Iowa – July 8, 2009

The content below was excerpted from the Iowa Appendix (PDF, 40 pages) of GAO's second bimonthly review of the Recovery Act.[1]

Contents

Use of Funds

Our work in Iowa focused on eight federal programs, selected primarily because they have begun disbursing funds to the state. These include existing programs receiving significant amounts of Recovery Act funds or significant increases in funding. Program funds are being used to help Iowa stabilize its budget and support local governments, particularly school districts, and several are being used to expand existing programs. Funds from some of these programs are intended for disbursement through the state or directly to localities. The funds include the following:

Funds Made Available as a Result of Increased Medicaid Federal Medical Assistance Percentage (FMAP)

As of June 29, 2009, Iowa has received about $136 million in increased FMAP grant awards, of which it has drawn down almost $127 million, or over 93 percent. As a result, Iowa is using funds to offset the state budget deficit, cover the state’s increased Medicaid caseload, and maintain current populations and benefits, and it is planning to use these funds to expand Medicaid eligibility.[2]

Highway Infrastructure Investment Funds

On March 2, 2009, the U.S. Department of Transportation´┐Żs Federal Highway Administration (FHWA) apportioned almost $358 million in Recovery Act funds to Iowa. As of June 25, 2009, $319 million has been obligated for 165 highway projects.

U.S. Department of Education State Fiscal Stabilization Fund (SFSF)

Iowa was allocated about $472 million in SFSF funds, of which $386 million is for education stabilization.  As of June 30, 2009, the Iowa Department of Education had disbursed $40 million of these funds to school districts.  The Iowa Department of Education plans to use these funds to maintain spending for higher education at fiscal year 2009 levels for fiscal year 2010 and for previously approved increases for grades K-12 for fiscal year 2010, with remaining funds to be used in fiscal year 2011.

Title I, Part A, of the Elementary and Secondary Education Act (ESEA) of 1965

As of June 30, 2009, Iowa received about $26 million in Recovery Act ESEA Title I, Part A, funds, or one-half of its estimated $51 million total allocation and had disbursed about $8 million of these funds to school districts. The Iowa Department of Education has provided guidance to school districts regarding uses and reporting of these funds to develop a capacity to serve disadvantaged youth by, for example, providing professional development to teachers.

Individuals with Disabilities Education Act (IDEA), Parts B and C

As of June 30, 2009, Iowa was allocated about $63 million in Recovery Act IDEA, Part B funds, or one-half of its estimated $126 million total allocation and the Iowa Department of Education had disbursed about $25 million of these funds to school districts and area education agencies.  These funds will be used to support special education and related services for children and youth with disabilities. For example, one Iowa area education agency plans to use IDEA, Part B funds to hire speech pathologists and purchase hearing evaluation equipment.

Weatherization Assistance Program

The U.S. Department of Energy (DOE) allocated almost $81 million in Recovery Act weatherization funding to Iowa for 3 years.  In March 2009, DOE provided about $8.1 million to Iowa, and as of June 30, 2009, Iowa’s Department of Human Rights, Division of Community Action Agencies obligated at least $5 million for “ramp up” activities. Iowa plans to weatherize about 7,200 homes by, for example, installing insulation, sealing leaks around doors and windows, and modernizing heating and air equipment.

Edward Byrne Memorial Justice Assistance Grants

The Department of Justice’s Bureau of Justice Assistance (BJA) has awarded about $12 million directly to Iowa in Recovery Act funding. Based on information available as of June 30, 2009, none of these funds have been obligated by the Office of Drug Control Policy, which administers these grants for the state.[3] Iowa’s Office of Drug Control Policy plans to provide grant funds, on a competitive basis, to local and state units of government and nonprofit organizations to address priorities set forth in Iowa’s Drug Control Strategy. The focus will be on creating and preserving jobs in such areas as law enforcement, correctional and substance abuse treatment, and prevention services.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development (HUD) has allocated almost $8 million in Recovery Act funding to 48 public housing agencies in Iowa. Based on information available as of June 20, 2009, approximately $1.6 million (or 22 percent) has been obligated by those agencies. Projects undertaken by local public housing authorities and funded by the Recovery Act involve a variety of tasks, such as reroofing buildings; replacing plumbing and air-conditioning systems; installing new carpet, countertops, and appliances in individual units; and repairing concrete on sidewalks and in parking lots.

Safeguarding & TransparencyBack to top

Iowa will use existing, as well as enhanced, safeguards and controls for Recovery Act programs and is considering ways to show Recovery Act spending by localities. For example, state accounting officials have developed unique accounting codes to track Recovery Act funds and have entered into cooperative agreements with other state agencies to document each agency’s responsibility to review expenditures for compliance with laws and regulations and ensure that expenditures are supported by appropriate documentation. However, a few agencies do not report transactions through the state system. For example, Recovery Act funds that the Iowa Department of Transportation and Board of Regents receive are not itemized at the same level of detail as other state agencies. Furthermore, the centralized accounting system does not include some Recovery Act funds that the Iowa Finance Authority and the Department of Natural Resources receive directly. The Iowa state accounting system does not account for Recovery Act funds that cities, counties, and local governments receive directly. State accounting officials told us they are working with all of these entities to establish procedures for financial oversight.

Other mechanisms in the state to monitor the expenditure of Recovery Act funds include the Office of the State Auditor, which audits state and local entities, and the Governor’s newly created Iowa Accountability and Transparency Board (Iowa Board), which will assess existing practices to prevent fraud, waste, and abuse, as well as oversee real-time audits and reporting and make recommendations to ensure that best practices are implemented. The Iowa Board plans to assess and report on existing state practices to prevent waste, fraud, and abuse of Recovery Act funds by (1) reviewing Single Audit reports for all state agencies, (2) implementing and reviewing risk profile surveys for all agencies, and (3) determining risk levels for individual agencies.

Assessing the Effects of SpendingBack to top

While Iowa state agencies await federal guidance on how to assess the results of Recovery Act spending, most agencies continue to consider various approaches to measure outcomes. Some state agencies collect data that may be used to identify the number of jobs created and saved from the use of Recovery Act funds, such as tracking worker hours for construction contracts. Other agencies have developed their own methodologies to measure results, such as tracking lease rates for vacant units following renovations that use Recovery Act funds. Some agencies said they have the accounting systems in place to measure outcomes. Although they are not required to report through the state, some local agencies also have plans to track results of Recovery Act spending. However, in the absence of specific guidance, most state agency officials continue to question how to accurately calculate and report results based on Recovery Act funds, including how to track outcomes separately from other recovery initiatives. For example, Iowa’s Infrastructure Investment Initiative, or I-JOBS, will provide funding for a variety of infrastructure programs, in addition to funding provided by the Recovery Act.

Full July ReportBack to top

Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses
GAO-09-829
Recovery Act: States' and Localities' Current and Planned Uses of Funds While Facing Fiscal Stresses (Appendixes)
GAO-09-830SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
  • [2] The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services.  The receipt of this increased FMAP may reduce the funds that states would otherwise have to use for their Medicaid programs, and states have reported using these available funds for a variety of purposes.
  • [3] We did not review Edward Byrne Memorial Justice Assistance grants awarded directly to local governments in this report because BJA’s solicitation for local governments closed on June 17, 2009; therefore, not all of these funds have been awarded.
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Lisa Shames

Director, Natural Resources and Environment

shamesl@gao.gov

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