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GAO Submits Report to Congress on Use, Accountability, and Reporting of Stimulus Funds

Oct. 5, 2009—Last week, the U.S. General Accountability Office (GAO) submitted a report to Congress, "Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need To Be Fully Addressed." Of the total $787 billion contained in the American Recovery and Reinvestment Act, the economic stimulus package, about $100 billion was allocated for education and is under the aegis of the U.S. Department of Education.

The Dept. of Education, reportedly, has found that four States—California, Illinois, Michigan, Texas, plus Puerto Rico and the District of Columbia—are "at risk," and have been designated to receive technical assistance from the Department to help them implement use of ARRA funds according to good education, accountability, and reporting practices. The GAO has also made investigative visits to 16 selected states and certain local school districts to see how they are using ARRA or "Recovery" funds to identify the approaches they have taken, "to ensure accountability, for Recovery Act funds," and to review states' plans "to evaluate the impact of Recovery Act funds."

Recommendations for all states include:

1. "clearer accountability for recipient financial data"
2. "program-specific examples of recipient reports, outreach to nonfederal recipients, and further guidance on program performance measures; and"
3. "timely notification of funding provided within a state to key state officials and a master schedule for anticipated new or revised federal agency guidance."

UPDATE: Reports are that some California local school districts have yet to begin to use their ARRA economic stimulus funds for education (SFSF, IDEA Special Education, ESEA Title I, Part A) even though the State has made such funds available to them. Of 10 California districts reported on by GAO auditors, cash balances of economic stimulus education dollars ranged from $4.5 million to around $135 million. The State is now
pilot-testing a program to monitor district ARRA-related cash balances, and is reporting progress.

The California State Department of Education has said that in its pursuit of distributing ARRA funds quickly, to respond to national economic difficulties and the State's budget problems, it may not have recognized that local districts were not yet ready to spend the monies, because they were awaiting related U.S. Department of Education guidance.

Read highlights of the GAO report from Education Legislative Services.

Read an update on the GAO report from Education Legislative Services.

Read the full report.

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