Pennsylvania – September 20, 2010

The content below was excerpted from the Pennsylvania Appendix (PDF, 45 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

Our work in Pennsylvania focused on programs funded under the Recovery Act. These programs were selected primarily because they received significant amounts of Recovery Act funds. We reviewed the State Energy Program (SEP) as Pennsylvania received a nearly 100 times increase in funding under the Recovery Act compared to the state's base allocation of $1.1 million in recent years. In addition, the SEP in Pennsylvania has been identified by the Pennsylvania Bureau of Audits as high risk. We reviewed the Energy Efficiency and Conservation Block Grants (EECBG) program, which the Recovery Act funded for the first time and provided $106.6 million of to Pennsylvania. The U.S. Department of Energy has encouraged EECBG recipients to obligate 90 percent of the funds by June 2010 and to spend at least 20 percent by September 2010. We also reviewed the Weatherization Assistance Program in order to provide an update concerning Pennsylvania's progress against spending and production goals, and its progress in training and certifying all weatherization workers working on Recovery Act projects ahead of the state's self-imposed July 1, 2010 deadline. We continued to review two low income housing tax credit assistance programs—The Tax Credit Assistance Program (TCAP) and Grants to States for Low-income Housing Projects in Lieu of Low-income Housing Credits Program under Section 1602 of division B the Recovery Act. Finally, we reviewed the Recovery Act's Public Housing Capital Fund program in order to provide updated information on Public Housing Capital Fund formula grants, which had a 1-year deadline for obligating all funds by March, 2010, and Public Housing Capital Fund competitive grants. For these programs, we collected relevant documentation and interviewed program officials to review the status of the program's funding, how funds are being used and monitored, and expected outcomes.

We continued to track the state's fiscal condition and also visited two local governments—the County of Berks as well as the City of Philadelphia—to discuss the amount of Recovery Act funds each expects to receive and how those funds will be used. We also contacted state and local auditors about oversight and auditing of Recovery Act spending in Pennsylvania.

What We FoundBack to top

State fiscal condition

The Department of Energy (DOE) awarded $99.7 million to Pennsylvania in State Energy Program (SEP) funds. The state plans to fund alternative and renewable energy projects—including solar, geothermal, and wind projects—and commercial retrofit loans and to expand existing geothermal loans and solar rebate programs. As of August 15, 2010, Pennsylvania has obligated about $72.9 million and expects to obligate the remaining funds by September 2010; about $24.4 million has been expended. Based on preliminary estimates, Pennsylvania expects that these projects, loans, and rebates, in aggregate, will generate enough energy to power 9,200 homes each year and will also reduce carbon dioxide emissions by the equivalent of taking more than 500,000 cars off the road for one year.

Energy Efficiency and Conservation Block Grant

DOE awarded Pennsylvania and its cities and counties about $106.6 million in Recovery Act Energy Efficiency and Conservation Block Grant (EECBG) funds. Specifically, DOE awarded $23.6 million directly to the state, most of which was competitively awarded to local governments and nonprofits, and $83.0 million directly to 43 local governments across Pennsylvania. Recipients are using funds to increase energy efficiency through projects including improvements to building heating and cooling systems as well as lighting. For example, the County of Berks is using its $2.97 million grant to upgrade a boiler to run on natural gas and repair steam pipes. Philadelphia is using its $14.1 million award for onetime projects, such as converting to 85,000 energy-efficient traffic signals, and establishing a new revolving loan fund for commercial building retrofits.

Weatherization Assistance Program

Pennsylvania is in line to receive $252.8 million in Recovery Act weatherization funds and has expended $86.3 million as of August 15, 2010. Local weatherization agencies have weatherized 10,287 homes—about 72 percent of the state's target to weatherize 14,355 homes by September 30, 2010, and about 35 percent of its overall target to weatherize 29,700 homes by March 31, 2012. Although Pennsylvania chose to set a deadline to train and certify all weatherization workers working on Recovery Act projects by July 1, the state is working to identify weatherization workers not yet trained and certified. Pennsylvania is not yet eligible to access its final 50 percent of Recovery Act funding and is working to meet the DOE monitoring and quality control requirements.

