Recovery Act: GAO's Efforts to Work with the Accountability Community to Help Ensure Effective and Efficient Oversight
Published: 2009-05-05T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses GAO's efforts to coordinate with the accountability community--the Recovery Accountability and Transparency Board (the Board), the Inspectors General (IGs), and state and local government auditors--to help ensure effective and efficient oversight of American Recovery and Reinvestment Act (Recovery Act) funds. The Recovery Act assigns GAO a range of responsibilities including bimonthly reviews of the use of funds by selected states and localities. Because funding streams will flow from federal agencies to the states and localities, it is important for us to coordinate with the accountability community. Also, on March 19, 2009, GAO testified before this Subcommittee about the more than $21 billion in Recovery Act funds estimated to be spent for research and development (R&D) activities at four federal agencies. This statement discusses (1) GAO's efforts to fulfill its responsibilities under the Recovery Act; (2) GAO's coordination with others in the accountability community; (3) GAO's authorities to assist whistleblowers and elicit public concerns; and (4) updated information on the status of Recovery Act funds for R&D. It is based in part on GAO's first bimonthly Recovery Act report, Recovery Act: As Initial Implementation Unfolds in States and Localities, Continued Attention to Accountability Issues Is Essential (GAO-09-580), and GAO's March 5, 2009 testimony, American Recovery and Reinvestment Act: GAO's Role in Helping to Ensure Accountability and Transparency (GAO-09-453T).
section_title: What GAO Found
paragraphs: GAO is carrying out its responsibilities to review the uses of Recovery Act funds and will also target certain areas for additional review using a risk-based approach. GAO's first bimonthly report examined the steps 16 states, the District of Columbia, and selected localities are taking to use and oversee Recovery Act funds. These states contain about 65 percent of the U.S. population and are estimated to receive about two-thirds of the intergovernmental grant funds available through the Recovery Act. GAO's report made several recommendations to the Office of Management and Budget (OMB) toward improving accountability and transparency requirements; clarifying the Recovery Act funds that can be used to support state efforts to ensure accountability and oversight; and improving communications with Recovery Act funds recipients. Soon after the Recovery Act passed, GAO began to coordinate with the accountability community. By the end of February 2009, GAO conducted initial outreach to IGs, the Board, OMB, and state and local auditors. Now, GAO participates in regular coordination conference calls with representatives of these constituencies to discuss Recovery Act efforts and regularly coordinates with individual IGs. GAO also participates in discussions with state and local organizations to further foster coordination. The work of GAO's 16 state and District of Columbia teams that resulted in the first bimonthly report on the actions of selected states and localities under the Recovery Act also exemplifies the level of coordination we are undertaking with the accountability community. For example, teams working in the states collected documents from and interviewed State Auditors, Controllers, and Treasurers; state IGs; and other key audit community stakeholders to determine how they planned to conduct oversight of Recovery Act funds. Provisions in statute as well as a fraud reporting hotline facilitate GAO's ability to evaluate allegations of waste, fraud, and abuse in the federal government. Under GAO's authorizing statute, subject to certain limited exceptions, all agencies must provide the Comptroller General with access to information about the duties, powers, activities, organization and financial transactions of that agency, including for the purpose of evaluating whistleblower complaints. The Whistleblower Protection Act and the Recovery Act provide additional authority for GAO to assist whistleblowers. GAO also maintains a fraud reporting service, which has recently generated more than 25 allegations of misuse of Recovery and other federal funds. These allegations are currently under review by our forensic audit team. Since GAO first provided this Subcommittee with an estimate of the Recovery Act R&D funds to be spent, agencies have submitted program plans to OMB that include, among other things, programs' objectives, schedules, and the types of financial awards to be used. OMB expects to approve these plans by May 15, 2009. As of April 28, 2009, only the Department of Energy's Office of Science had obligated Recovery Act R&D funds for project expenditures.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our efforts to carry out GAO’s  oversight roles related to the American Recovery and Reinvestment Act of  2009 (Recovery Act). An important part of our work entails coordinating  with the accountability community including the federal Inspectors  General (IGs), the Recovery Accountability and Transparency Board, and  state and local government auditors. I will also provide updated  information on the status of Recovery Act funds to be spent for research  and development (R&D) activities, about which we testified before this  Subcommittee in March 2009.
