $200 million in Recovery Act ESEA Title I, Part A, funds or 50 percent of its total allocation of $400 million. Of these funds Pennsylvania has allocated $385 million to state local education agencies, based on information available as of June 30, 2009. Pennsylvania plans to make these funds available to local education agencies on or after July 1, 2009, to help educate disadvantaged youth. For example, the School District of Philadelphia plans to use the funds to provide a 4-week summer school program and to increase the number of school counselors, and the Harrisburg School District will use the funds to avoid teacher layoffs.

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

Education has awarded $228 million in Recovery Act IDEA, Part B & C, funds, or 50 percent of its total allocation of $456 million. Of these funds, Pennsylvania has allocated $408 million to local education agencies, based on information as of June 26, 2009. Pennsylvania plans to make these funds available to local education agencies on or after July 1, 2009, to support special education and related services for children and youth with disabilities. For example, the School District of Philadelphia plans to fund teacher professional development and hire coaches to help special education teachers.

Weatherization Assistance Program

The U.S. Department of Energy (DOE) allocated about $253 million in Recovery Act weatherization funding to Pennsylvania for a 3-year period. DOE had provided Pennsylvania with its initial 10 percent allocation of funds for this program (approximately $25 million), and Pennsylvania had obligated none of these funds as of June 30, 2009. Pennsylvania plans to begin disbursing its Recovery Act funds in July 2009 to weatherize at least 29,700 houses and create an estimated 940 jobs.

Workforce Investment Act Youth Program

The U.S. Department of Labor allotted about $40.6 million to Pennsylvania in Workforce Investment Act Youth Recovery Act funds. Pennsylvania has allocated $34.6 million to local workforce boards, but only 40 percent of the allocations are available for the local boards to spend before July 1, 2009; state officials expect the balance to be available on or after July 1 when they expect Pennsylvania to enact its state budget. The workforce boards’ summer youth programs are set to begin operating in early July. Workforce boards in Pennsylvania plan to use 70 to 90 percent of Recovery Act funds under this program by September 30, 2009, to create about 8,700 summer jobs for its youth.

Edward Byrne Memorial Justice Assistance Grants

The Department of Justice’s Bureau of Justice Assistance has awarded $45.5 million directly to Pennsylvania in Recovery Act funding. As of June 30, 2009, none of these funds have been obligated by the Pennsylvania Commission on Crime and Delinquency, which administers these grants for the state.[3] The commission issued the first in a series of requests for proposals on June 18, 2009. The commission plans to use its state grant funds to fund initiatives such as criminal records improvement, data management focusing on technology, assistance with local criminal justice strategic planning, data collection and program evaluation, gun violence reduction, and mental health programs.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development has allocated about $212 million in Recovery Act funding to 82 public housing agencies in Pennsylvania. Based on information available as of June 20, 2009, about $5.8 million (2.7 percent) had been obligated by 42 of those agencies. At the two housing authorities we visited (in Harrisburg and Philadelphia), this money, which flows directly to public housing authorities, will be used for various capital improvements, including rehabilitating vacant housing units and, to a lesser extent, constructing new units, upgrading electrical and mechanical systems to meet building codes, and installing energy-efficient equipment.

Safeguarding & TransparencyBack to top

Pennsylvania will take several actions to safeguard Recovery Act funds and ensure transparency. It will use its existing integrated accounting system to track Recovery Act funds flowing through the state government. In June 2009, the Bureau of Audits completed its risk assessment of about 90 programs receiving Recovery Act funds and designated each program as high, medium, or low risk. The bureau also plans to focus attention on resolving Single Audit report findings and reducing the number of repeat findings. Agencies will be required to report quarterly on the status of corrective actions for Single Audit report findings, and the first quarterly reports will be due in October 2009. The Pennsylvania Stimulus Oversight Commission, chaired by the Chief Accountability Officer, holds public meetings to discuss progress on implementing Recovery Act programs. Pennsylvania’s Auditor General also anticipates work auditing and investigating Recovery Act funds received by state and local agencies.

Assessing the Effects of SpendingBack to top

Pennsylvania’s Chief Accountability Officer is responsible for developing and using performance measures to demonstrate outcomes associated with Recovery Act spending and projects. Pennsylvania agencies continue to express concern about the lack of federal guidance on assessing the results of Recovery Act spending. Both state and local officials said they are awaiting further guidance from the federal government, particularly related to additional performance measures they may have to track.

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 solicitation for local governments closed on June 17; therefore, not all of these funds have been awarded.
GAO Contact
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Phillip R. Herr

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Mark E. Gaffigan

Director, Natural Resources and Environment

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