Colorado – December 10, 2009
What We Did
Our work in Colorado included reviewing the state’s use of Recovery Act funds and its experience reporting Recovery Act expenditures and results to federal agencies under Office of Management and Budget (OMB) guidance. We continued our review of several programs that we have been reviewing on an ongoing basis, in part because of the large amount of funds designated for these programs. These programs include the State Fiscal Stabilization Fund (SFSF); Individuals with Disabilities Education Act (IDEA), Part B; Elementary and Secondary Education Act (ESEA) of 1965, as amended, Title I, Part A; Highway Infrastructure Investment; Transit Capital Assistance; and the Public Housing Capital Fund. For descriptions and requirements of the programs we covered, see appendix XVIII of GAO-10-232SP.
To understand the state’s experience reporting Recovery Act expenditures and results for the first quarterly report issued by the federal government on October 30, 2009, we examined documents prepared by state officials responsible for centrally gathering and reporting to federal agencies. We discussed these documents, and the experience of reporting, with several state and local agencies, including Colorado’s Departments of Education and Transportation, two transit agencies, and three housing agencies. In particular, we focused on understanding the agencies’ methods for identifying and verifying expenditures and counting jobs created and retained.
Finally, for the first time, we visited local governments to better understand their use of Recovery Act funds. All regions of Colorado are experiencing economic stress. We chose to visit three local governments based on, in part, these localities’ size, location, Recovery Act funding, and unemployment rates. Specifically, we selected the City and County of Denver because it is the state’s largest city and has an unemployment rate above the state’s average, which is now 6.7 percent. We also selected two county governments: Adams County because its unemployment rate is higher than the state’s average and Garfield County because its rate is lower than the state’s average.
What We Found
State Fiscal Stabilization Fund
Since we reported in September 2009, the state has changed its plans for the more than $620 million of education stabilization funds allocated to the state. The state now plans to spend all its SFSF education stabilization funds on higher education and none on K-12 programs. The state plans to submit a revised application to the U.S. Department of Education to waive state spending requirements, called maintenance of effort, for education in fiscal year 2010.
The pace of Colorado’s spending for the IDEA, Part B program and the ESEA Title I, Part A program has slowed since we reported in September 2009. State education officials said that their review of the ESEA Title I, Part A applications and IDEA, Part B applications has taken time and that spending depends on local educational agencies (LEA). The state has reviewed all applications and LEAs have begun seeking reimbursements for expenditures made in fiscal year 2010.
Highway Infrastructure Investment
As of October 31, 2009, the U.S. Department of Transportation (DOT) Federal Highway Administration (FHWA) has obligated $335 million of the $404 million of Recovery Act funds apportioned to Colorado for highway projects. Of the $335 million obligated, FHWA has reimbursed Colorado $61 million. At the same time, FHWA issued guidance requiring Colorado, as well as other states, to recalculate the amount of state funds used to certify that it would maintain state spending at a certain level in accordance with Recovery Act requirements. Colorado has devised a method to recalculate this maintenance-of-effort amount but has not yet made it final.
Transit Capital Assistance
As of November 1, 2009, DOT’s Federal Transit Administration (FTA) apportioned $103 million in Transit Capital Assistance funds to Colorado and urbanized areas located in the state and has obligated nearly all of these funds. Denver’s Regional Transportation District, Fort Collins’s Transfort, and the Colorado Department of Transportation’s (CDOT) rural transit program plan to use their share of transit funds to contract for numerous projects, including purchasing buses.
Public Housing Capital Fund
Colorado has 43 public housing agencies that have been allocated about $17.6 million from the Public Housing Capital Fund. The U.S. Department of Housing and Urban Development (HUD) awarded $7.9 million to the three housing agencies we reviewed and the housing agencies had obligated approximately $1.7 million as of November 14, 2009. Of the three housing agencies we reviewed, one has completed all projects using Recovery Act funds, one has projects underway, and one has yet to carry out any projects.
State and Local Use of Recovery Act Funds
In addition to paying for specific programs such as transportation and education, Recovery Act funds are helping the state stabilize its fiscal year 2010 budget as it deals with declining revenues and two rounds of budget cuts. Local governments are using Recovery Act funds to bolster programs that provide needed services but not to stabilize their budgets, as funds available to local entities cannot be used to pay for local entities’ general operating expenses. Denver reported they received awards totaling $55 million in Recovery Act funds, half of which were competitive grants and the other half of which were formula grants. Adams County reported awards of $9 million and Garfield County reported awards of $347,000.
Colorado officials, for the most part, viewed their experience with the first quarterly Recovery Act recipient report as successful but difficult. The state’s reporting efforts are a good first step. However, officials reported a number of technical problems uploading data to the official federal Web site and federal guidance changes that complicated their reporting experience. Our review of a small selection of reported items found some errors in calculating jobs associated with Recovery Act expenditures, suggesting that further review of the reporting results is needed.
Full December ReportBack to top
- Recovery Act:Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability
- Summary (HTML) Highlights Page (PDF) Full Report (PDF, 168 pages)
- Recovery Act:Status of States' and Localities' Use of Funds and Efforts to Ensure Accountability (Appendixes)
- Summary (HTML) Full Report (PDF, 348 pages) Accessible Text
-  Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
- GAO, Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, While Accountability and Reporting Challenges Need to Be Fully Addressed (Colorado), GAO-09-1017SP (Washington, D.C.: September 23, 2009).
-  The apportioned funds include $18.6 million that was transferred from FHWA to the Federal Transit Administration (FTA) for transit projects in accordance with 23 U.S.C. § 104(k)(1). This leaves $385 million for highway projects in the state. FTA reported that the $18.6 million has been obligated.
-  The state’s fiscal year runs from July to June and localities’ fiscal years run from January to December.
-  Two methods of distributing federal grant funds are by formula and through competition. Congress can direct that funds be apportioned among eligible recipients on the basis of a statutorily defined formula or it can authorize federal agencies to award funding competitively.