The Recovery Act delineates an important set of responsibilities for the  accountability community. GAO is required to conduct bimonthly reviews  of the use by selected states and localities of funds made available under  the act; we issued the first of these bimonthly reviews on April 23, 2009.  GAO is also charged with reporting on, among other things, specific areas  including trade adjustment assistance, new education incentive grants,  new health care tax credits, and the effects of national economic  downturns on states—especially in the Medicaid area—over the past  several decades. IGs across government are expected to audit the efforts  of federal agencies’ operations and programs related to the Recovery Act,  both individually within their particular entities and collectively, as many  of them are members of the Recovery Accountability and Transparency  Board (the Board). The Board will help prevent waste, fraud, and abuse by  reviewing contracts and grants to ensure they meet applicable standards,  satisfy applicable competition requirements, and are overseen by  sufficient numbers of trained acquisition and grants personnel. The Board  is charged with reporting to the President, Vice President, and the  Congress any potential problems requiring immediate attention in addition  to reporting quarterly and annually.
As we testified before the Subcommittee on March 19, 2009, the Recovery  Act’s combined spending and tax provisions are estimated to cost $787  billion, including more than $21 billion in additional spending for R&D- related activities at the Department of Energy (DOE), Department of  Commerce, National Science Foundation (NSF), and National Aeronautics  and Space Administration (NASA). These activities include supporting  fundamental research, demonstrating and deploying advanced energy  technologies, purchasing scientific instrumentation and equipment, and  constructing or modernizing research facilities. Our earlier testimony  identified several R&D programs that deserve special attention from  agency managers and IGs based on our prior work. Sustained oversight  attention on these programs will be critical as Recovery Act funds are  spent.
Because funding streams of the Recovery Act—including R&D funding— will flow from different federal agencies to the states, localities and  institutions within them, we have been coordinating with the IGs and the  Board, as well as with state and local auditors. My statement today  discusses (1) GAO’s efforts to fulfill its responsibilities under the Recovery  Act; (2) GAO’s coordination with the Board, IGs, and state and local  government auditors; (3) GAO’s authorities to assist whistleblowers and  elicit concerns from the public; and (4) updated information on Recovery  Act funds to be spent for R&D from our previous testimony.
subsections: section_title: Our Reporting to Date under the Recovery Act
paragraphs: In order to meet our mandate to conduct bimonthly reviews and prepare  reports on selected states’ and localities’ use of funds, we have selected 16  states and the District of Columbia to track over the next few years to  provide an ongoing longitudinal analysis of the use of funds under the  Recovery Act. These states contain about 65 percent of the U.S.  population and are estimated to receive about two-thirds of the  intergovernmental grant funds available through the Recovery Act. In  addition to reporting on the core group of 16 states, we will review the  recipient reports from all 50 states. These recipient reports are to include  information on funds received, the amount of Recovery funds obligated or  expended to projects or activities, the projects or activities for which  funds were obligated or expended, and the number of jobs created or  preserved as a result of Recovery Act funds. The Recovery Act also  included a number of specific mandates on which GAO must take action  between April 2009 and February 2014.
Our first bimonthly report, issued two weeks ago, covers the actions of  selected states and localities under the Recovery Act as of April 20, 2009.  About 90 percent of the $49 billion in Recovery Act funding being provided  to states and localities in fiscal year 2009 will be through health,  transportation, and education programs. (See app. I for federal programs  that are receiving Recovery Act funding and are administered by states  and localities.) Our first report focused particularly on Recovery Act funds  for the three largest programs in these categories—Medicaid Federal  Medical Assistance Percentage grant awards, highway infrastructure  investment, and the Department of Education’s State Fiscal Stabilization  Fund. We reported on the status of states’ activities related to these three  programs. The report contains separate appendixes on each of the 16  states and the District of Columbia that discuss the plans and uses of  funds in these three major programs as well as selected other programs  that are receiving Recovery Act funds. The report also makes several  recommendations to the Office of Management and Budget (OMB)  directed toward improving accountability and transparency requirements;  clarifying the Recovery Act funds that can be used to support state efforts  to ensure accountability and oversight; and improving communications  with Recovery Act funds recipients about when funds become available  for their use and when federal guidance is modified or newly released.  OMB concurred with the overall objectives of our recommendations and  plans to work with us to further accountability for these funds.
