Heather MacLeod, Assistant DirectorPhysical Infrastructure Issues

April 15, 2011

American Recovery and Reinvestment

Act and GAO’s Role

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American Recovery & Reinvestment Act

• Signed February 17, 2009

• Purposes:

• preserve and create jobs and promote recovery

• assist those most impacted by the recession

• invest in science and health-care technology

• invest in infrastructure

• stabilize state and local government budgets

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Projected versus Actual Federal Outlays to States and Localities under the Recovery Act

Source: GAO analysis of data from CBO, Recovery.gov and Federal Funds Information for States.

0

20

40

60

80

100

120

2009 2010 2011 2012 2013 2014 2015 2016

Fiscal year

Estimated

Actual (as of Mar. 18, 2011)

Outlays in billions of dollars

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Composition of State and Local Recovery Act Funding:

2009 Actual and 2012 Estimated

Source: GAO analysis of CBO and FFIS data. Data reflect estimated and actual federal outlays for a select set of Recovery Act-funded programs administered by states and localities. The Supplemental Nutrition Assistance Program (Food Stamps) and Unemployment Compensation

payments are not included.

Fiscal Year 2009 Fiscal Year 2012

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GAO’s Role in the American Recovery & Reinvestment Act

GAO responsibilities include:

• conducting bimonthly reviews of selected states and localities

• commenting on estimated recipient reports of the number of jobs created and retained

• reviewing areas such as trade adjustment assistance, new education incentive grants, and efforts to increase small business lending

• studying effects of economic downturns on states and federal assistance to alleviate these effects

• fraud reporting hotline (email fraudnet@gao.gov or call

1-800-424-5454)

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GAO’s Bimonthly Review Reporting Strategy

Reporting strategy for initial bimonthly reviews:

• Longitudinal study of 16 states and the District of Columbia

• Selection represents about two-thirds of U.S. population and two-thirds of the intergovernmental assistance funds provided by the Recovery Act

• Localities sampled within selected states

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GAO’s Monitoring of Selected States

1. Arizona 2. California 3. Colorado 4. Florida 5. Georgia 6. Illinois 7. Iowa 8. Massachusetts 9. Michigan10. Mississippi11. New Jersey12. New York13. North Carolina14. Ohio15. Pennsylvania16. Texas17. Washington, D.C.

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GAO’s Bimonthly Review Reporting Objectives

GAO has assessed:

(1)uses of Recovery Act funds,

(2)approaches taken to ensure accountability for Recovery Act funds, and

(3)efforts to evaluate the impact of the Recovery Act funds

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GAO’s Selection of Key Programs

• GAO selected various programs for review based on size and risk

• Key programs included in GAO audits include:

• Medicaid Federal Medical Assistance Percentage (FMAP)

• State Fiscal Stabilization Fund (SFSF)

• Highway Infrastructure Investment Program

• Weatherization Assistance Program

• Workforce Investment Act (WIA) Youth Program

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GAO’s Efforts in Selected States

• GAO completed seven reports focused on the 16 states and D.C.

• GAO examined numerous federal, state, and local programs that received Recovery Act funds.

• GAO also coordinated roles and planned approaches and timelines with the broader accountability community including state and local government auditors and federal inspectors general.

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GAO’s Current Bimonthly Approach

• GAO is now taking a nationwide approach to looking at Recovery Act programs, including in-depth work in selected states, as appropriate.

• Recent reports include:• Head Start program (December 2010)• Energy Efficiency and Conservation Block Grant program (April

2011)

• Planned reports include:• Transportation Programs (anticipated June 2011)• Clean Water and Drinking Water State Revolving Fund (anticipated

June 2011)• Education programs (anticipated September 2011)

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Recovery Act Challenges for Officials at All Levels of Government

• Expectations for an unprecedented level of transparency and accountability

• Qualified personnel need to implement proper controls and accountability at all levels of government

• Close and ongoing coordination needed among federal, state, and local governments

• Accountability community: special responsibility to ensure collective efforts are well-coordinated

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GAO’s Recovery Act Recommendations

GAO has made over 60 recommendations in a variety of areas including:

• Accountability and Transparency

• Reporting on Impact and Guidance

• Resource Allocation and Capacity

• State and Federal Data Collection and Quality

• Administrative Support and Oversight

• Communication with State and Local Recipients

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GAO’s Recovery Act Single Audit Recommendations

• Recommendations to the Office of Management (OMB)

• To leverage Single Audits as an oversight tool for Recovery Act programs we made seven recommendations to OMB related to guidance, timelines, and other issues.

• All of these recommendations remain open.

• Matters for Congressional Consideration

• Consider amending the Single Audit Act or enact new legislation that provides for more timely internal control reporting, as well as coverage for smaller Recovery Act programs with high risk.

• Consider mechanisms to provide additional resources to support those charged with carrying out the Single Audit Act and related audits.

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GAO on the WebGeneral Web site: http://www.gao.gov/Recovery Act Oversight: http://www.gao.gov/recovery/

ContactChuck Young, Managing Director, Public Affairs, youngc1@gao.gov, (202) 512-4800U.S. Government Accountability Office441 G Street NW, Room 7149, Washington, D.C. 20548

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