GAO 

United States Government Accountability Office

Report to the Republican Leader

RECOVERY ACT

Project Selection and 

Starts Are Influenced 

by Certain Federal 

Requirements and 

Other Factors 

February 2010 

GAO-10-383 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

February 2010

RECOVERY ACT 

Project Selection and Starts Are Influenced by Certain 

Federal Requirements and Other Factors

Highlights of GAO-10-383, a report to the 

Republican Leader 

The American Recovery and 

Reinvestment Act of 2009 

(Recovery Act) aims to stimulate 

the economy. It provided $787 

billion in spending and tax 

provisions; more than a third of the 

money was slated for projects and 

activities, including construction 

and certain research projects. To 

implement a project using federal 

funds, agencies and funding 

recipients must comply with 

federal laws and regulations. 

GAO was asked to identify key 

federal requirements that apply to 

Recovery Act projects and to 

assess the extent to which (1) 

selected agencies have obligated 

and spent funds for Recovery Act 

projects and (2) federal 

requirements and other factors 

have affected, or are expected to 

affect, project selection and start 

dates. GAO requested data from 27 

agencies that received 

appropriations under the act. We 

also spoke with officials 

responsible for implementing 

Recovery Act projects in 16 states 

and the District of Columbia, which 

together are estimated to receive 

about two-thirds of the 

intergovernmental federal 

assistance available under the act. 

We also spoke with organizations 

representing state and local 

officials and the private sector, as 

well as private sector contractors. 

Although GAO is not making 

recommendations in this report, 

these findings may be helpful in 

considering and designing 

legislation with similar objectives. 

As of December 31, 2009, the 27 federal agencies GAO reviewed had obligated 

a total of $194 billion (63 percent) of the approximately $309 billion that was 

appropriated by the Recovery Act for projects and activities, according to data 

provided by agency officials. By this date, the percentage of funds obligated 

ranged from nearly 100 percent for the National Endowment for the Arts ($50 

million) to 18 percent for the Social Security Administration ($183 million). As 

of that same date, the agencies reported they had spent 20 percent ($61 

billion) of their appropriated funds. However, according to agency officials, 

the amount reported as spent may not accurately reflect the amount of work 

done on a given project because payment for federal projects generally occurs 

after work is completed, and the recipient may not yet have submitted an 

invoice for payment. 

Some federal agency officials reported that certain federal requirements and 

other factors affected their ability to select and start Recovery Act projects. 

These include the following: 

 

• Davis-Bacon requirements. Four federal agencies—the Departments 

of Commerce, Energy, and Housing and Urban Development, and the 

Environmental Protection Agency—told us that Davis-Bacon 

requirements affected the timing of some of their Recovery Act 

projects. For example, the Department of Energy’s Weatherization 

Assistance Program became subject to the Davis-Bacon requirements 

for the first time after having been previously exempt from those 

requirements. Thus, the Department of Labor had to determine the 

prevailing wages for weatherization workers in each county in the 

United States, a task it completed on September 3, 2009. Seven out of 

16 states and the District of Columbia that GAO has been reviewing 

said that they had waited to begin weatherizing homes until the 

Department of Labor had determined county-by-county prevailing 

wage rates for their state. States used only a small percentage of their 

available funds in 2009, mostly because state and local agencies 

needed time to develop the infrastructures required for managing the 

significant increase in weatherization funding and for ensuring 

compliance with Recovery Act requirements, including Davis-Bacon 

requirements. As of December 31, 2009, according to data available to 

the Department of Energy, about 9,100 homes had been weatherized 

out of a planned 593,000. In addition, officials from the Department of 

Housing and Urban Development told us that until passage of the 

Recovery Act, one of its grant programs had never been subject to 

Davis-Bacon requirements. Therefore, agency staff, grantees, and 

contractors needed to establish and implement new administrative 

procedures, which delayed the start of construction projects. Officials 

from 10 states and 3 local agencies said Davis-Bacon requirements had 

similarly caused delays in implementing Recovery Act projects. View GAO-10-383 or key components. 

For more information, contact Patricia A. 

Dalton at (202) 512-3841 or 

daltonp@gao.gov. 

. 
United States Government Accountability Office

Highlights of GAO-10-383 (continued) 

• challenges associated with starting entirely new 

programs, 

• Buy American requirements. Five federal 

agencies—the Departments of Commerce, 

Education, Homeland Security, and Housing and 

Urban Development, as well as the 

Environmental Protection Agency—told us that 

Buy American provisions had affected their 

ability, or their grantees’ ability, to select or start 

some Recovery Act projects. For example, a 

project within Homeland Security’s Electronic 

Baggage Screening Program was slowed as 

officials awaited a Buy American waiver, which 

became necessary when the contractor learned 

that U.S.-made components would have hindered 

the integration of an airport’s security systems. 

At the local level, officials from the Chicago 

Housing Authority (CHA) reported that the only 

security cameras that are compatible with the 

existing CHA system and City of Chicago police 

systems are not made in the United States. CHA 

worked with Housing and Urban Development 

officials to determine how to seek a waiver for 

this particular project. Officials from 2 states and 

1 local entity also said that Buy American 

requirements affected their ability to select and 

start projects. 

• states’ budgeting issues, such as difficulties in 

providing matching funds, 

• higher staff workloads because of the act, 

• seasonal issues or weather, and 

• lack of clarity on the meaning of “shovel-ready.” 

Officials from some federal agencies told us that federal 

requirements did not affect the timing of certain 

projects. These officials cited two main reasons why 

they were able to implement some Recovery Act 

projects quickly. First, in certain cases, federal officials 

said the award processes for Recovery Act projects were 

not substantially different from the processes they 

follow for non-Recovery Act projects. Second, to 

expedite the use of Recovery Act funds, some federal 

officials told GAO that they had either (1) intentionally 

selected projects that had already satisfied key federal 

requirements, such as environmental reviews, or (2) 

modified existing contracts or awarded funding to 

projects that had already undergone peer review during 

an earlier review process. 

• The National Historic Preservation Act. Two 

federal agencies—the Departments of 

Commerce and Transportation—told us that this 

act affected the selection and start of projects. 

For example, Department of Transportation 

officials said that projects to improve the 

security of train stations, bridges, and tunnels 

were delayed because Amtrak had to obtain 

clearances for its projects through the various 

state historic preservation offices before starting 

work. Likewise, 7 states identified this act as a 

factor that did or could impact the timing of their 

Recovery Act projects. For example, officials 

from the Michigan Department of Human 

Services stated that an estimated 90 percent of 

the homes slated for weatherization in their state 

would need a historic preservation review. As of 

late fall 2009, the state historic preservation 

office had only two employees, so state officials 

were concerned that the review process could 

cause significant delays, according to Michigan 

officials. To avoid further delays, Michigan 

officials told us that they have since signed an 

agreement with the state historic preservation 

office, which they believe will expedite the 

review process. 