In consultation with the Congress in exercising our general statutory  authority to evaluate the results of government programs and activities,  we also will continue to target programs for additional review using a risk- based approach and will incorporate reviews of Recovery Act funding  where practicable when we are examining base programs. There are many  implementation challenges to ensuring adequate accountability and  efficient and effective implementation of the Recovery Act. Experience  tells us that the risk for fraud, waste, and abuse grows when billions of  dollars are going out quickly, eligibility requirements are being established  or changed, new programs are being created, or a mix of these  characteristics. This suggests the need for a risk-based approach to target  for early attention specific programs and funding structures based on  known strengths, vulnerabilities, and weaknesses, such as a track record  of improper payments or contracting problems. Of particular concern to  this Subcommittee will be the extent to which Recovery Act R&D funding  is effectively expended, and we discuss the initial implementation of R&D  funding below.
section_title: GAO’s Coordination with the Accountability Community
paragraphs: Regular and frequent GAO coordination with federal IGs, the Board, and  state and local government auditors is a critical component of our work to  ensure effective and efficient oversight. With several early coordination  meetings, we laid the foundation for this ongoing coordination soon after  the act was passed. First, I reached out to the IG community and, with Ms.  Phyllis Fong, the Chair of the Council of Inspectors General on Integrity  and Efficiency, hosted an internal coordination meeting on February 25,  2009, with Inspectors General or their representatives from 17 agencies. It  was a very productive discussion in which we outlined coordination  approaches going forward. In addition, soon after the President appointed  him as Chair of the Board on February 23, 2009, I talked with Mr. Earl  Devaney, former Inspector General at the Department of the Interior, to  begin to coordinate such efforts as the audit of the U.S. government’s  consolidated financial statements whereby GAO relies on the individual  efforts of the IG’s financial audits of their departments and entities across  the government. I am confident that we will coordinate our respective  efforts well, both with the IG community and with the Board.
We also reached out to the state and local audit community and  participated in initial coordination conference calls. The first call, on  February 26, 2009, included state auditors or their representatives from 46  states and the District of Columbia. The next day, we held a similar  discussion with auditors from many localities across the country. State  and local auditors perform very important oversight functions within their  jurisdictions and have unique knowledge about their governments; we are  continuing to coordinate with them closely as we carry out our  responsibilities.
It is also important for us to coordinate with OMB, especially in regard to  the reporting requirements and other guidance to fund recipients and on  what information is to be collected in order to adequately evaluate how  well the Recovery Act achieves its objectives. We participate in weekly  coordination conference calls with OMB, the Board, IGs, and state and  local auditors. The impetus to schedule these calls was a letter OMB  Director Peter Orszag and I received from the National Association of  State Auditors, Comptrollers, and Treasurers; the National Association of  State Budget Officers; the National Association of State Chief Information  Officers; and the National Association of State Procurement Officials. This  letter expressed their strong interest in coordinating reporting and  compliance aspects of the Recovery Act. During these calls, we provide  updates on our Recovery Act activities, and OMB provides updates on its  actions. One important outcome of these calls thus far has been to call  OMB’s and the Board’s attention to the need to clarify certain reporting  requirements. For example, the Recovery Act requires federal agencies to  make information publicly available on the numbers of jobs created and  retained as a result of Recovery Act funded activities. Our work in the  states yielded information that local level officials needed to define how to  capture these data, and the state and local auditors were able to  corroborate what we had heard. We included a recommendation to OMB  in our first bimonthly report on the Recovery Act actions of selected states  and localities to clarify this requirement, and OMB generally concurred  with this recommendation.
In addition to these regular calls, we are actively participating in  discussions with state and local organizations to further foster  coordination within the accountability community. These organizations  include the National Association of State Auditors, Comptrollers, and  Treasurers; the National Association of State Budget Officers; the National  Association of State Procurement Officials; the National Association of  State Chief Information Officers; the National Governors Association; the  National Conference of State Legislatures; and the National League of  Cities. For example, in March 2009, we participated—along with a state  auditor, local auditor, and inspector general—in a webinar hosted by the  National Association of State Auditors, Comptrollers, and Treasurers for  its members.
