Arizona – December 10, 2009

The content below was excerpted from the Arizona Appendix (PDF, 21 pages) of GAO's fourth bimonthly review of the Recovery Act.[1]

Contents

What We Did

We reviewed three specific program areas—Education, Highway Infrastructure, and Public Housing—funded under the Recovery Act. We selected these program areas primarily because they have received and are in the process of obligating Recovery Act funds. Our work focused on the status of the program area’s funding, how funds are being used, and issues that are specific to each program area. (For descriptions and requirements of the programs we covered see appendix XVIII of GAO-10-232SP.) As part of our review, we surveyed a representative sample of local educational agencies (LEAs) from across the nation, including those in Arizona about their planned uses for Recovery Act funds for the State Fiscal Stabilization Fund (SFSF); Title I, Part A of the Elementary and Secondary Education Act of 1965 (ESEA), as amended; and Part B of the Individuals with Disabilities Education Act (IDEA), as amended. We also visited five LEAs and two community colleges.  For highway infrastructure work, we spoke with the Arizona Department of Transportation (ADOT) and the Arizona Division of the Federal Highway Administration.  We also spoke with representatives of two localities receiving Recovery Act funds.  As part of our review, we revisited five public housing agencies that we reported on earlier in 2009.

To gain an understanding of the state’s experience in meeting Recovery Act reporting requirements, we examined documents prepared by and held discussions with, the Governor’s Office of Economic Recovery and ADOT. Because Arizona is a centralized reporting state, each prime recipient of Recovery Act funds is required to report quarterly on a number of measures, including the use of funds and estimates of the number of jobs created and retained. The first quarterly reports were due and submitted in October 2009.

Our work in Arizona involved monitoring the state’s fiscal situation and, for the first time, visiting two counties to review their use of Recovery Act funds. We chose to visit the counties of Maricopa and Yavapai because they were among the localities that have experienced consequences of the economic downturn. According to county officials, the counties are using the funds to provide critical, timely, and increased services to households hardest hit by the economic downturn.

What We Found

Education

Arizona has received approximately $529 million in Recovery Act funds as of November 13, 2009, for SFSF, ESEA Title I, Part A and IDEA Part B education programs. Arizona used SFSF funds to stabilize the state budget; the state distributed funds to kindergarten through 12th grade (K-12) LEAs by making a regular state aid payment, and the community colleges we visited used the money to restore services and to pay instructional salaries. The LEAs are using the Recovery Act ESEA Title I, Part A funds to hire new staff and offer additional educational programs. They also planned to use the Recovery Act IDEA, Part B funds to hire new staff, to support student needs, and as seed money for new educational initiatives.

Recipient Reporting

Arizona used a centralized reporting system to report data for the state agencies that received Recovery Act funds through the state. Other recipients, such as counties and housing authorities that received Recovery Act funds directly from federal agencies, submitted their first quarterly recipient reports directly to www.federalreporting.gov (FederalReporting.gov). We found that the initial recipient reporting was timely with a few ultimately resolved challenges.

Arizona’s Fiscal Condition

The Recovery Act funds have been used in Arizona in place of, or to match state contributions for, state-funded services such as education. In addition, nonfederal funds freed up as a result of the Recovery Act have been used to cover certain Medicaid costs. However, despite $750 million in Recovery Act funds in fiscal year 2009 and $1.13 billion for fiscal year 2010, Arizona is facing an estimated $2 billion state budget shortfall in this fiscal year, according to Arizona Joint Legislative Budget Committee staff estimates.

Counties’ Use of Recovery Act Funds

Maricopa County reported receiving $55 million and Yavapai County received $1 million in Recovery Act funds directly from federal agencies. The counties are using the funds to expand healthcare and human services in response to demand resulting from the economic downturn and to enhance law enforcement by upgrading communication and security equipment.

Highway Infrastructure Investment

As of October 31, 2009, the U.S. Department of Transportation’s Federal Highway Administration has obligated $293 million of the $522 million of Recovery Act funds apportioned to Arizona. Thirty percent of all apportioned highway funds are required to be suballocated to metropolitan and local areas of the state under the Recovery Act, and of the $157 million in these suballocated funds, only $29 million, or about 18 percent, has been obligated. Nevertheless, local officials from two metropolitan planning organizations we spoke to and ADOT said that they expect Arizona to obligate 100 percent of its apportionment by the March 2010 deadline.

Public Housing

Arizona has 15 public housing agencies that have received about $12 million from the Public Housing Capital Fund. As of November 14, 2009, the agencies used funds to complete several projects that have improved existing public housing sites, such as rehabilitating kitchens, installing new heating and cooling systems, and replacing rooftops. Arizona also received one Capital Fund competitive grant, which the city of Phoenix Housing plans to combine with other funding to renovate 374 housing units.

Full December ReportBack to top

Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
GAO-10-231
Recovery Act: Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
(Appendixes)
GAO-10-232SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
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Eileen R. Larence

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larencee@gao.gov

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