Tracking how stimulus is spent won't be easy, GAO finds

McClatchy NewspapersApril 23, 2009 

WASHINGTON — Despite President Barack Obama's pledge that the $787 billion in economic stimulus money will be subject to "unprecedented accountability," many state officials worry that they lack the resources to oversee properly how their share of the money is being spent, a report Thursday from Congress' watchdog agency said.

With states slated to receive about $49 billion in fiscal 2009, the current budget year, mostly for health, transportation and education programs, the Government Accountability Office found that the biggest concern was keeping track of the money. The GAO evaluated 16 states and the District of Columbia.

"Officials in most of the states and the district expressed concerns regarding the lack of (stimulus) funding provided for accountability and oversight," the study found. Because of their own budget shortfalls, the GAO said, "many states reported significant declines in the number of oversight staff — limiting their ability to ensure proper implementation and management of (stimulus) funds."

Obama administration officials have made following the money an important part of the stimulus program.

Vice President Joe Biden, who's responsible for leading the oversight of the stimulus, responded quickly to the GAO report. In a letter to the Senate Homeland Security and Governmental Affairs Committee, which was to hold a hearing on the report Thursday, Biden pledged "solution development."

That didn't calm many lawmakers. Chairman Joseph Lieberman, I-Conn., said "implementation challenges exist," while House Republican leader John Boehner of Ohio found that the report confirmed his long-standing fear.

"This report makes clear what Republicans have been warning about for months," Boehner said. "Many states do not have the ability to ensure that stimulus dollars are spent wisely."

Sen. Claire McCaskill, D-Mo., put the problem in earthier terms, using the government's weatherization program as an example.

"There will be scandalous stories across the country with the weatherization program," she said. "We are going to give (it) so much money and it will be contracted out. Who are they hiring? Who's checking to see there are internal controls?"

In its report, the GAO found that officials in nine of the states were worried about how they'd track jobs created by the stimulus.

The report also gave a detailed look at spending. About two-thirds of this year's state aid will go to health programs, since medical needs tend to be more immediate, while transportation will consume a bigger chunk of funding in years to come as highway and rail projects near completion.

The states studied have used about 47 percent of their health-care funding so far this year, but usage varied widely. Colorado had used none of its money, while New Jersey had used two-thirds. Florida had used 59 percent, and North Carolina had used 63 percent.

Most of the stimulus money, the GAO found, was used to help "populations that are sensitive to economic downturns, including children and families, and to offset their state general fund deficits, thereby avoiding layoffs and other measures detrimental to economic recovery." Those people are helped through Medicaid, the joint federal-state program that serves lower-income people, some elderly and those with disabilities.

Republicans complained that the GAO findings showed, as Senate Republican Conference Chairman Lamar Alexander of Tennessee put it, "the so-called stimulus . . . was permanent spending on social services that will never come out of the federal budget."

Many of the states have set up mechanisms to monitor spending, and some have named "recovery czars."

There are potential problems, however. In Colorado, for instance, the GAO found that the state health-care policy and financing agency has had three different controllers in four years and the field audit staff has been cut in half.

In New Jersey, the GAO found, "no additional staff will be hired to help" deal with new highway projects.

In Arizona, "state officials expressed some concerns about the ability of rural, tribal and some private entities such as boards, commissions and nonprofit organizations to manage, especially if the Recovery Act does not provide administrative funding."

Even if they're trying, states are confused about what to track.

"Officials from several of the states we met with expressed a need for clearer definitions of 'jobs retained' and 'jobs created,' " the GAO said.

"Officials from a few states expressed the need for clarification on how to track indirect jobs, while others expressed concern about how to measure the impact of funding that is not designed to create jobs."

ON THE WEB

Obama administration economic stimulus site

Government Accountability Office

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