As Acting Comptroller General, I also serve as the Chairman of the  National Intergovernmental Audit Forum (NIAF). The NIAF is an  association that has existed for over 3 decades as a means for federal,  state, and local audit executives to discuss issues of common interest and  share best practices. NIAF’s upcoming May meeting will bring together  these executives, including OMB, to update them on the Recovery Act and  provide another opportunity to discuss emerging issues and challenges. In  addition, a number of Intergovernmental Audit Forum meetings have been  scheduled at the regional level that seek to do the same, and this regional  coordination is directly contributing to our work in the states. For  example, GAO’s western regional director recently made a presentation at  the Pacific Northwest Audit Forum regarding GAO’s efforts to coordinate  with state and local officials in conducting Recovery Act oversight. In  conjunction with that forum and at other related forums, she has regularly  participated in meetings, panel discussions, and break-out discussions  with the principals of state and local audit entities to coordinate efforts to  provide oversight of Recovery Act spending.
The work of our 16 state teams that resulted in our first bimonthly report  on the actions of selected states and localities under the Recovery Act also  exemplifies the level of coordination we are undertaking with the  accountability community. During the conduct of our work, we collected  documents from and interviewed State Auditors, Controllers, and  Treasurers; state Inspectors General; and other key audit community  stakeholders to determine how they planned to conduct oversight of  Recovery Act funds. We also coordinated as appropriate with legislative  offices in the states concerning state legislatures’ involvement with  decisions on the use of Recovery Act funds. In addition, we relied on  reporting and data collected from the Federal Audit Clearinghouse, which  operates on behalf of OMB to assist oversight agencies in obtaining audit  information on states, local governments, and non-profit organizations.  Illustrative examples follow:    Our team working in Georgia coordinated closely with that state’s State  Accounting Office, the State Auditor, and Inspector General among others,  to understand their plans for mitigating risks and overseeing Recovery Act  funding. For example, the Inspector General developed a database  specifically to track Recovery Act complaints and a public service  announcement to alert the public of how to report fraud, waste, and abuse.
Our team working in North Carolina coordinated with the State Auditor  regarding that state’s plans to ensure that Recovery Act funds are  segregated from other federal funds coming through traditional funding  streams to help ensure accountability and transparency.
Our team working in New Jersey coordinated with the state’s new  Recovery Accountability Task Force, which will review how state and  local agencies spend Recovery Act funds as well as provide guidance and  best practices on project selection and internal controls. As part of the  Task Force, the state Comptroller has responsibility for coordinating all of  the oversight agencies within the state.
Our team working in California is coordinating with the state’s newly  appointed Recovery Act Inspector General, who is seeking to make sure  that Recovery Act funds are spent as intended and to identify instances of  waste, fraud, and abuse. In addition, the team relied on the work of the  State Auditor, whose most recent single audit identified numerous  material weaknesses associated with programs included in GAO’s review.
section_title: GAO’s Authorities to Assist Whistleblowers and Elicit Public Contributions
paragraphs: Provisions in GAO’s authorizing statute, the Whistleblower Protection Act,  and the Recovery Act as well as a dedicated fraud reporting hotline  facilitate our ability to evaluate allegations of waste, fraud and abuse in  the federal government. Under our authorizing statute, we have authority  to access information needed for the effective and efficient performance  of our reviews and evaluations. Subject to certain limited exceptions, all  agencies must provide the Comptroller General access to information he  requires about the duties, powers, activities, organization, and financial  transactions of that agency, including for the purpose of evaluating  whistleblower complaints.
Moreover, the Recovery Act applies certain federal whistleblower  protections to the employees of recipients of Recovery funds. The  Whistleblower Protection Act prohibits personnel actions taken against  federal employees in reprisal for the disclosure of evidence of a violation  of any law, rule, or regulation, gross mismanagement, a gross waste of  funds, an abuse of authority, or a substantial and specific danger to public  health or safety. Similarly, the Recovery Act prohibits reprisals against  employees of nonfederal recipients of Recovery funds, but its protections  only relate to disclosures regarding the use of Recovery funds. The  Recovery Act provides employees of a nonfederal entity receiving a  contract, grant, or other payment funded in whole or part by Recovery  funds may not be discharged, demoted, or otherwise subject to  discrimination as a reprisal for disclosing to the Board, an IG, the  Comptroller General, the Congress, a state or federal regulatory or law  enforcement agency, the employee’s supervisor, a court or grand jury, or a  federal agency information about mismanagement, waste, danger to public  health or safety, or a violation of law regarding the use of Recovery Act  funds. People who believe they have been subject to reprisal may submit a  complaint to the appropriate inspector general for investigation and seek  redress through the courts. Table 1 outlines the coverage of Whistleblower  Act and Recovery Act provisions.