Federal agency officials also stated that factors other 

than federal requirements affected their ability to quickly 

select or start projects. These include 
Page i GAO-10-383 

Contents 

Letter 1

Background 7 

Agencies Had Obligated a Total of $194 Billion of Division A Funds 

as of December 31, 2009 8 

The Effects of Federal Requirements and Other Factors on Project 

Selection and Starts Varied 13 

Agency Comments and Our Evaluation 26 

Appendix I GAO Contact and Staff Acknowledgments 28 

Tables 

Table 1: Recovery Act Division A Appropriations, Obligations, and 

Spending (Cumulative) by Federal Agencies, as of June 30, 

2009, September 30, 2009, and December 31, 2009 9 

Table 2: Percentage of Recovery Act Division A Appropriations 

Obligated and Spent by Federal Agencies, as of June 30, 

2009, September 30, 2009, and December 31, 2009 11 

Figures 

Figure 1: Factors Federal Officials Most Often Cited as Affecting 

Their Ability to Select or Start Projects 14 

Figure 2: Factors State and Local Government Officials Most Often 

Cited as Affecting Their Ability to Select or Start Projects 15 

 Recovery Act 
Abbreviations 

BTOP Broadband Technology Opportunities Program 

CHA Chicago Housing Authority 

FAR Federal Acquisition Regulation 

NACO National Association of Counties 

NASA National Aeronautics and Space Administration 

NEPA National Environmental Policy Act 

NHPA National Historic Preservation Act 

OMB Office of Management and Budget 

SHPO State Historic Preservation Office 

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Page ii GAO-10-383 Recovery Act
Page 1 GAO-10-383 

 

United States Government Accountability Office

Washington, DC 20548 

 

February 10, 2010 

The Honorable Mitch M. McConnell 

Republican Leader 

United States Senate 

Dear Leader McConnell: 

The American Recovery and Reinvestment Act of 2009 (Recovery Act) is 

intended to promote economic recovery, make investments, and minimize 

or avoid reductions in state and local government services.1

 Enacted on 

February 17, 2009, the act was a response to the economic recession at a 

time when the jobless rate was approaching 8 percent. The Recovery Act 

provided funding for a range of programs and specified that priority 

should be given to certain infrastructure projects that could be completed 

within 3 years. (The Administration referred to projects that can be 

quickly initiated as “shovel-ready.”) In early 2009, the Congressional 

Budget Office projected that the Recovery Act would increase 

employment by between 1.2 million and 3.6 million jobs by the end of 2010 

and estimated that its net cost would total approximately $787 billion from 

2009 through 2019. Of that total, more than one-third comes from Division 

A of the act, which provides substantial funding for, among other things, 

projects and activities.2

When implementing a project using federal funds, agencies and funding 

recipients must typically comply with certain federal laws and regulations 

that are intended to, among other things, ensure fair and open competition 

and financial integrity, and protect the environment. These laws and 

regulations typically include the following: 

1

Pub. L. No. 111-5 (2009). 

2

The Recovery Act consists of two divisions, Division A and Division B. Division A consists 

primarily of discretionary spending, with some exceptions; Division B consists of mainly 

mandatory spending and revenue provisions, with some exceptions, and includes tax, 

unemployment, health, state fiscal relief, and some other provisions. We focused on 

Division A of the Recovery Act. (Discretionary spending refers to outlays from budget 

authority that is provided in and controlled by appropriation acts. Examples of 

discretionary projects and activities include federal construction projects and certain 

research activities. Spending from budget authority that is provided in laws other than 

appropriation acts is referred to as mandatory spending, which includes spending for 

entitlement programs such as Medicare, Food Stamps [now known as the Supplemental 

Nutrition Assistance Program], and veterans’ pensions.) 

 Recovery Act 
 

• The Federal Acquisition Regulation (FAR) establishes uniform policies 

and procedures for executive branch agencies to acquire goods and 

services.3

 Among its many objectives, the FAR strives to facilitate the 

purchase of high-value products and services on a timely basis while 

maintaining the public’s trust in the procurement process and fulfilling 

public policy objectives. Generally, the FAR requires agencies to compete 

contracts by, among other things, publishing a notice on the Federal 

Business Opportunities Web site (a database of federal government 

contracting opportunities), accepting bids from interested parties, 

evaluating proposals, and awarding contracts. In addition, each federal 

agency may institute agency-specific rules to better meet its procurement 

objectives. 

• The National Environmental Policy Act (NEPA) establishes national 

environmental policies and goals to ensure that federal agencies properly 

consider environmental factors before deciding on a project.4

 Under 

NEPA, federal agencies evaluate the potential environmental effects of 

projects they are proposing using an environmental assessment or, if 

projects may significantly affect the environment, a more detailed 

environmental impact statement.5

• The National Historic Preservation Act (NHPA) declares that the federal 

government has a responsibility to expand and accelerate historic 

preservation programs and activities in order to preserve the nation’s 

historical and cultural foundations.6

 The act requires that for all projects 

receiving federal funding or a federal permit, federal agencies must take 

into account the project’s effect on any historic site, building, structure, or 

other object that is or can be listed on the National Historic Register. 

Under the act and its implementing regulations, the agency must consult 

with relevant federal, state, and tribal officials with regard to such a 

project. 

 

3

48 C.F.R. § 1.000 et seq. 

4

42 U.S.C. § 4321 et seq. 

5

Section 1609 of the Recovery Act directs agencies to devote “adequate resources” to 

ensure that applicable environmental reviews under NEPA “are completed on an 

expeditious basis using the shortest existing applicable environmental review process.” 

Section 1609 further requires the President to produce periodic reports on the status and 

progress of NEPA compliance for Recovery Act projects. 

6

16 U.S.C. § 470 et seq. 

Page 2 GAO-10-383 Recovery Act
 

In addition, the Recovery Act outlines several specific statutory 

requirements that agencies and funding recipients must comply with, 

including the following: 

• Davis-Bacon requirements. The Davis-Bacon Act requires that 

contractors and subcontractors pay workers the locally prevailing wages 

on most federally funded construction projects, and it imposes several 

administrative requirements relating to the payment of workers on 

qualifying projects.7

 The Recovery Act applies Davis-Bacon requirements 

to all Recovery Act-funded projects, requiring contractors and 

subcontractors to pay all laborers and mechanics at least the prevailing 

wage rates in the local area where they are employed, as determined by 

the Secretary of Labor. In addition, contractors are required to pay these 

workers weekly and submit weekly certified payroll records, generally to 

the contracting federal agency.8

• Buy American requirements. The Buy American Act generally requires 

that raw materials and manufactured goods acquired for public use be 

made or produced in the United States, subject to limited exceptions.9

Federal agencies may issue waivers for certain projects under specified 

conditions, for example, if using American-made goods is inconsistent 

with the public interest or the cost of those goods is unreasonable. 

Agencies also need not use American-made goods if they are not 

sufficiently available or of satisfactory quality. The Recovery Act has 

similar provisions, including one limiting the “unreasonable cost” 

exception to those instances when inclusion of American-made iron, steel, 

or other manufactured goods would increase the overall project cost by 

more than 25 percent. 

• Recovery Act-specific requirements. Sections 1511 and 1512 of the 

Recovery Act establish additional requirements for the expenditure of 

Recovery Act funds. Section 1511 requires chief executives of state and 

local governments to certify that infrastructure investments have “received 

the full review and vetting required by law and that the chief executive 

accepts responsibility that the infrastructure investment is an appropriate 

use of taxpayer dollars.” Section 1512 requires that recipients of Recovery 

 

7

40 U.S.C. § 3141 et seq. 

8

Separately, we will be reporting on the impact of Davis-Bacon requirements on Recovery 

Act programs subject to those requirements for the first time. 

9

41 U.S.C. § 10a. 

Page 3 GAO-10-383 Recovery Act
 

Act funding report quarterly on a number of measures. Each report is to 

include the amount of funds received and the amount of funds expended 

or obligated to projects or activities. For each project or activity, the 

report must include the project’s name and a description, an evaluation of 

its completion status, and an estimate of the number of jobs created or 

retained by that project or activity. 

Many other federal requirements also apply to projects receiving any 

government funds. For example, as we reported in December 2008, over 70 

requirements may apply to states that accept federal funding for highway 

projects.10 Likewise, states often have their own requirements that apply to 

implementing federally funded projects. 

In this context, you asked us to identify key federal requirements that 

apply to Recovery Act projects and to assess the extent to which (1) 

selected agencies have obligated and spent funds for Recovery Act 

projects and (2) federal requirements and other factors have affected, or 

are expected to affect, the selection and start dates of Recovery Act 

projects. 

To describe the extent to which agencies have obligated and spent 

Recovery Act funds,11 we requested financial data from 27 of the agencies 

that received Division A funding—about one-third of the act’s total—

which was for projects and activities. Although the act provided $787 

billion in spending and tax provisions, we focused on Division A because it 

contains the majority of funding for projects. The remaining amount 

(Division B) comprises additional mandatory spending and revenue 

provisions that generally do not involve funding for specific projects. For 

example, the mandatory spending provisions primarily reflect temporary 

increases in cash transfers in programs such as Medicaid and 

unemployment compensation, while the revenue provisions generally 

reduce the tax liability for individuals, families, and businesses. 

