Recovery Act:

Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability

GAO-10-231: Published: Dec 10, 2009. Publicly Released: Dec 10, 2009.

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This report is the fourth in a series responding to a mandate under the American Recovery and Reinvestment Act of 2009 (Recovery Act). As of November 27, 2009, $69.1 billion, or about one quarter of the approximately $280 billion of total Recovery Act funds for programs administered by states and localities, had been paid out. The largest programs were the Medicaid Federal Medical Assistance Percentage (FMAP), the State Fiscal Stabilization Fund (SFSF), and highways. The Government Accountability Office's (GAO) work continues to focus on 16 states and the District of Columbia (District).

Of their increased FMAP grant awards for federal fiscal year 2009, the 16 states and the District had drawn down about $22.3 billion, or 97 percent of the funds available, as of November 30, 2009. Through November 16, 2009, in the 16 states and the District, $11.9 billion (76 percent) of Recovery Act highway funds had been obligated for nearly 4,600 projects and $1.9 billion (16 percent) had been reimbursed. Nationally, $20.4 billion (77 percent) had been obligated for over 8,800 projects and $4.2 billion (20 percent) had been reimbursed. Almost half of Recovery Act obligations nationally have been for pavement improvements--resurfacing, rehabilitating, and reconstructing roadways. Of the $7.5 billion in Recovery Act formula funding made available nationally for transit projects, $6.7 billion (88 percent) had been obligated through November 5, 2009. Most of these obligations are being used to upgrade transit facilities, improving bus fleets and light rail systems, and conducting preventive maintenance. As of November 6, 2009, of the Recovery Act funds available to them, the 16 states and the District had drawn down about $8.4 billion (46 percent) in SFSF; $735 million (11 percent) in Elementary and Secondary Education Act Title I, Part A funds; and $755 million (10 percent) in Individuals with Disabilities Education Act (IDEA), Part B funds. GAO surveyed a sample of local educational agencies about their planned uses of Recovery Act funds and found (1) retaining jobs is the primary planned use, with 63 percent planning to use over 50 percent of their SFSF funds to retain jobs; (2) other planned uses include nonrecurring items such as equipment; and (3) most report placing great importance on educational goals and reform. The Department of Housing and Urban Development has entered into funding agreements with 3,121 public housing agencies and made available nearly all of the almost $3 billion in public housing formula grant funds provided under the Recovery Act. As of November 14, these agencies had reported obligating about half of the funds HUD had made available. Housing agencies GAO visited are using funds to replace roofs, windows, and floors; upgrade kitchens and baths, and renovate rental units. Regarding the Weatherization Assistance Program, nationally, the states reported that, as of September 30, 2009, they had spent about $113 million (2 percent) of the $5 billion in Recovery Act funding and had completed weatherizing about 7,300 (1 percent) of the 593,000 housing units planned for weatherization. The Recovery Act also included a $100 million appropriation for the Emergency Food and Shelter Program. Local recipient organizations in the 16 states and the District were awarded almost $66.2 million and plan to use the funds primarily for "other food" services such as food banks and pantries, food vouchers, and rent and mortgage assistance.