Section 902 of the Recovery Act gives us additional authority to examine  the relevant records of contractors, subcontractors, or state or local  agencies administering contracts that are awarded with Recovery Act  funds. We may also interview officers and employees of such contractors  or their subcontractors as well as officers or employees of any state or  local agency administering such transactions. This additional authority  could be applied to examining allegations made by whistleblowers.
As part of our normal operations, we maintain a fraud reporting service.  Anyone can report evidence of fraudulent activity to FraudNet through an  automated answering system, a dedicated fax line, a dedicated email  address, a dedicated mailing address, or an online form accessible from  our Web site at www.gao.gov. Information about how to provide evidence  of fraud is available on our web site at http://gao.gov/fraudnet.htm and on  the last page of every GAO report. After the Recovery Act was passed, we  coordinated with the IG community to publicize the use of FraudNet as a  means to solicit public input and gather information on potential instances  of waste, fraud, and abuse in the allocation and spending of Recovery Act  funds. We also issued a press release on March 30, 2009, which was cited  by the national news media in articles about the Recovery Act. Over the  past few months, Fraudnet has received more than 25 allegations related  to the misuse of Recovery Act, Troubled Asset Relief Program, or other  related funds. These allegations are currently under review by GAO’s  Forensic Audits and Special Investigations (FSI) unit, a specialized team  with many years of experience conducting fraud investigations. FSI  coordinates with the IG community as appropriate to ensure that there is  no duplication of investigative efforts across the federal government.  Further, in cases where GAO determines that another agency is better  positioned to perform an investigation, FSI will refer relevant information  to the appropriate agency. Although it is too soon to discuss details of the  allegations we have received or the status of ongoing investigations, we  will continue to work with our partners in the IG community, with the  appropriate law enforcement agencies, and with the Congress, to ensure  that all allegations are reviewed and investigated.
section_title: Updated Information on the Recovery Act’s R&D Funding
paragraphs: On March 19, 2009, we testified before this Subcommittee on our role in  helping to ensure accountability and transparency for Recovery Act  science R&D funding. Our statement identified over $21 billion in related  funding appropriated to DOE; the National Institute of Standards and  Technology (NIST) and the National Oceanographic and Atmospheric  Administration (NOAA) within the Department of Commerce; NSF; and  NASA. As initial implementation of the Recovery Act unfolds, we are  tracking these agencies’ activities to plan for science R&D expenditures.  Table 2 provides information on the status of these agencies R&D-related  Recovery Act funds, as of April 28, 2009. To collect this information, we  worked with agencies’ officials and coordinated with agencies’ IGs. As  implementation of the act progresses, further evaluations will continue to  be coordinated with agencies’ IGs to prevent duplication and minimize any  overlap in our work.
As table 2 shows, the status of agencies’ R&D-related funding varies.  Officials from each agency told us about the controls in place to ensure  that their program plans are approved before funds are either apportioned  by OMB or allotted by their agencies’ CFOs. For example, officials from  each agency told us they are following OMB’s April 3, 2009, guidance for  implementing the Recovery Act. OMB’s guidance requires that agencies’  submit program plans justifying Recovery Act expenditures that include a  program’s objectives, funding, activities, types of financial awards to be  used, schedule, environmental review compliance, performance measures,  description of plans to ensure accountability and transparency, and a plan  for monitoring and evaluation. In addition, this guidance requires that  agencies submit the program plans to OMB for approval by May 1, 2009,  and states that OMB will approve these program plans by May 15, 2009.  Officials from NIST, NOAA, and NSF told us that their agencies’ CFOs will  not allot funds for obligation until the House Appropriations  Subcommittee on Commerce, Justice, and Science has reviewed their  program plans. DOE CFO officials told us that the CFO will allot  apportioned funds after an internal DOE approval process, even if OMB  has not yet approved program plans; however, officials said DOE  programs cannot obligate funds until OMB program plan approval is  complete. As of April 28, 2009, only DOE’s Office of Science had obligated  any funds for R&D project expenditures. These obligations, totaling $342  million will support various construction, facilities disposition, and  general plant projects at national laboratories, as well as procurement and  installation of experimental equipment and instrumentation. (See app. II  for additional details on each agency’s planned uses of funds.)