 

10GAO, Federal-Aid Highways: Federal Requirements for Highways May Influence 

Funding Decisions and Create Challenges, but Benefits and Costs Are Not Tracked, 

GAO-09-36 (Washington, D.C.: Dec. 12, 2008). 

11An obligation is a definite commitment that creates a legal liability of the government for 

the payment of goods and services ordered or received. An agency incurs an obligation, for 

example, when it places an order, signs a contract, awards a grant, purchases a service, or 

takes other actions that require the government to make payments to the public or from 

one government account to another. 

Page 4 GAO-10-383 Recovery Act
 

The 27 federal agencies we reviewed consisted of departments and other 

agencies that received funding for almost all projects under the act. 

Specifically, we reviewed the departments of 

• Agriculture, 

• Commerce, 

• Defense, 

• U.S. Army Corps of Engineers,12

• Education, 

• Energy, 

• Health and Human Services, 

• Homeland Security, 

• Housing and Urban Development, 

• the Interior, 

• Justice, 

• Labor, 

• State, 

• Transportation, 

• Treasury, 

• Veterans Affairs, and 

Other agencies: 

• Corporation for National and Community Service, 

• Environmental Protection Agency, 

• Federal Communications Commission, 

• General Services Administration, 

• National Aeronautics and Space Administration, 

• National Endowment for the Arts, 

• National Science Foundation, 

• Small Business Administration, 

• Smithsonian Institution, 

• Social Security Administration, and 

• U.S. Agency for International Development. 

We requested information on the dates on which the Office of 

Management and Budget (OMB) first apportioned money for each of the 

 

12The U.S. Army Corps of Engineers is part of the Army that has both military and civilian 

responsibilities. 

Page 5 GAO-10-383 Recovery Act
 

27 federal agencies in our review.13 We also requested data from the 

agencies on their obligations and expenditures for Recovery Act projects 

for the quarters ending June 30, 2009; September 30, 2009; and December 

31, 2009. We verified the agency-provided data with agency officials and 

checked their appropriations figures with appropriations values in the 

Recovery Act. However, we did not check obligations or spending against 

other sources, with the exception of the Recovery.gov Web site. Our data 

differ from those on that site because of data presentation, coverage, and 

reporting dates. We believe the data we collected are sufficiently reliable 

for the descriptive purposes of this review. To describe the extent to 

which federal requirements have significantly affected, or are expected to 

significantly affect, Recovery Act project selection and start dates, we 

asked the 27 agencies which federal requirements, if any, affected the 

timing of project selection and start dates. We also asked whether any 

requirements at the state and local levels, or any other factors, affected 

project selection and start dates. To supplement the federal agencies’ 

responses, we spoke with officials in 16 states and the District of 

Columbia who are responsible for implementing Recovery Act projects. 

We are reviewing these 16 states and the District of Columbia for our 

bimonthly reports to Congress on Recovery Act implementation.14 These 

16 states are Arizona, California, Colorado, Florida, Georgia, Illinois, Iowa, 

Massachusetts, Michigan, Mississippi, New Jersey, New York, North 

Carolina, Ohio, Pennsylvania, and Texas. To gain an industry perspective 

on the extent to which federal requirements affect the timing of Recovery 

Act projects, we spoke with representatives of three business 

associations—the Associated General Contractors of America, the 

Professional Services Council, and the U.S. Chamber of Commerce—that 

represented firms receiving Recovery Act funds. We also spoke with 

representatives from the National Governors Association; the National 

Association of State Auditors, Comptrollers, and Treasurers; and the 

National Association of Counties. We also spoke with contractors that 

 

13Apportionment is the action the OMB uses to distribute amounts available for obligation. 

An apportionment divides amounts available for obligation by specific time periods 

(usually quarters), activities, projects, objects, or a combination thereof. 

14The states selected for our bimonthly reviews contain about 65 percent of the U.S. 

population and are estimated to receive collectively about two-thirds of the 

intergovernmental federal assistance funds available through the Recovery Act. We 

selected these states and the District of Columbia on the basis of federal outlay projections; 

percentage of the U.S. population represented; unemployment rates and changes; and a 

mix of states’ poverty levels, geographic coverage, and representation of both urban and 

rural areas. 

Page 6 GAO-10-383 Recovery Act
 

received funds for large construction projects from the Department of 

Housing and Urban Development and the Environmental Protection 

Agency. In addition, we spoke with community action agencies that have 

contracts with various states to do weatherization work funded by the 

Department of Energy. We obtained contractor names for Recovery Act 

programs from state and local officials in states that we reviewed as part 

of our bimonthly reporting. We ensured a range of firms were selected by 

asking for contacts from different states (geographically dispersed and 

different in terms of unionization rates) for different Recovery Act 

programs. The examples we provide in this report are illustrative only and 

not generalizable to other federal agencies. 

We conducted this performance audit from September 2009 to February 

2010 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives. 

In responding to the deepest recession since the end of World War II, the 

Recovery Act employs a combination of tax relief and government 

spending. The Recovery Act’s purposes are to preserve and create jobs 

and promote economic recovery; assist those most impacted by the 

recession; provide investments needed to increase economic efficiency by 

spurring technological advances in health and science; invest in 

transportation, environmental protection, and other infrastructure that 

will provide long-term economic benefits; and stabilize the budgets of 

state and local governments.15

Background 

About one-third of the funds provided by the act is for tax relief to 

individuals and businesses; one-third is in the form of temporary increases 

in entitlement programs to aid people directly affected by the recession 

and provide some fiscal relief to states; and one-third falls into the 

category of grants, loans, and contracts, which generally fund projects and 

activities. 

 

15Pub. L. No. 111-5, § 3, 123 Stat. 115 (2009). 

Page 7 GAO-10-383 Recovery Act
 

The 27 agencies that we reviewed reported that they had obligated a total 

of about $194 billion of the approximately $309 billion in Division A 

Recovery Act funds by the end of 2009; $173 billion as of September 30, 

2009; and $106 billion as of June 30, 2009. As of June 30, the percentage of 

funds obligated ranged from a high of 98 percent for the Department of 

Treasury ($98 million) to a low of about 1 percent (about $8.3 million) for 

the National Aeronautics and Space Administration (NASA). By December 

31, the percentage of funds obligated ranged from nearly 100 percent for 

the National Endowment for the Arts ($50 million) to 18 percent for the 

Social Security Administration ($183 million). 

Agencies Had 

Obligated a Total of 

$194 Billion of 

Division A Funds as 

of December 31, 2009 

Regarding expenditures, the agencies reported that, as of June 30, 2009, 

they had spent about 5 percent (about $15 billion) of their appropriated 

Division A Recovery Act funds; about 12 percent ($38 billion) as of 

September 30, 2009; and 20 percent ($61 billion) as of December 31, 2009. 

Although expenditure data provide some indication of when funding was 

spent, officials from several agencies told us that payment for federal 

projects generally occurs after work on a given project is completed. As a 

result, although work may have been substantially completed, the 

expenditure data would not reflect this fact because the recipient would 

not have submitted an invoice for payment. For example, as we reported 

in July 2009, although funding has been obligated for more than 5,000 

Federal Highway Administration projects, it may be months before the 

federal government is billed for completed work.16 Contractors have to 

complete work before receiving payments from the state, which, in turn, 

invoices the cognizant federal agency. 

Agencies generally have until September 30, 2010, to obligate funds 

appropriated by the Recovery Act; some agencies have chosen to obligate 

and spend funds over time to ensure they will have a steady stream of 

funds for program activities. For example, Department of Health and 

Human Services officials noted that some agency projects involved social 

service activities, for which funding is intentionally spent over time. 

Consequently, outlays for such service-based projects may be uneven 

throughout the year, depending on program needs. Table 1 provides data 

on agencies’ Division A obligations and expenditures as of June 30, 

September 30, and December 31, 2009. 

 

16GAO, Recovery Act: States’ and Localities’ Current and Planned Uses of Funds While 

Facing Fiscal Stresses, GAO-09-829 (Washington, D.C.: July 8, 2009). 

