Pennsylvania – September 23, 2009

The content below was excerpted from the Pennsylvania Appendix (PDF, 57 pages) of GAO's third bimonthly review of the Recovery Act.[1]

Contents

Use of Funds

We reviewed four programs in Pennsylvania funded under the Recovery Act—Highway Infrastructure Investment funds, Transit Capital Assistance Program funds, Weatherization Assistance Program, and the Workforce Investment Act (WIA) Youth Program summer employment activities. We selected these programs for different reasons. Contracts for highway projects using Highway Infrastructure Investment funds have been under way in Pennsylvania for several months, and provided an opportunity to review financial controls, including the oversight of contracts. The Transit Capital Assistance Program funds had a September 1, 2009, deadline for obligating a portion of the funds, and further, provided an opportunity to review nonstate entities that receive Recovery Act funds. The Weatherization Assistance Program received a significant funding increase and is considered a high-risk program by Pennsylvania’s Bureau of Audits. We selected the WIA Youth Program in Pennsylvania because many of the local workforce areas were setting up summer youth employment activities for 2009. 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; and how results were being assessed. We reviewed contracting procedures and examined two specific contracts under both the Recovery Act Highway Infrastructure Investment funds and the WIA Youth Program. In addition to these four programs, we also updated funding information on three Recovery Act education programs—the U.S. Department of Education (Education) State Fiscal Stabilization Fund (SFSF); Title I, Part A, of the Elementary and Secondary Education Act of 1965 (ESEA), as amended; and the Individuals with Disabilities Education Act (IDEA), Parts B and C—which were awaiting spending authority under Pennsylvania’s state budget. We also updated the funding information for the Public Housing Capital fund to provide perspective on nonstate entities receiving Recovery Act funds. Consistent with the purposes of the Recovery Act, funds from the programs we reviewed are being directed to help Pennsylvania and local governments stabilize their budgets and to stimulate infrastructure development and expand existing programs—thereby providing needed services and potential jobs. We also reviewed the Pennsylvania Accountability Office’s plans for reporting and assessing the effects of spending. The following provides highlights of our review:

Updated Funding Information on Three Education Programs

  • For its SFSF, Education directed Pennsylvania to resubmit its application before receiving the first portion of its $1.9 billion allocation. In addition, because the Governor and General Assembly disagree about how to use the SFSF funds, local school districts will remain uncertain about this funding until Pennsylvania adopts a final budget for the fiscal year that began July 1, 2009.
  • For Title I, Part A, of ESEA, Education has awarded Pennsylvania about $400.6 million in Recovery Act funds. Based on information available as of September 3, 2009, Pennsylvania has allocated $368 million to local education agencies (LEA), but the stopgap budget—adopted on August 5, 2009—provided authority to spend only $199.4 million. These funds are to be used to help educate disadvantaged youth.
  • For IDEA, Parts B and C, Education has awarded Pennsylvania about $456 million in Recovery Act funds. Pennsylvania had allocated $267 million to LEAs; however, the stopgap budget provided only $228.5 million in spending authority. These funds are to be used to support special education and related services for infants, toddlers, children, and youth with disabilities.

Highway Infrastructure Investment Funds

  • The U.S. Department of Transportation’s (DOT) Federal Highway Administration (FHWA) apportioned $1.026 billion in Recovery Act funds to Pennsylvania, of which 30 percent was required to be suballocated primarily based on population for metropolitan, regional, and local use. As of September 1, 2009, the federal government had obligated $874.9 million, and $50.5 million has been reimbursed by FHWA. As of August 31, 2009, Pennsylvania had awarded contracts for 219 projects, mainly for bridge improvements and roadway resurfacing.
  • In July 2009, as a result of favorable bids on its original Recovery Act projects, Pennsylvania used about $134.8 million of Recovery Act funds to add 52 projects for a total of 293 projects. Four existing projects using about $69 million in Recovery Act funds were also modified. According to Pennsylvania, the additional projects and modifications were covered by the original apportionment.
  • Two Recovery Act projects we reviewed in depth have started and are making progress. First, the bridge rehabilitation project in Bedford County began in July 2009 and was 40 percent complete by early September. This project is expected to be finished by November 2009. Second, the transportation enhancement project in Chester County to construct and upgrade over 1,000 access ramps for persons with disabilities began in May 2009 and was estimated to have about 29 percent of the design and 21 percent of the construction work complete by early September. This project is expected to be finished in May 2010.