Related to the efforts of the four federal agencies to obligate the R&D  funds, our April 29, 2009, report discussed our initial observations on  improving grant submission policies that could help minimize disruptions  to the grants application process during the Recovery Act’s peak filing  period. Our report was requested in response to two OMB memoranda to  federal agencies stating that the existing Grants.gov infrastructure would  not be able to handle the influx of applications expected as key Recovery  Act deadlines approached. We found that at least 10 agencies will accept  some or all applications outside of Grants.gov during the Recovery Act’s  peak filing period. For example, NSF and NASA are only accepting  applications through their own existing electronic systems for some  grants. We recommended that the Director of OMB take actions to  increase the likelihood that applicants can successfully apply for grants  during the Recovery Act’s peak application filing period. Specifically, we  recommended that OMB (1) ensure that an announcement discussing  agency alternate submission methods similar to that recently posted on  Grants.gov is posted in a prominent location on Recovery.gov and on all  federal Web sites or in all documents where instructions for applying to  Recovery Act grants are presented and (2) prominently post certain  government policies for all grant applications submitted during the peak  filing period for Recovery Act grants, notifying applicants that, among  other things, if an application was deemed late they are notified of such an  outcome and are provided an opportunity to provide supporting  documentation demonstrating they attempted to submit the application on  time. OMB generally concurred with these recommendations.
In addition to direct expenditures, the Recovery Act also includes tax  provisions that benefit individuals and businesses. The Internal Revenue  Service (IRS) recently published a fact sheet on 12 different tax credits  available under the Recovery Act for various energy efficiency measures  taken by homeowners and businesses as well as for qualified renewable  energy producers. Some of these credits are new, and others are  modifications of existing tax credits previously included in the tax code.  As I testified in March 2009, one particular area that needs additional early  attention is identifying the data to be collected concerning the use and  results of the Recovery Act’s various tax provisions. Accountability and  transparency are perhaps easier to envision for the outlay portions of the  stimulus package because the billions of dollars in tax provisions in the  Recovery Act are considerably different than outlay programs in their  implementation, privacy protections, and oversight. Most tax benefits are  entirely administered by the Internal Revenue Service (IRS), and all  taxpayer information, including the identity of those using the benefits, is  protected by law from disclosure. Further, unlike most outlay programs,  IRS does not know who makes use of the tax benefit until after the fact, if  then. While IRS previously collected information that may have been  sufficient to evaluate the benefits of energy tax credits, IRS has not yet  announced what information it will collect for the credits as revised or  added by the Recovery Act.
In closing, I want to underscore that we welcome the responsibility that  the Congress has placed on us to assist in the oversight, accountability,  and transparency of the Recovery Act. We will continue to coordinate  closely with the rest of the accountability community and honor our  ongoing commitment to promptly address information provided by  whistleblowers. We are committed to completing our Recovery Act work  on the timetable envisioned by the act and will keep the Congress fully  informed as our plans evolve.
Mr. Chairman, Representative Broun, and Members of the Subcommittee  this concludes my statement. I would be pleased to respond to any  questions you may have.
section_title: Contact and Staff Acknowledgments
paragraphs: Contact points for our Office of Congressional Relations and Public Affairs  may be found on the last page of this testimony. For further information  about this testimony, please contact Patricia Dalton, Managing Director,  Natural Resources and Environment (202) 512-3841 or daltonp@gao.gov.  Key contributors to this testimony were Richard Cheston (Assistant  Director), Divya Bali, Allison Bawden, Karen Keegan, Michelle Munn, and  Barbara Timmerman.
section_title: Appendix I: Selected Federal Programs Receiving Recovery Act Funding and Administered by States and Localities
subsections: section_title: Energy Efficiency & Conservation Block Grants
section_title: Appendix II: Updated Recovery Act Funding for R&D-Related Activities
paragraphs: To update information on Recovery Act funding for R&D-related activities,  we met with and interviewed Department of Energy (DOE), National  Institute of Standards and Technology (NIST), National Oceanographic  and Atmospheric Administration (NOAA), National Science Foundation  (NSF), and National Aeronautics and Space Administration (NASA)  officials, and analyzed documentation they provided. We also reviewed  publicly available information provided by the Office of Management and  Budget (OMB), through the recovery.gov Web site, and agencies’ own  recovery Web sites. Finally, we coordinated with each agency’s Inspector  General (IG) to discuss the data we collected. We conducted this work in  accordance with generally accepted government auditing standards.