Page 8 GAO-10-383 Recovery Act
 

Table 1: Recovery Act Division A Appropriations, Obligations, and Spending (Cumulative) by Federal Agencies, as of June 30, 

2009, September 30, 2009, and December 31, 2009 

Dollars in millions 

Obligations Expenditures 

Department or 

agency 

Appropriated 

funding 6/30/2009a 9/30/2009 12/31/2009 6/30/2009a 9/30/2009 12/31/2009

Agriculture $27,638 $3,380 $6,552 $10,056 $2,426 $4,998 $7,849

Commerce 7,825 604 1,390 1,579 267 570 674

Federal 

Communications 

Commissionb

91 66 72 79 6 54 59

Defense 7,435 1,303 3,259 3,836 20 241 723

Education 98,238 49,993 67,634 69,273 10,123 20,675 30,008

Energy 43,225c6,639 17,427 23,156 144 734 1,781

Health and Human 

Services 22,400 4,979 10,385 14,409 106 1,627 3,410

Homeland Security 2,755 537 1,720 1,403d 19 107 153

Housing and Urban 

Development 13,625 5,489 11,300 11,384 932 1,529 2,483

Interior 2,990 251 833 1,239 6 130 247

Justice 4,002 1,781 3,969 3,968e424 1,160 1,420

Labor 4,806 3,563 3,680 3,814 140 843 1,449

State 564 38 143 331 6 25 50

U.S. Agency for 

International 

Development f

38 5 20 22 0.1 4 7

Transportation 48,120 20,717 29,471 32,856 493 3,656 7,920

Treasury 100 98 99 99 0 98 99

Veterans Affairs 1,401 94 486 588 3 36 86

Corporation for 

National and 

Community Service 201 129 154 166 2 17 48

Environmental 

Protection Agency 7,220 4,449 7,086 7,089 16 274 793

General Services 

Administration 5,857 571 1,694 2,370 6 297 415

National Aeronautics 

and Space 

Administration 1,002 8 394 587 0 37 133

National Endowment 

for the Arts 50 20 50 50 0.4 8 19

Page 9 GAO-10-383 Recovery Act
 

Dollars in millions 

 Obligations Expenditures 

Department or 

agency 

Appropriated 

funding 6/30/2009a

9/30/2009 12/31/2009 6/30/2009a 9/30/2009 12/31/2009

National Science 

Foundation 3,002 672 2,402 2,426 11 27 104

Small Business 

Administration 730 130 323 537 36 117 254

Smithsonian Institution 25 18 21 22 0.5 2 8

Social Security 

Administration 1,002 25 148 183 22 129 179 

U.S. Army Corps of 

Engineers 4,600 551 2,213 2,802 62 327 727

Total $308,942g$106,111 $172,923 $194,327 $15,273 $37,720 $61,101

Source: Agency-provided data. 

Notes: This table represents funding under Division A of the act, which consists primarily of 

discretionary spending, with some exceptions. 

Appropriations totaling $109 million for the Recovery Accountability and Transparency Board and the 

Government Accountability Office were excluded because these funds are used primarily to provide 

oversight. We also excluded the Railroad Retirement Board because these funds are directly paid to 

beneficiaries. 

The numbers in this table may differ from those reported by agencies on the Recovery.gov Web site. 

These differences may be attributed to presentation, coverage, and reporting date. 

Some agencies chose to include certain appropriation, obligation, and outlay information, such as 

funding for inspector general offices and salaries and expenses, while others did not. 

a

Some agencies chose to report data for July 3, which was the Friday after the first quarter reporting 

period, instead of June 30 data. 

b

Transfer from the Department of Commerce. 

c

The Department of Energy was initially appropriated $45.2 billion in the Recovery Act; however, $2 

billion for the Loan Guarantee Program was transferred from Energy's Recovery Act appropriation. As 

a result, Energy’s appropriations under the Recovery Act now total $43.2 billion. In addition, this 

$43.2 billion includes $6.5 billion in borrowing authority. 

d

Department of Homeland Security officials told us that the decline in obligations was a result of 

interagency agreements and a bid protest. For example, the department has obligated $412 million to 

interagency partners, including the General Services Administration and the U.S. Army Corps of 

Engineers. 

e

Department of Justice officials told us that obligations decreased from September to December 

because a few Recovery Act grantees declined their awards, thereby requiring a deobligation of 

funds. 

f

Transfer from the Department of State. 

g

The total obligations are calculated on the basis of $309 billion in appropriations, not $311 billion, as 

sometimes cited by other sources, because (1) $2 billion for the Loan Guarantee Program was 

transferred from Energy's Recovery Act appropriation; (2) we excluded the Recovery Accountability 

and Transparency Board and the Government Accountability Office from the calculations; and (3) 

some agencies chose to exclude certain categories of funding, such as administrative expenses. 

Table 2 shows the percentage of Division A funding that each agency had 

obligated and spent as of June 30, September 30, and December 31, 2009. 

Page 10 GAO-10-383 Recovery Act
 

Table 2: Percentage of Recovery Act Division A Appropriations Obligated and Spent by Federal Agencies, as of June 30, 

2009, September 30, 2009, and December 31, 2009 

Dollars in millions 

Percentage obligated Percentage spent 

Department or agency 

Appropriated 

funding 6/30/2009a 9/30/2009 12/31/2009 6/30/2009a 9/30/2009 12/31/2009

Agriculture $27,638 12 24 36 9 18 28

Commerce 7,825 8 18 20 3 7 9

Federal 

Communications 

Commissionb

91 73 79 87 7 60 66

Defense 7,435 18 44 52 0 3 10

Education 98,238 51 69 71 10 21 31

Energy 43,225c15 40 54 0 2 4

Health and Human 

Services 22,400 22 46 64 0 7 15

Homeland Security 2,755 19 62 51d 1 4 6

Housing and Urban 

Development 13,625 40 83 84 7 11 18

Interior 2,990 8 28 41 0 4 8

Justice 4,002 44 99 99e11 29 35

Labor 4,806 74 77 79 3 18 30

State 564 7 25 59 1 4 9

U.S. Agency for 

International 

Development f

38 14 53 59 0 10 20

Transportation 48,120 43 61 68 1 8 16

Treasury 100 98 99 99 0 98 99

Veterans Affairs 1,401 7 35 42 0 3 6

Corporation for National 

and Community Service 201 64 77 83 1 8 24

Environmental 

Protection Agency 7,220 62 98 98 0 4 11

General Services 

Administration 5,857 10 29 40 0 5 7

National Aeronautics 

and Space 

Administration 1,002 1 39 59 0 4 13

National Endowment for 

the Arts 50 40 100 100 1 16 38

National Science 

Foundation 3,002 22 80 81 0 1 3

Page 11 GAO-10-383 Recovery Act
 

Dollars in millions 

 Percentage obligated Percentage spent 

Department or agency 

Appropriated 

funding 6/30/2009a

9/30/2009 12/31/2009 6/30/2009a 9/30/2009 12/31/2009

Small Business 

Administration 730 18 44 74 5 16 35

Smithsonian Institution 25 70 83 88 2 7 33

Social Security 

Administration 1,002 2 15 18 2 13 18

U.S. Army Corps of 

Engineers 4,600 12 48 61 1 7 16

Total obligated $308,942g34 56 63 5 12 20

Source: GAO analysis of agency-provided data. 

Notes: This table represents funding under Division A of the act, which consists primarily of 

discretionary spending, with some exceptions. 

Appropriations totaling $109 million for the Recovery Accountability and Transparency Board and the 

Government Accountability Office were excluded because these funds are used primarily to provide 

oversight. We also excluded the Railroad Retirement Board because these funds are directly paid to 

beneficiaries. 

The numbers in this table may differ from those reported by agencies on the Recovery.gov Web site. 

These differences may be attributed to presentation, coverage, and reporting date. 

