Printer Friendly

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 September 23, 2009

This report, the third in response to a mandate under the American Recovery and Reinvestment Reinvestment

Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash.

1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares.
 Act of 2009 (Recovery Act), addresses the following objectives: (1) selected states' and localities' uses of Recovery Act funds, (2) the approaches taken by the selected states and localities to ensure accountability for Recovery Act funds, and (3) states' plans to evaluate the impact of Recovery Act funds. GAO's work for the report is focused on 16 states and certain localities in those jurisdictions as well as the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States).  (District)-- representing about 65 percent of the U.S. population and two-thirds of the intergovernmental in·ter·gov·ern·men·tal  
adj.
Being or occurring between two or more governments or divisions of a government.



in
 federal assistance available. Under the Recovery Act, GAO collected and analyzed documents and interviewed state and local officials. GAO also analyzed federal agency guidance and spoke with Office of Management and Budget The Office of Management and Budget (OMB), formerly the Bureau of the Budget, is an agency of the federal government that evaluates, formulates, and coordinates management procedures and program objectives within and among departments and agencies of the Executive Branch.  (OMB OMB
abbr.
Office of Management and Budget

Noun 1. OMB - the executive agency that advises the President on the federal budget
Office of Management and Budget
) officials and with program officials at the federal agencies overseeing Recovery Act programs.

Across the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. , as of September 11, 2009, the Department of the Treasury had outlayed about $48 billion of the estimated $49 billion in Recovery Act funds projected for use in states and localities in federal fiscal year 2009, as shown in the figure. More than three quarters of the federal outlays Outlays

Payments on obligations in the form of cash, checks, the issuance of bonds or notes, or the maturing of interest coupons.
 has been provided through the increased Medicaid Federal Medical Assistance Percentage (FMAP FMAP Federal Medical Assistance Percentage
FMAP Fabrica Militar de Armas Portatiles
FMAP Florida Market Assistance Plan
FMAP Fan Marker Approach
FMAP Financial Management Assistance Project
) and the State Fiscal Stabilization Fund Stabilization fund may refer to:
  • Exchange Stabilization Fund
  • Stabilization Fund of the Russian Federation
  • Petroleum Fund of Norway (SPF)
  • Chile's Copper Stabilization Fund (CSF)
  • Oman's State General Reserve Fund (SGRF)
 (SFSF SFSF State Farm Service First ) administered by the Department of Education. All 16 states and the District have drawn down increased Medicaid FMAP grant awards of just over $20.3 billion for October 1, 2008, through September 15, 2009, which amounted to over 87 percent of funds available. All states and the District experienced Medicaid enrollment growth. States and the District reported they are planning to use the increased federal funds Federal Funds

Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements.

Notes:
These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve
 to cover their increased Medicaid caseload case·load  
n.
The number of cases handled in a given period, as by an attorney or by a clinic or social services agency.


caseload
Noun
 and to maintain current benefits and eligibility levels. Most states also reported that they would use freed-up funds to finance general state budget needs. A substantial portion of the approximately $35 billion the Recovery Act appropriated for highway infrastructure projects and public transit has been obligated nationwide and in the states and the District that are the focus of GAO's review. As of September 1, the Department of Transportation (DOT) had obligated approximately $11 billion for almost 3,800 highway infrastructure and other eligible projects in the 16 states and the District and had reimbursed these 17 jurisdictions about $604 million. As of September 15, 2009, the District and 15 of the 16 states covered by our review had received approval from Education for their initial SFSF funding applications. Pennsylvania had submitted an application to Education, but it had not yet been approved. As of August 28, 2009, Education had made $21 billion in SFSF grants for education available to the 15 states and the District--of which over $7.7 billion had been drawn down. While many program officials, employers, and participants believe the Workforce Investment Act summer youth program activities have been successful, measuring actual outcomes has proven challenging and may reveal little about what the program achieved. States have implemented various internal control programs; however, federal Single Audit guidance and reporting does not fully address Recovery Act risk. The Single Audit reporting deadline is too late to provide audit results in time for the audited entity to take action on deficiencies. Moreover, current guidance does not achieve the level of accountability needed to effectively respond to risks. States and localities as nonfederal recipients of Recovery Act funds are required to report quarterly on a number of measures, including the use of funds and estimates of the number of jobs created and retained. This unprecedented level of detailed information to be reported to be spoken of; to be mentioned, whether favorably or unfavorably.

See also: Report
 by a large number of recipients into a new centralized cen·tral·ize  
v. cen·tral·ized, cen·tral·iz·ing, cen·tral·iz·es

v.tr.
1. To draw into or toward a center; consolidate.

2.
 reporting system raises possible risk for the quality and reliability of these data.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Stanley J. Czerwinski Team: Government Accountability Office The Government Accountability Office (GAO) is the audit, evaluation, and investigative arm of the United States Congress, and thus an agency in the Legislative Branch of the United States Government. : Strategic Issues Phone: (202) 512-6520

Matters for Congressional Consideration

----------

Recommendation: To the extent that appropriate adjustments to the Single Audit process are not accomplished under the current Single Audit structure, Congress may wish to consider amending the Single Audit Act or enacting new legislation that provides for more timely internal control reporting, as well as audit coverage for smaller Recovery Act programs with high risk.

Status: In process

Comments: When we determine what steps the Congress has taken, we will provide updated information.

----------

Recommendation: To the extent that additional coverage is needed to achieve accountability over Recovery Act programs, Congress may wish to consider mechanisms to provide additional resources to support those charged with carrying out the Single Audit act and related audits.