Low-Income Housing Tax Credit Assistance Programs

Pennsylvania received $95.1 million in Tax Credit Assistance Program (TCAP) funds and $229.9 million in Grants to States for Low-income Housing Projects in Lieu of Low-income Housing Credits Program under Section 1602 of division B of the Recovery Act (Section 1602 Program). As of August 18, 2010, Pennsylvania had committed about $85.0 million (89 percent) in TCAP funds and $214.5 million (93 percent) in Section 1602 Program funds to 60 projects, including a project building 12 duplexes for low-income families in Northumberland. According to Department of Housing and Urban Development (HUD) data, Pennsylvania had disbursed about $43.4 million in TCAP funds as of August 1, 2010. According to Department of the Treasury (Treasury) data, Pennsylvania had disbursed $117.6 million in Section 1602 Program funds as of July 31, 2010.

Public housing

In Pennsylvania, 82 public housing authorities received $212.2 million in Public Housing Capital Fund formula grants. As of August 7, 2010, all authorities have obligated all funds and in aggregate have drawn down a total of $126 million. Fourteen authorities received $55.2 million in Public Housing Capital Fund competitive grants under the Recovery Act and, as of August 7, 2010, these authorities have obligated about $50.7 million, and 12 authorities have drawn down a total of $3.4 million. At two authorities we visited, Harrisburg is using its competitive grant to renovate existing housing featuring new energy-efficiency improvements, and Philadelphia is using its competitive grants to build 194 handicapped-accessible units and a new mixed-use development.

State fiscal condition and use of Recovery Act funds

The governor of Pennsylvania signed a $28 billion state general fund budget for fiscal year 2010-2011 on July 6, 2010. The budget is an increase of about $200 million over the 2009-2010 budget. It includes over $1.9 billion in Recovery Act funding including State Fiscal Stabilization Fund (SFSF) funds and Federal Medical Assistance Percentage (FMAP) funds.

State accountability

According to state budget and accounting officials, Pennsylvania has taken actions to require state agencies to report quarterly on their corrective action plans to resolve prior year Single Audit[2] findings and to improve subrecipient monitoring. Pennsylvania's Single Audit Report for the fiscal year ended June 30, 2009 was jointly issued by the Auditor General and an independent public accounting firm and received by the Federal Audit Clearinghouse on June 30, 2010, 3 months after the due date required by statute. The report had 7 material weakness findings specifically related to the approximately $1.47 billion in Recovery Act expenditures in the fiscal year ended June 30, 2009. Auditor General officials expect that an increased number of Recovery Act awards and related guidance will increase their workload for the Single Audit for fiscal year ended June 30, 2010. The Bureau of Audits, an internal audit bureau in the state budget office, is targeting audits of Recovery Act programs considered high risk in Pennsylvania, including weatherization and the SEP, and has issued four Recovery Act audit reports to date. In addition, the Pennsylvania Accountability Office posts Recovery Act outcome measures to the State's Recovery Act Web site as they are made available.

Local uses of Recovery Act funds

The County of Berks and the City of Philadelphia received Recovery Act funds totaling $5.6 million and $252.1 million, respectively. As of June 30, 2010, Berks has expended about 47 percent of its funds to support onetime projects, such as extending a road in an industrial park, as well as new services to prevent homelessness. As of August 23, 2010, Philadelphia has expended about 11 percent of funds awarded to support activities and programs, many of which, according to officials, will likely end after Recovery Act funds are expended.

Full September ReportBack to top

Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
GAO-10-999
Recovery Act: Opportunities to Improve Management and Strengthen Accountability over States' and Localities' Uses of Funds
(Appendixes)
GAO-10-1000SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] Single Audits are prepared to meet the requirements of the Single Audit Act, as amended, (31 U.S.C. § 7501-7507) and provide a source of information on internal control and compliance findings and the underlying causes and risks. The Single Audit Act requires states, local governments, and nonprofit organizations expending $500,000 or more in federal awards in a year to obtain an audit in accordance with the requirements set forth in the act. A Single Audit consists of (1) an audit and opinions on the fair presentation of the financial statements and the Schedule of Expenditures of Federal Awards; (2) gaining an understanding of and testing internal control over financial reporting and the entity's compliance with laws, regulations, and contract or grant provisions that have a direct and material effect on certain federal programs (i.e., the program requirements); and (3) an audit and an opinion on compliance with applicable program requirements for certain federal programs.
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