Some agencies chose to include certain appropriation, obligation, and outlay information, such as 

funding for inspector general offices and salaries and expenses, while others did not. 

a

Some agencies chose to report data for July 3, which was the Friday after the first quarter reporting 

period, instead of June 30 data. 

b

Transfer from the Department of Commerce. 

c

The Department of Energy was initially appropriated $45.2 billion in the Recovery Act; however, $2 

billion for the Loan Guarantee Program was transferred from Energy's Recovery Act appropriation. As 

a result, Energy’s appropriations under the Recovery Act now total $43.2 billion. In addition, this 

$43.2 billion includes $6.5 billion in borrowing authority. 

d

Department of Homeland Security officials told us that the decline in obligations was a result of 

interagency agreements and a bid protest. For example, the department has obligated $412 million to 

interagency partners, including the General Services Administration and the U.S. Army Corps of 

Engineers. 

e

Department of Justice officials told us that obligations decreased from September to December 

because a few Recovery Act grantees declined their awards, thereby requiring a deobligation of 

funds. Because the amount is small (about $1 million), the decrease is not reflected in table 2. 

f

Transfer from the Department of State. 

g

The total obligations are calculated on the basis of $309 billion in appropriations, not $311 billion, as 

sometimes cited by other sources, because (1) $2 billion for the Loan Guarantee Program was 

transferred from Energy's Recovery Act appropriation; (2) we excluded the Recovery Accountability 

and Transparency Board and the Government Accountability Office from the calculations; and (3) 

some agencies chose to exclude certain categories of funding, such as administrative expenses. 

Page 12 GAO-10-383 Recovery Act
 

Officials at some of the 27 agencies said federal requirements had affected 

their ability to implement Recovery Act projects. For example, DavisBacon, Buy American, and National Historic Preservation Act 

requirements slowed some project selection and starts. Other factors 

unrelated to federal requirements also affected the timing of some 

projects, according to federal and state officials. On the other hand, 

officials from some agencies and certain programs within other agencies 

said they were able to implement Recovery Act projects quickly for two 

main reasons. First, the award processes for some Recovery Act projects 

were not substantially different from the processes agencies use for nonRecovery Act projects. Second, to expedite the use of Recovery Act funds, 

some federal agencies selected projects that had already satisfied key 

federal requirements, such as NEPA, that need to be met before a federal 

project can start. 

The Effects of Federal 

Requirements and 

Other Factors on 

Project Selection and 

Starts Varied 

Some Agencies Reported 

That Certain Federal 

Requirements Affected the 

Timing of Project Selection 

and Starts 

Officials from some agencies cited certain federal requirements that had 

affected their ability to select or start some Recovery Act projects.17 Figure 

1 shows the factors that federal officials most often cited as affecting their 

ability to select or start projects, and figure 2 shows the factors most often 

cited by state and local officials. 

 

17Most federal agencies and departments covered in this review have multiple programs 

under the Recovery Act. While certain programs within each agency or department may 

have encountered challenges in implementing Recovery Act projects in a timely manner, 

this may not be true for all programs within that particular agency or department. 

Page 13 GAO-10-383 Recovery Act
 

Figure 1: Factors Federal Officials Most Often Cited as Affecting Their Ability to Select or Start Projects 

Agency

Agriculture

Commerce

Defense

Education

Energy

Health and Human Services

Homeland Security

Housing and Urban Development

Interior

Justice

Labor

State

Transportation

Veterans Affairs

Environmental Protection Agency

National Aeronautics and Space Administration

National Endowment for the Arts

Small Business Administration

Social Security Administration

Davis-Bacon requirements

Newness of 

 programs

Project selection 

 process

Buy American 

 requirements

Staff capacity

National Historic 

 Preservation Act

 Recovery Act-

 specific requirements

National 

 Environmental 

 Policy Act 

State, local, or 

 tribal issues

Seasonal issues

 or weather

Federal requirements Other factors

National Science Foundation

Source: Federal agency officials.

Agency stated that this factor caused delays in implementing Recovery Act projects

Agency stated that this factor could cause delays in implementing Recovery Act projects

Notes: The following agencies did not identify any factors as affecting their ability to select or start 

Recovery Act projects and thus are not included in figure 1: Corporation for National and Community 

Service; Federal Communications Commission; General Services Administration; Smithsonian 

Institution; Department of the Treasury; and U.S. Agency for International Development. The U.S. 

Army Corps of Engineers said that efforts to fulfill the purposes and principles of the act were a factor 

in slowing its ability to select projects; this factor is not included in figure 1. 

This figure is not comprehensive; it includes only the most commonly cited factors affecting the timing 

of Recovery Act project selection and starts. Some agencies also listed additional factors. 

Page 14 GAO-10-383 Recovery Act
 

Figure 2: Factors State and Local Government Officials Most Often Cited as Affecting Their Ability to Select or Start Projects 

State

Arizona

California

Colorado

District of Columbia

Florida

Georgia

Illinois

Iowa

Massachusetts

Michigan

Mississippi

New Jersey

New York 

North Carolina

Ohio

Pennsylvania

Texas

Davis-Bacon requirements

Contract issues at the state and local levels

Recovery Act-specific 

 requirements

Buy American 

 requirements

National Historic 

 Preservation Act

National Environmental 

 Policy Act 

Federal guidance delayed or changing

State or local grant 

 planning and application process for Recovery Act funds

Local agencies’ lack of familiarity with federal 

 requirements

State-specific laws

Federal requirements Other factors

Staff capacity

Seasonal issues or 

 weather 

Source: State and local agency officials.

State agency stated that this factor caused delays in implementing Recovery Act projects

State agency stated that this factor could cause delays in implementing Recovery Act projects

Local agency stated that this factor caused delays in implementing Recovery Act projects

Note: This figure is not comprehensive; it includes only the most commonly cited factors affecting the 

timing of Recovery Act project selection and starts. Some state and local agencies also listed 

additional factors. 

As figures 1 and 2 show, federal, state, and local agency officials identified 

several factors affecting their ability to select or start projects. For 

example: 

• Davis-Bacon requirements. Officials in 4 of the 27 federal agencies—the 

Departments of Commerce and Energy and Housing and Urban 

Development, as well as the Environmental Protection Agency—cited 

these requirements as affecting project timing, and officials from another 2 

federal agencies said Davis-Bacon requirements may affect the timing of 

Page 15 GAO-10-383 Recovery Act
 

projects. Similarly, officials from 10 states and 3 local agencies said DavisBacon requirements had caused delays in implementing Recovery Act 

projects. In particular, Energy’s Weatherization Assistance Program 

became subject to the Davis-Bacon requirements for the first time after 

having been previously exempt from those requirements.18 Thus, the 

Department of Labor had to determine the prevailing wages for 

weatherization workers in each county in the United States. In July 2009, 

the departments of Energy and Labor issued a joint memorandum to 

Weatherization Assistance Program grantees authorizing them to begin 

weatherizing homes using Recovery Act funds, provided they pay 

construction workers at least Labor’s wage rates for residential 

construction, or an appropriate alternative category, and compensate 

workers for any differences if Labor establishes a higher local prevailing 

wage rate for weatherization activities. On September 3, 2009, Labor 

completed its determinations; later that month, we reported that DavisBacon requirements were a reason why some states had not started 

weatherizing homes. Specifically, 7 out of 16 states and the District of 

Columbia decided to wait to begin weatherizing homes until Labor had 

determined county-by-county prevailing wage rates for their state. These 

officials explained that they wanted to avoid having to pay back wages to 

weatherization workers who started working before the prevailing wage 

rates were known.19 States used only a small percentage of their available 

funds in 2009, mostly because state and local agencies needed time to 

develop the infrastructures required for managing the significant increase 

in weatherization funding and for ensuring compliance with Recovery Act 

requirements, including Davis-Bacon requirements. According to data 

available to Energy, as of December 31, 2009, about 9,100 homes had been 

weatherized out of a planned 593,000. Moreover, Housing and Urban 

Development officials told us that until passage of the Recovery Act, one 

of its Office of Healthy Homes and Lead Hazard Control grant programs 

had never been subject to Davis-Bacon requirements. Therefore, agency 

staff, grantees, and contractors needed to establish and implement new 

administrative procedures, which delayed the start of construction 

 

18The Recovery Act appropriated $5 billion for the Weatherization Assistance Program, 

which Energy is distributing to each of the states, the District of Columbia, and seven 

territories and Indian tribes. The program seeks to assist low-income families by making 

such long-term energy efficiency improvements to their homes as installing insulation; 

sealing leaks; and modernizing heating equipment, air circulation fans, and air conditioning 

equipment. 