Status: In process

Comments: When we determine what steps the Congress has taken, we will provide updated information.Recommendations for Executive Action

----------

Recommendation: To leverage Single Audits as an effective oversight tool for Recovery Act programs, the Director of OMB should provide more direct focus on Recovery Act programs through the Single Audit to help ensure that smaller programs with high risk have audit coverage in the area of internal controls and compliance.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To leverage Single Audits as an effective oversight tool for Recovery Act programs, the Director of OMB should develop requirements for reporting on internal controls during 2009 before significant Recovery Act expenditures occur, as well as for ongoing reporting after the initial report.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To leverage Single Audits as an effective oversight tool for Recovery Act programs, the Director of OMB should evaluate options for providing relief related to audit requirements for low-risk programs to balance new audit responsibilities associated with the Recovery Act.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To leverage Single Audits as an effective oversight tool for Recovery Act programs, the Director of OMB should develop mechanisms to help fund the additional Single Audit costs and efforts for auditing Recovery Act programs.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To leverage Single Audits as an effective oversight tool for Recovery Act programs, the Director of OMB should take steps to achieve sufficient participation and coverage in the Single Audit pilot program that provides for early written communication of internal control deficiencies to achieve the objective of more timely accountability over Recovery Act funds.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To reduce the impact of untimely Single Audit reporting, the Director of OMB should formally advise federal cognizant agencies to adopt a policy of no longer approving extensions of the due dates of single audit reporting package submissions beyond the nine month deadline.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To reduce the impact of untimely Single Audit reporting, the Director of OMB should widely communicate this revised policy to the state audit community and others who have responsibility for the conducting single audits and submitting the single audit reporting package.

Agency Affected: Executive Office of the President: Office of Management and Budget

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: The Secretary of Transportation should continue the Department's outreach to state DOTs and transit agencies to identify common problems in accurately fulfilling reporting requirements and provide additional guidance, as appropriate.

Agency Affected: Department of Transportation

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To better support state and local efforts to provide youth with employment and training in green jobs, the Secretary of Labor should provide additional guidance about the nature of these jobs and the strategies that could be used to prepare youth for careers in green industries.

Agency Affected: Department of Labor

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To enhance the usefulness of data on work readiness outcomes, the Secretary of Labor should provide additional guidance on how to measure work readiness of youth, with a goal of improving the comparability and rigor rigor /rig·or/ (rig´er) [L.] chill; rigidity.

rigor mor´tis  the stiffening of a dead body accompanying depletion of adenosine triphosphate in the muscle fibers.
 of the measure.

Agency Affected: Department of Labor

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

----------

Recommendation: To enhance HUD's ability to prevent, detect, and correct noncompliance with the use of Recovery Act funds, the Secretary of the Department of Housing and Urban Development should expand the criteria for selecting housing agencies for on-site reviews to include housing agencies with open Single Audit findings that may affect the use of and reporting on Recovery Act funds.

Agency Affected: Department of Housing and Urban Development

Status: In process

Comments: When we confirm what actions the agency has taken in response to this recommendation, we will provide updated information.

Categories: Government Operations This article aims to describe the financial expenditure associated with the operations and processes of world governments of all levels. Size of economic footprint

Main articles: Government ownership and Government spending
, Accountability, American Recovery and Reinvestment Act (ARRA), Budget obligations, Budget outlays, Data collection, DOT Federal Highway Program, Federal aid for highways, Federal aid for transportation, Federal aid to localities, Federal aid to states, Federal funds, Federal legislation, Federal/state relations, FTA Transit Capital Assistance program, Funds management, Grants to states, Health care programs, Mass transit mass transit, public transportation systems designed to move large numbers of passengers. Types and Advantages


Mass transit refers to municipal or regional public shared transportation, such as buses, streetcars, and ferries, open to all on a
 funding, Medicaid, Medicaid Federal Medical Assistance Percentage (FMAP), Monitoring, Municipal governments, Public roads or highways, Race to the Top, Recession, Rehabilitation rehabilitation: see physical therapy.  programs, Reporting requirements, State Children\'s Health Insurance Program, State Fiscal Stabilization Fund (SFSF), Weatherization Assistance Program
COPYRIGHT 2009 Stonehenge International
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2009 Gale, Cengage Learning. All rights reserved.

 Reader Opinion

Title:

Comment:



 

Article Details
Printer friendly Cite/link Email Feedback
Publication:General Accounting Office Reports & Testimony
Date:Oct 1, 2009
Words:1765
Previous Article:DCAA Audits: Widespread Problems with Audit Quality Require Significant Reform.
Next Article:Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully...
Topics:


Related Articles
The perils of property tax: many legislatures cut or capped property taxes during the boom years of the 1990s, promising to make up local losses...
Department of Homeland Security: Challenges in Implementing the Improper Payments Information Act and Recovering Improper Payments.
Improper Payments: Status of Agencies' Efforts to Address Improper Payment and Recovery Auditing Requirements.
State and Local Fiscal Challenges: Rising Health Care Costs Drive Long-term and Immediate Pressures.
Update of State and Local Government Fiscal Pressures.
Accountability and transparency in the American Recovery and Reinvestment Act.
Ensuring Accountability In a Time of Financial and Fiscal Stress.
Ensuring Accountability In a Time of Financial and Fiscal Stress.
Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses.
Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully...

Terms of use | Copyright © 2014 Farlex, Inc. | Feedback | For webmasters