subsections: section_title: Department of Energy
paragraphs: DOE’s program offices vary in the extent to which they have funds  available to obligate for expenditure. A little more than 40 percent of  DOE’s R&D-related Recovery Act funding has been apportioned by OMB,  and only DOE’s Office of Science has obligated R&D project funds. OMB  has not apportioned any funds to DOE’s Office of Fossil Energy and has  only apportioned minimal funds to its Loan Guarantee Program.
Energy Efficiency and Renewable Energy (EERE). The Recovery Act  appropriated $2.5 billion to EERE for R&D activities related to alternative  and renewable energy sources, such as biomass and geothermal. An  additional $2.4 billion was appropriated for advanced transportation  research focused on next-generation plug-in hybrid electric vehicles, their  advanced battery components, and transportation electrification. OMB has  apportioned all of EERE’s appropriation, and DOE’s Office of the Chief  Financial Officer (CFO) has generally allotted the funds to support the  R&D activities associated with vehicle technologies and electrification.  EERE has issued a solicitation for grants, which closes May 13, 2009, to  establish development, demonstration, evaluation, and education projects  to accelerate the market introduction and penetration of advanced electric  drive vehicles. In addition, EERE has issued a solicitation for grant  proposals supporting the construction of U.S.-based manufacturing plants  to produce batteries and electric drive components, which closes May 19,  2009.
Fossil Energy (FE). The Recovery Act appropriated $3.4 billion to FE for  R&D-related activities, including funds to support a third round of  competition under the Clean Coal Power Initiative; fossil energy R&D  programs, such as fuel and power systems research or FutureGen; and  competitive grants for carbon capture and energy efficiency improvement  projects. As of April 28, 2009, OMB had not apportioned any of these funds  to DOE, and thus no funds have been allotted, obligated, or expended.  According to an FE official, OMB is unlikely to apportion funds to FE until  after May 15, 2009, when its program plans are expected to be approved.
Science. The Recovery Act included a $1.6 billion appropriation for DOE’s  Office of Science (Science). Nearly all $1.6 billion appropriated has been  apportioned by OMB to DOE without restriction, and the Secretary of  Energy has announced priorities for $1.2 billion of these funds, including:    $248 million for major construction, modernization, infrastructure  improvements, and needed decommissioning of facilities at national  laboratories;   $330 million for operations and equipment procurement and installation at  major scientific user facilities;   $277 million for competitive research collaborations on transformational  basic science needed to develop alternative energy sources;   $90 million for core scientific research grants to be awarded to graduate  students, postdocs, and Ph.D. scientists across the nation for applications  of nuclear science and technology, and for alternative isotope production  techniques; and   $215 million to accelerate construction of two experimental facilities.
Science has obligated $342 million to support various approved  construction, infrastructure improvement, and facility decommissioning  projects at national laboratories, as well as procurement and installation  of experimental equipment and instrumentation. Table 3 describes   Science’s Recovery Act projects at its national laboratories, including  those for which funding has already been obligated.
Advanced Research Projects Agency–Energy (ARPA-E). The Congress  authorized the establishment of ARPA-E within DOE in August 2007.  ARPA-E supports transformational energy technology research projects  with the goal of enhancing the nation’s economic and energy security.  ARPA-E received its first appropriation of $400 million in the Recovery  Act, which was soon followed by an additional $15 million in the Omnibus  Appropriations Act, 2009. According to a DOE official, the Secretary of  Energy signed a memorandum formally creating the new office on April  22, 2009, and designated an Acting Deputy Director until a presidential  appointee is confirmed by the Senate. As of April 28, 2009, DOE’s CFO had  allotted $2 million in program direction funds to ARPA-E to hire  employees, set up office space, and support requirements necessary to  implement the provisions of the Recovery Act. In addition, ARPA-E issued  its first competitive solicitation on April 27, 2009, to fund up to $150  million of high-risk, high-potential projects focused on innovative energy  technologies. Project proposals are due June 2, 2009, and awards are  generally expected to range from $2 million to $5 million. According to a  DOE official, ARPA-E anticipates issuing more targeted solicitations  associated with the remaining Recovery Act funds; however, the official  said these solicitations are not likely to be issued until a Senate confirmed  appointee is in place to lead the organization.