19GAO, 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

(Washington, D.C.: Sept. 23, 2009). 

Page 16 GAO-10-383 Recovery Act
 

projects. In another case, Texas Department of Housing and Community 

Affairs officials told us that Davis-Bacon’s administrative requirements 

affected their ability to start projects in two ways. First, the state had to 

wait until late December 2009 for wage rates for a particular county. 

Second, officials experienced delays of 30 to 45 days to (1) provide 

training to ensure an understanding of the Davis-Bacon Act at the grantee, 

subrecipient, and subcontractor levels, and (2) have sufficient staff to 

collect, monitor, and document that data and check its reliability through 

payment verifications and employee interviews. 

• Buy American provisions. According to officials from 5 of the 27 federal 

agencies—the Departments of Commerce, Education, Homeland Security, 

Housing and Urban Development, as well as the Environmental Protection 

Agency—these provisions had affected their ability, or their grantees’ 

ability, to select or start some Recovery Act projects. Moreover, officials 

from 3 additional federal agencies said Buy American provisions may 

affect their ability to select or start projects. At the state level, 2 states and 

1 local entity said that Buy American provisions had affected the timing of 

Recovery Act projects. In some cases, federal agencies had to develop 

guidance for compliance with Buy American provisions, including issuing 

guidance on waivers to recipients that were unable to comply. For 

example, according to Environmental Protection Agency officials, 

developing Buy American guidance was particularly challenging because 

of the need to establish a waiver process for Recovery Act projects. 

Likewise, Homeland Security officials told us that a project under the 

Transportation Security Administration’s Electronic Baggage Screening 

Program was slowed as officials awaited a Buy American waiver to allow 

contractors to use foreign-made components.20 The waiver became 

necessary when the contractor learned that U.S.-made components would 

have hindered the integration of an airport’s security systems. At the local 

level, officials from the Chicago Housing Authority (CHA) reported that 

the only security cameras that are compatible with the existing CHA 

system and City of Chicago police systems are not made in the United 

States. CHA worked with Housing and Urban Development to determine 

how to seek a waiver for this particular project. Moreover, an industry 

representative told us that the Buy American provisions could interrupt 

 

20The Department of Homeland Security’s Electronic Baggage Screening Program ($700 

million) includes airport facility modification projects, such as the construction of baggage 

handling systems and the purchase and installation of explosives detection equipment. 

Page 17 GAO-10-383 Recovery Act
 

contractors’ supply chains, requiring them to find alternate suppliers and 

sometimes change the design of their projects, which could delay project 

starts. 

• The National Historic Preservation Act. According to officials from 2 of 

the 27 federal agencies—the Departments of Commerce and 

Transportation—NHPA requirements affected some Recovery Act project 

selection and starts, and officials at another 6 federal agencies stated that 

the NHPA may affect the timing of project implementation. Officials from 

7 states identified this act as a factor that did or could impact the timing of 

their Recovery Act projects. At the federal level, Transportation officials 

said that projects to improve the security of train stations, bridges, and 

tunnels have been delayed because Amtrak must obtain clearances for its 

projects through the various state historic preservation offices before 

starting work. Commerce officials also said that some state historic 

preservation officers were slow to issue NHPA clearances because of the 

increased workload stemming from the Recovery Act. At the state level, 

Mississippi officials said the NHPA’s clearance requirements represented 

one of the biggest potential delays to project selection in the energy 

programs. In part because of this requirement, the state had to adjust 

program plans and limit the scope of eligible recipients and projects to 

avoid historic preservation issues. For example, many of the city- and 

county-owned facilities that could benefit from the Energy Efficiency and 

Conservation Block Grant program could be subject to historic 

preservation requirements.21 These program requirements mandate that 

projects must be identified within 180 days of award. 

Likewise, officials from the Michigan Department of Human Services told 

us that the NHPA requires that weatherization projects receiving federal 

funds undergo a state historic preservation review. According to Michigan 

officials, this requirement means that the state historic preservation office 

may review every home over 50 years of age if any work is to be 

conducted, regardless of whether the home is in a historic district or on a 

national registry. State officials told us that an estimated 90 percent of the 

homes to be weatherized would need a historic review. These reviews are 

a departure from Michigan’s previous experience; the state’s historical 

preservation office had never considered weatherization work to trigger a 

 

21The Energy Efficiency and Conservation Block Grants program, administered by Energy, 

provides funds through competitive and formula grants to units of local and state 

government and Indian tribes to develop and implement projects to improve energy 

efficiency and reduce energy use and fossil fuel emissions in their communities. The 

Recovery Act includes $3.2 billion for the program. 

Page 18 GAO-10-383 Recovery Act
 

review. Furthermore, Michigan officials told us that the State Historic 

Preservation Office (SHPO) policy is to review weatherization applications 

for these homes within 30 days after receiving the application and advise 

the state Department of Human Services on whether the work can 

proceed. However, as of October 29, 2009, SHPO had only two employees, 

so state officials were concerned that this process could cause a 

significant delay, according to officials in the state’s Department of Human 

Services. To avoid further delays, Michigan officials told us that in 

November 2009, they signed an agreement with the SHPO that is designed 

to expedite the review process. They also told us that with the agreement 

in place, they expect to meet their weatherization goals. 

• Project selection process. This process—including requesting and 

reviewing applications—was cited as a factor affecting the timing of 

projects by 5 of the 27 federal agencies—the Departments of Commerce, 

Defense, Education, Health and Human Services, and Homeland 

Security—and 2 agencies said it may be a factor. For example, according 

to Commerce officials, before selecting or awarding grants, the 

department’s rules require that each application to the Broadband 

Technology Opportunities Program (BTOP) be reviewed by a panel of at 

least three reviewers.22 The agency within Commerce that oversees BTOP 

received more than 1,800 applications for funding. According to agency 

officials, ensuring that each application was evaluated by three 

independent reviewers resulted in a moderate delay in awarding funds. 

The agency originally anticipated starting to announce BTOP awards in 

November 2009, but it delayed these initial announcements until 

December 2009 to ensure that each application received a thorough review 

and evaluation. Likewise, officials from Homeland Security’s Federal 

Emergency Management Agency said that it needed to carry out very 

rigorous technical reviews of its new Fire Station Construction Grants 

program so that the (1) recommended costs would be appropriate and 

 

22The Department of Commerce’s National Telecommunications and Information 

Administration administers the Recovery Act’s Broadband Technology Opportunities 

Program. This program was appropriated $4.7 billion, including up to $350 million for the 

purposes of developing and maintaining a broadband inventory map. The State Broadband 

Data and Development Grant Program is a competitive, merit-based matching grant 

program that funds projects that collect comprehensive and accurate state-level broadband 

mapping data, develop state-level broadband maps, aid in the development and 

maintenance of a national broadband map, and fund statewide initiatives directed at 

broadband planning. 

Page 19 GAO-10-383 Recovery Act
 

allowable and (2) “shovel-ready” aspect of the grant would be verified.23

Technical review of grant applications, therefore, affected the timing of 

projects funded under this program. 

• Recovery Act-specific requirements. Five of the 27 federal agencies—the 

Departments of Health and Human Services, Justice, and Transportation, 

as well as the Environmental Protection Agency and NASA—stated that 

some Recovery Act requirements, particularly sections 1511 (certification) 

and 1512 (reporting), affected the timing of projects. In addition, 

Education told us that both sections 1511 and 1512 may cause delays. 

