**GAO-10-604**                      Published: May 26, 2010. Publicly Released: May 26, 2010.                  

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## Highlights

	This report responds to two ongoing GAO mandates under the American Recovery and Reinvestment Act of 2009 (Recovery Act). It is the latest in a series of reports on the uses of and accountability for Recovery Act funds in 16 selected states, certain localities in those jurisdictions, and the District of Columbia (District). These jurisdictions are estimated to receive about two-thirds of the intergovernmental assistance available through the Recovery Act. This report also responds to GAO's mandate to comment on the jobs estimated in recipient reports. GAO collected and analyzed documents and interviewed state and local officials and other Recovery Act award recipients. GAO also analyzed federal agency guidance and spoke with individual federal officials.

	As of May 7, 2010, approximately $114.8 billion, or 41 percent of the approximately $282 billion of total Recovery Act funds for programs administered by states and localities, had been paid out by the federal government. Most outlays to date have been for health and education and training, but, increasingly, investments in transportation, community development, energy, and the environment will characterize new spending. As of April 16, 2010, the 16 states and the District had drawn down about $14.3 billion (64 percent) of their State Fiscal Stabilization Fund (SFSF) for education stabilization; $3.2 billion (56 percent) SFSF for government services; $1.8 billion (28 percent) for Elementary and Secondary Education Act (ESEA) Title I, Part A; and $2.1 billion (29 percent) for Individuals with Disabilities Education Act (IDEA), Part B. Nationwide, the Federal Highway Administration obligated $26.2 billion for over 12,000 projects, and the Federal Transit Administration obligated $8.7 billion for about 1,000 grants. Highway funds were used primarily for pavement improvement projects, and public transportation funds were used primarily for upgrading transit facilities and improving bus fleets. The Recovery Act provides $5 billion for weatherization funding nationwide. As of March 31, 2010 (the most recent data available), recipients had spent about $659 million to weatherize about 80,000 homes; this represents about 13 percent of the 593,000 homes originally planned for weatherization. As of March 31, 2010, the 16 states and the District have drawn down about $12.7 billion in increased FMAP funds for the first two quarters of fiscal year 2010, representing over 92 percent of the total grant award available for this time period. Housing agencies met the March 17, 2010, deadline to obligate, reject, or return a portion of the $3 billion in formula grants. As of May 1, 2010, agencies had drawn down about $1 billion of these funds for projects such as replacing roofs or windows. HUD is reviewing obligations made just before the deadline to determine if any should be recaptured. HUD plans to redistribute any recaptured or returned funds this summer. As of March 31, 2010, at least $426.6 million (about 34 percent) of funds allotted to states had been drawn down, according to Labor estimates. The Recovery Act appropriated $4 billion for the Environmental Protection Agency's (EPA) Clean Water State Revolving Fund (SRF) and $2 billion for the Drinking Water SRF. Nationwide, these funds are being used to support over 3,000 projects. As of March 16, 2010, the Office of Head Start (OHS) had committed 93 percent of the $1.5 billion in Recovery Act funds designated for expansion. One of the purposes of the Recovery Act is to stabilize state and local government budgets. Recovery Act funds were used by states and localities to fund a range of programs and services and thereby helped to partially address budget gaps. OMB met some objectives in its Single Audit Internal Control Project to encourage earlier reporting of internal control deficiencies and corrective actions, but further efforts are needed.

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## Topics

Government Operations

AccountabilityAppropriated fundsAppropriationsAuditing standardsBudget obligationsBudget outlaysConstruction grantsData collectionDocumentationEconomic assistanceEducational grantsEligibility criteriaEnvironmental protectionFederal aid for highwaysFederal aid for housingFederal aid for transportationFederal aid programsFederal aid to localitiesFederal aid to statesFederal fundsFederal grantsFinancial managementFund auditsFunds managementGovernment grantsGrant administrationGrant monitoringGrants to local governmentsGrants to statesHigher educationHousing programsIntergovernmental relationsInternal controlsInvestmentsLocally administered programsMedicaidMonitoringMunicipal governmentsPerformance measuresPrioritizingProgram evaluationProgram managementPublic housingRehabilitation programsReporting requirementsReports managementRisk assessmentSpending legislationState programsState-administered programsStrategic planningUse of fundsYouth employment programsPolicies and proceduresProgram implementationState and local relationsFederal and state relations

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##### Update on States' and Localities' Uses of Recovery Act Funds

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