Loan Guarantee Program (LGP). The Recovery Act included  appropriations totaling $6 billion to LGP, which could support $60 billion  in new loan guarantees, depending on the credit subsidy rate. LGP officials  told us the program plans that they submitted to OMB on May 1, 2009,  support new loan guarantees for renewable energy systems, electric power  transmission systems, and leading-edge biofuel projects performing at the  pilot or demonstration stage and that the Secretary of Energy determines  are likely to become commercial technologies. In addition, the Secretary  of Energy has announced a number of restructuring initiatives for the  program, which, as we reported in July 2008, faces a number of  challenges. Officials have indicated that 6 of the 11 applicants who  responded to DOE’s August 2006 solicitation for various types of  innovative technology loan guarantees could be eligible for loan  guarantees under Recovery Act terms. We are currently examining the  status of LGP’s efforts to solicit and review loan guarantee applications,  including its efforts to use Recovery Act funds, and its progress in  implementing the recommendations in our July 2008 report.
section_title: Department of Commerce
paragraphs: As of April 28, 2009, OMB had apportioned all $1.41 billion directly  appropriated to NIST and NOAA for Recovery Act R&D-related activities.  According to agency officials, funds have not yet been made available for  obligation pending OMB and Congressional approval of program plans.
NIST. NIST plans to spend the $580 million it was directly appropriated to  support, competitive research grants, fellowships, and procurement of  advanced research and measurement equipment and supplies. These funds  are also planned to support a construction grant program for research  science buildings, construction of new NIST facilities, and the reduction of  the backlog of deferred maintenance for existing NIST facilities. In  addition, NIST will receive $10 million appropriated to DOE under the  Recovery Act for work on the electricity grid and $20 million appropriated  to the Department of Health and Human Services to create and test  standards related to health security. According to one official, NIST is  working with OMB to prepare solicitations and other grant-related  documents, so the agency can quickly issue Recovery Act grant  solicitations once its program plans are approved.
NOAA. The Recovery Act appropriated $830 million to NOAA for  construction and procurement related to R&D-related activities, including  support for research operations and facilities; construction and repair of  facilities, ships and equipment; and research to address gaps in climate  modeling and to establish climate data records for research into the cause,  effects, and ways to mitigate climate change. NOAA has issued a  competitive solicitation for up to $170 million in grants for shovel-ready  projects to restore marine and coastal habitats. Applications were due on  April 6, 2009. A NOAA official told us that NOAA is working with OMB to  draft solicitations and other contract-related documents so the agency can  quickly issue Recovery Act contract solicitations once its program plans  are approved.
The Recovery Act appropriated $3 billion to NSF for R&D-related  activities, including competitive research grants; major research  instrumentation and equipment procurement and facilities construction;  academic research facilities modernization; and education and human  resources. NSF officials believe their Recovery Act funds can be obligated  quickly once program plans are approved because, for example, $2 billion  of the $3 billion will fund proposals that NSF’s independent expert review  panels have already deemed of merit but that NSF was not previously able  to fund. Specifically, NSF officials have stated that these grants will be  awarded by September 30, 2009, and NSF expects its Recovery Act funds  will allow the agency to support an additional 50,000 investigators, post- doctoral fellows, graduate and undergraduate students, and teachers  throughout the nation.
The Recovery Act appropriated $1 billion to NASA for expenditures on  space exploration; earth science and climate research missions; adding  supercomputing capacity; aeronautics activities, including aviation safety  research, environmental impact mitigation, and activities supporting the  Next Generation Air Transportation System; and restoration of facilities at  the Johnson Space Center in Houston, Texas, damaged during Hurricane  Ike in 2008. $50 million to support restoration work at the Johnson Space  Center has been apportioned by OMB, and NASA has begun to issue  requests for proposals for this restoration work. According to a NASA  official, OMB has agreed with NASA on the funding priorities for the  remaining $950 million appropriated, and funds will apportioned once  OMB approves NASA’s program plans.
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