Officials from 5 states also said that Recovery Act-specific requirements 

caused delays. At the federal level, Transportation officials told us that the 

section 1511 certification requirement added a step to the process for both 

states and the department, and in a few cases, the certification and posting 

requirement delayed the start of a project. At the state level, officials from 

the Illinois State Board of Education reported that section 1511 delayed 

approval of fiscal year 2010 grant applications that contain construction 

costs. Specifically, because of the need to develop a state-level 

certification process, the approval of construction funding requests was 

delayed, in some cases by several months, for a few districts that 

submitted requests prior to completing a state-level process. Illinois 

officials indicated that an approval process was subsequently put in place; 

as a result, districts usually received approval within days of the request 

submission. Similarly, officials from California stated that section 1511 

certification caused a delay of about 30 days. 

NASA officials told us that contractors sometimes resisted the Recovery 

Act’s section 1512 public reporting requirement. For example, one 

company negotiated with the agency for about 2 months, mainly over the 

effect of the Recovery Act’s reporting requirements on its subcontractors. 

In addition, officials at the Texas Criminal Justice Division told us that the 

state invested more than 1,000 hours to develop and implement technology 

system updates to accommodate the Recovery Act reporting requirements, 

which included redesigning their system to collect data from grantees and 

adding new data elements to the information that they had already 

collected. These system updates, along with the need to send a large 

 

23The Recovery Act Assistance to Firefighters Fire Station Construction Grants program—

appropriated $210 million and is administered by Homeland Security’s Federal Emergency 

Management Agency—provides federal grants directly to fire departments on a competitive 

basis to build or modify existing nonfederal fire stations in order for departments to 

enhance their response capability and protect the communities they serve from fire and 

fire-related hazards. 

Page 20 GAO-10-383 Recovery Act
 

volume of applications back to applicants as new or changing federal 

guidance was released, added an estimated 3 weeks to program 

implementation. 

• National Environmental Policy Act. Officials from 3 federal agencies—

Commerce, Energy, and Housing and Urban Development—stated that 

NEPA had affected project timing; another 8 federal agencies stated that 

NEPA may affect project timing. Officials from 3 states also said that 

NEPA affected project timing. Although Energy officials stated that the 

agency had taken steps to expedite the NEPA review process and the 

agency’s funding opportunity announcements specified that projects must 

be sufficiently developed to meet the Recovery Act’s timetable for 

commitment of funds, officials in California and Mississippi nonetheless 

told us that NEPA had caused delays in Energy programs. For example, 

California officials said that the State Energy Commission must submit 

some of its Recovery Act projects to Energy for NEPA review because 

they are not covered by Energy’s existing categorical exclusions.24 State 

officials said that such reviews can take up to 6 or more weeks. Both 

California and Mississippi officials told us that activities that are 

categorically excluded under NEPA (e.g., road repaving or energy-efficient 

upgrades to existing buildings) still require clearance before the state can 

award funds. Staff must spend time filling out forms and supplying 

information to Energy on projects that may qualify for a categorical 

exclusion. Similarly, Arizona state transportation officials stated that 

NEPA was causing some delays in project selection and starts. In 

particular, Arizona officials explained that delays have occurred at the 

local level because local officials do not have experience in dealing with 

federal highway requirements, including NEPA requirements. 

Recovery Act

Officials also told us that factors other than federal requirements have 

affected the timing of project selection or starts. For example: 

• Newness of programs. Because some Recovery Act programs were newly 

created, officials at several federal agencies told us that before 

implementing projects, they needed time to establish procedures and 

provide guidance. Housing and Urban Development officials, for example, 

Factors Other than Federal 

Requirements Have Also 

Affected the Timing of 

Project Selection and 

Starts 

 

24If an agency determines that activities of a proposed project fall within a category of 

activities the agency has already determined has no significant environmental impact—

called a categorical exclusion—then the agency generally need not prepare an 

environmental assessment or environmental impact statement. 

Page 21 GAO-10-383 
 

told us that because its Office of Native American Programs had not 

previously administered a competitive Native American Housing Block 

Grant,25 they had to develop a new notice of funding availability and new 

forms for the program, which then had to be cleared by both the 

department and OMB.26 The Energy Inspector General noted that the 

awards process for the Energy Efficiency and Conservation Block Grant 

Program, newly funded under the Recovery Act, was challenging to 

implement because there was no existing infrastructure. Hence, Recovery 

Act funds were not awarded and distributed to recipients in a timely 

manner. 

• State, local, or tribal issues. The economic recession affected some states’ 

budgets, which, in turn, affected states’ ability to use some Recovery Act 

funds. For example, an Army National Guard cooperative agreement 

program required states to provide matching funds for such things as 

window and roof replacement at certain facilities. However, because 

states were experiencing difficulties in passing their current-year budgets, 

some were unable to provide the matching funds. As a result, according to 

Defense officials, Defense had to revise its Recovery Act project plan to 

cancel or reduce the number of Army National Guard projects with state 

matching funds and replace them with other projects that did not require 

matching funds. In addition, according to officials at the National 

Endowment for the Arts, one state arts agency had to delay its release of 

Recovery Act grant funds by 3 months, from July to October 2009, because 

of the state’s budgetary constraints. Because the state had not approved its 

budget on time, it authorized agencies to spend funds only in quarterly 

allotments, which were not sufficient to make the recommended grants. 

The state arts agency ultimately received approval of its special request for 

the funds to be released as one allotment. Finally, Housing and Urban 

Development told us that project starts in some instances were affected by 

the need for state and local governments to furlough employees as a result 

of the economic downturn. 

 

25Housing and Urban Development’s Native American Housing Block Grant program ($510 

million) assists tribes in developing, operating, maintaining, and supporting affordable 

housing for rental and homeownership housing. 

26Under the Paperwork Reduction Act, federal agencies may not conduct or sponsor the 

collection of information unless approved by OMB. OMB is required to determine that the 

agency collection of information is necessary for the proper performance of the functions 

of the agency, including whether the information will have practical utility. Consistent with 

the act’s requirements, OMB has established a process to review all proposals by executive 

branch agencies (including independent regulatory agencies) to collect information from 

10 or more persons, whether the collections are voluntary or mandatory. 

Page 22 GAO-10-383 Recovery Act
 

• Staff capacity. Federal officials at some agencies told us they have 

experienced heavy workloads as a result of the Recovery Act, which has 

impaired their ability to initiate programs. For example, officials from the 

Small Business Administration said that they were unable to begin their 

two secondary markets programs until the fall of 2009 because of limited 

staff resources and the need to sort out other issues related to these 

programs, including contracting and Recovery Act recipient reporting 

requirements.27 In addition, as we reported in December 2009, smaller 

localities, which are often rural, told us that they faced challenges because 

of a lack of staff to understand, apply for, and comply with requirements 

for federal Recovery Act grants.28 For example, some local government 

officials reported that they did not employ a staff person to handle grants 

and therefore did not have the capacity to understand which grants they 

were eligible for and how to apply for them. In the District of Columbia, 

moreover, Department of the Environment officials explained that 

weatherization funds had not been spent as quickly as anticipated because 

officials needed to develop the infrastructure to administer the program. 

For example, the department needed to hire six new staff members to 

oversee and manage the program. Officials reported that, as of late 

January 2010, the department had still not hired any of the six new staff 

required. However, the job posting was closed, and Department of the 

Environment officials expected Recovery Act-funded weatherization work 

to begin in early February 2010. Officials from the National Association of 

Counties (NACO), moreover, said that some localities had turned down 

Recovery Act funding to avoid the administrative burdens associated with 

the act’s numerous reporting requirements. 

• Seasonal issues or weather. Officials at some federal agencies said that 

winter and other seasonal concerns impeded their ability to start or 

continue construction projects. For example, according to Interior 

officials, construction starts in Alaska and some northern areas of the 

continental United States may be delayed because of the long winter 

seasons there. In addition, an Interior official stated that seasonal wildland 

fires could also affect the agency’s ability to start certain Recovery Act 

projects. Likewise, Defense officials told us that construction on a pier 

was delayed because the contractor missed the “fish window,” when 

 

27One of the Small Business Administration’s secondary market programs provides loans to 

market broker/dealers to support their continued purchase of the agency’s loan products; 

the other provides financing to acquire fixed assets, such as real estate or equipment, for 

expansion or modernization. 