Transit Capital Assistance Program Grants

  • DOT’s Federal Transit Administration (FTA) apportioned $327.5 million in Recovery Act Transit Capital Assistance formula grant funds to urbanized and nonurbanized areas in Pennsylvania. As of September 1, 2009, $257.5 million had been obligated for urbanized areas, and $30.2 million had been obligated for nonurbanized areas.
  • Three transit agencies we visited plan to use their Recovery Act funds for rehabilitating rail lines and stations in Philadelphia, completing a tunnel to extend rail service from downtown Pittsburgh to its North Shore area, and constructing a transit center in Butler, Pennsylvania, that would serve local bus lines. In Pittsburgh and Butler, Recovery Act funds helped sustain projects that otherwise would have been suspended or scaled down significantly. In Philadelphia, favorable bids on its original Recovery Act projects allowed for six additional Recovery Act projects.
  • As of September 1, 2009, FTA concluded that the 50 percent obligation requirement had been met for Pennsylvania and its urbanized areas.

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 provided Pennsylvania with its initial 10 percent allocation (about $25 million) on March 27, 2009, and another 40 percent allocation (about $101 million) when DOE approved Pennsylvania’s weatherization plan on August 25, 2009.
  • As of September 1, 2009, Pennsylvania had not obligated any of its weatherization funds but was working to issue contracts to 43 local weatherization agencies. Pennsylvania expects to begin work in November 2009 to weatherize 29,700 homes and create an estimated 940 jobs.

WIA Youth Program Summer Employment Activities

  • The U.S. Department of Labor (Labor) allotted about $40.6 million to Pennsylvania in WIA Youth Program Recovery Act funds. Pennsylvania has allocated $34.6 million to local workforce boards, and as of September 1, 2009, the local workforce boards had expended $11 million.
  • Pennsylvania enrolled more than 8,800 youth, exceeding its enrollment goal of 8,700. The two workforce investment boards we visited provided employment activities that combined work readiness activities with academic learning components. For example, one university-affiliated contractor in Philadelphia ran an urban nutrition employment activity at local high school sites with an educational component that required participants to submit at least three applications to institutions of higher education (IHE).
  • While Pennsylvania exceeded its enrollment plans, local workforce investment areas encountered challenges implementing the summer youth employment activities. For example, in Philadelphia, the contractor stated that the work start dates of approximately 25 percent of youth participants were delayed because of delays in the enrollment paperwork process.

Updated Funding Information on Public Housing Capital Funding

  • The U.S. Department of Housing and Urban Development (HUD) has allocated about $212 million in Recovery Act funding to 82 public housing agencies in Pennsylvania. Based on information available as of September 5, 2009, about $65.0 million (31 percent) had been obligated by 68 of those agencies.

Reporting and Assessing the Effects of Spending

  • Pennsylvania’s Accountability Office plans to centralize submission of quarterly recipient reporting for Recovery Act funds received by Pennsylvania state agencies. State program agencies receiving Recovery Act funds—the direct recipients—are responsible for collecting and entering any additional data for their subrecipients and vendors into the centralized Recovery Act data warehouse. The Accountability Office is developing internal controls and a quality review process to help ensure that the data are complete and accurate before submission. Pennsylvania’s Accountability Office expects to file at least 40 recipient reports for the October 10, 2009, deadline.
  • Looking beyond the recipient reporting on jobs and project status, Pennsylvania’s Accountability Office is developing a performance measure framework to track results of Pennsylvania’s Recovery Act spending and report meaningful outcomes to the public. After the first round of recipient reporting is complete in October, Pennsylvania’s Accountability Office will continue work to finalize the performance measures and begin collecting data for publication on Pennsylvania’s recovery Web site, www.recovery.pa.gov.

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
GAO-09-1016
Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (Appendixes)
GAO-09-1017SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
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Phillip R. Herr

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Mark E. Gaffigan

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