28GAO, Recovery Act: Status of States’ and Localities’ Use of Funds and Efforts to Ensure 

Accountability, GAO-10-231 (Washington, D.C.: Dec. 10, 2009). 

Page 23 GAO-10-383 Recovery Act
 

construction activities underwater can be performed with minimal impact 

on fish habitat. Finally, contractors in Massachusetts said that inclement 

weather delayed the progress of some paving projects. 

• Lack of clarity on the meaning of “shovel-ready.” Although officials from 

several federal agencies said they made “shovel-ready” projects a priority 

for funding, officials from NACO told us that there was no official 

definition of “shovel-ready.” Hence, local officials had different 

interpretations of the concept. According to NACO officials, localities had 

designated certain projects “shovel-ready,” but the necessary background 

work for these projects had not in fact been completed. 

Some Federal Officials 

Reported That Federal 

Requirements Did Not 

Affect the Timing of 

Recovery Act Projects for 

Two Reasons 

Federal officials from some agencies offered two reasons why federal 

requirements did not affect the timing of certain Recovery Act projects. 

First, officials from these agencies said that the procedures for awarding 

and implementing Recovery Act funds for some programs and projects 

were similar to, or the same as, their usual procedures and did not pose 

any new challenges or cause any particular delays. For example, officials 

from Agriculture’s Farm Direct Operating Loans program used Recovery 

Act dollars to fund an existing backlog of direct operating loan 

applications that had been previously approved but for which no funding 

was available. According to agency officials, the requirements for direct 

operating loans funded through the Recovery Act were thus the same as 

those for direct operating loans funded with regular annual 

appropriations. Therefore, there was no additional burden on applicants. 

These preapproved loans accounted for more than 75 percent of the 

funding made available through the Recovery Act. Within 3 weeks of 

receipt, according to Agriculture officials, nearly 100 percent of the 

Recovery Act direct operating loan funds had been obligated. Likewise, 

General Services Administration officials stated that the agency has been 

operating under the Davis-Bacon requirements within the United States for 

years and has accounted for these requirements in its project plans. 

According to these officials, in cases where Davis-Bacon newly applies to 

Recovery Act projects (i.e., projects in the territories of Puerto Rico and 

the Virgin Islands), the agency’s experience with the requirements has 

facilitated its ability to implement these projects. Hence, according to 

General Services Administration officials, the impact of any federal 

requirements on Recovery Act projects has been negligible. 

Furthermore, in some cases, agencies provided Recovery Act funding 

through major programs that have historically received large sums of 

funding and already had the infrastructure in place to administer the high 

level of funding involved. For instance, a significant amount of 

Page 24 GAO-10-383 Recovery Act
 

Transportation’s Recovery Act funding is being provided to state and local 

transportation authorities through existing program structures, helping to 

ensure that these funds will be used expeditiously. Of the $48 billion that 

Transportation received under the act, nearly $39 billion was distributed 

through existing funding programs, such as highway formula grant 

programs. 

Second, to expedite the use of Recovery Act funds, some federal agencies 

selected—or encouraged states to select—projects that had already 

satisfied key federal requirements that need to be met before a federal 

project can start. For example, agency officials reported the following: 

• Transportation’s Federal Highway Administration encouraged states to 

select projects that had completed preconstruction requirements, 

including NEPA reviews, preconstruction procedures, right-of-way 

acquisition, planning, and administration of engineering- and designrelated services. 

• The National Science Foundation awarded the majority of its funding to 

proposals that had been received by the agency or gone through its merit 

review process prior to September 30, 2009. 

• NASA and the U.S. Agency for International Development mainly 

modified existing contracts, rather than developing new ones, to 

implement projects expeditiously. NASA officials estimated that about 80 

percent of its programs consist of modifications to existing contracts. U.S. 

Agency for International Development officials said they simply included a 

reference to a new FAR clause for the Recovery Act and took the 

appropriate procurement and contracting actions required by the FAR 

before obligating funds. 

Similarly, many state transportation officials said they selected a large 

percentage of resurfacing and other pavement improvement projects for 

Recovery Act funding because such projects did not require extensive 

environmental clearances and because other processes could also occur 

quickly, such as design, request for bids, obligation of funds, and 

employment. In addition, projects could be completed within 3 years.29 For 

example: 

 

29The Recovery Act contains a requirement to give priority to certain transportation 

projects that can be completed within 3 years. 

Page 25 GAO-10-383 Recovery Act
 

• Massachusetts transportation officials said that they had avoided 

significant delays in starting projects by selecting those that were likely to 

have little environmental impact—such as impairing air quality—or that 

require additional permitting before the project could get under way. 

These officials also said that they did not select projects involving entities 

with a history of lengthy permitting processes. For example, if a project 

had permitting requirements that involved the U.S. Army Corps of 

Engineers, the Coast Guard, or a municipality, the state did not generally 

select the project for Recovery Act funding because, according to state 

officials, the permitting process with these entities typically takes a year or 

more to resolve. 

• Mississippi officials told us that prior to the enactment of the Recovery 

Act, the state’s department of Transportation appointed a selection 

committee to identify projects that could be advertised no later than June 

2009. Projects placed on the list to be funded by the Recovery Act were 

required to have all rights-of-way acquired, utilities adjusted, 

environmental clearances obtained, and plans developed. In addition to 

selecting highway construction projects, the committee identified 

transportation enhancement projects that could be obligated before 

February 17, 2010, 1 year after the act’s enactment.30 Such projects 

included improving the department’s rest areas and welcome centers to 

enhance tourism and encourage new industry in the state. All identified 

projects were reviewed and ranked on the basis of (1) need, (2) location in 

an economically distressed area, (3) the likelihood of statewide job 

creation, (4) expected economic benefit to the area, and (5) the projects’ 

ability to meet requirements for timely obligation. When the state was 

notified of its share of Recovery Act funds, officials selected projects from 

this group of reviewed and ranked projects and emphasized obligating 50 

percent of a subset of the funds within 120 days. 

We provided a draft of this report to all 27 agencies and OMB for review 

and comment and received technical comments from 17 agencies. We have 

incorporated these comments into the report as appropriate. We also 

provided a copy of the relevant sections to GAO teams responsible for 

reviewing Recovery Act work in the states mentioned in this report. In 

some cases, those teams forwarded relevant sections to officials within 

those states. We included these comments as appropriate. 

Agency Comments 

and Our Evaluation 

 

30Transportation enhancements include activities such as provision of facilities for 

pedestrians and bicyclists, preservation of abandoned railway corridors, acquisition of 

scenic easements, and historic preservation projects. 

Page 26 GAO-10-383 Recovery Act
 

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to all 27 agencies reviewed in 

this report and other interested parties. The report will also be available at 

no charge on the GAO Web site at http://www.gao.gov. 

If you or your staff members have any questions about this report, please 

contact me at (202) 512-3841 or daltonp@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. GAO staff who made major contributions to this 

report are listed in appendix I. 

Sincerely Yours, 

Patricia A. Dalton

Managing Director, Natural Resources 

 and Environment 

Page 27 GAO-10-383 Recovery Act
Appendix I: 

A

GAO Contact and Staff 

cknowledgments 

Page 28 GAO-10-383 

Appendix I: GAO Contact and Staff 

Acknowledgments 

Patricia A. Dalton, (202) 512-3841 or daltonp@gao.gov

Other key contributors to this report were Mark Gaffigan (Director), Ric 

Cheston (Assistant Director), Kimberly Gianopoulos (Assistant Director), 

Anne K. Johnson (Analyst-in-Charge), and Amanda Krause. Important 

contributions were also made by Jessica Bryant-Bertail, Janice Ceperich, 

Richard P. Johnson, Jonathan Kucskar, Anne Rhodes-Kline, and Carol 

Herrnstadt Shulman. 

 Recovery Act 

GAO Contact 

Staff 

Acknowledgments 

(361132) 
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