Iowa – May 26, 2010

The content below was excerpted from the Iowa Appendix (PDF, 32 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

Our work in Iowa examined four programs receiving Recovery Act funds-the Weatherization Assistance Program and three education programs-as well as state and local efforts to stabilize their budgets, monitor the use of Recovery Act funds, and report the number of jobs paid for by these funds. We selected the weatherization program because it has begun to use significant amounts of Recovery Act funds, and we selected three education programs because these are the largest recipients of Recovery Act funds in Iowa. For descriptions and requirements of the programs we reviewed, see appendix XVIII of GAO-10-605SP.

To review the weatherization program, we visited Iowa's Division of Community Action Agencies (DCAA), within the Department of Human Rights, which is responsible for administering the weatherization program. We also visited three local agencies-the Polk County Public Works Department in Des Moines, Mid-Iowa Community Action (MICA) in Marshalltown, and West Central Community Action in Harlan-to provide a mix of urban and rural agencies that weatherize homes using contractors or in-house staff. According to officials, the Polk County agency, located in a large urban area, uses competitive bidding for weatherization work; MICA, located in a rural area, performs most of its weatherization work using in-house staff; and West Central, also in a rural area, uses contractors but at a predetermined price. As part of this work, we also visited 18 homes that had been or were being weatherized using Recovery Act funds.

To review the use of Recovery Act funds for education, we met with officials from the Iowa Department of Education and reviewed state grant applications, financial records, and monitoring plans.

To review state and local efforts to stabilize their budgets, we analyzed state and local budget information, including state revenue estimates, and met with state and municipal officials. We visited three Iowa localities-Council Bluffs, Des Moines, and Newton-selected to provide a mix of large and small communities and unemployment rates. We selected Council Bluffs because it is the seventh largest city in Iowa and because its unemployment rate is below the state's average-6.2 percent compared with a state average of 7.4 percent; Des Moines because it is the largest city in Iowa and because its unemployment rate is above the state's average-8.4 percent compared with a state average of 7.4 percent; and Newton because its population is smaller in comparison with many other localities throughout the state, and its unemployment rate is above the state's average-9.6 percent compared with a state average of 7.4 percent.

To review state and local efforts to report on the results of Recovery Act funds, we met with state-level officials as well as with officials at four recipients of Recovery Act funds: the Des Moines Independent Community School District, the Heartland Area Education Agency, the Des Moines Municipal Housing Agency, and Iowa State University. We discussed their most recent quarterly reporting of funds spent and jobs funded and reviewed payroll and other documents supporting their methodology for calculating hours worked and determining full-time equivalent (FTE) positions.

What We FoundBack to top

Weatherization Assistance Program

Iowa has significantly increased the number of homes weatherized each month using Recovery Act funds. After the U.S. Department of Labor (DOL) established Davis-Bacon prevailing wage rates for weatherization in Iowa on August 19, 2009, the state began using Recovery Act funds to weatherize homes. As of March 31, 2010, the 18 local agencies implementing the program in Iowa had spent about $14.1 million and completed weatherizing 1,176 homes, which represented about 16 percent of the state's target for Recovery Act funds.

Both the state and local agencies appear to have multi-faceted and comprehensive programs to monitor the weatherization program and use of Recovery Act funds. Specifically, each of the three local agencies we visited used the same program controls that they used under the base U.S. Department of Energy (DOE) weatherization program. While visiting homes and reviewing files, we found that the local agencies authorized all work performed and work generally appeared to meet state guidelines. However, while the three local agencies added staff and contractors in response to the increased workload, we also found that two of them did not have sufficient staff or contractors with the needed skills; as a result, they experienced problems maintaining internal controls, such as not using the same contractor to both assess the need for new equipment and install a replacement.

Education

Between 2009 and 2011, the Iowa Department of Education will receive approximately $666 million through three U.S. Department of Education (Education) programs: (1) Title I, Part A, of the Elementary and Secondary Education Act of 1965, as amended (ESEA); (2) Individuals with Disabilities Education Act, as amended (IDEA); and (3) the State Fiscal Stabilization Fund (SFSF) for education stabilization and government services. As of March 31, 2010, the department had disbursed about $491 million in Recovery Act funds to local school districts and institutions of higher education and for government services. Of this amount, about $332 million had been expended.

We found that the Iowa Department of Education had systems in place to monitor compliance by school districts with federal requirements for education programs and the Recovery Act. To receive SFSF funds, Iowa agreed to make progress toward specific education reforms, such as improving teacher effectiveness. However, according to state education officials, more funding is needed to modify existing reporting systems to provide some of the data for the outcome indicators used to track progress toward these reforms, such as student achievement data to measure teacher performance. Furthermore, state officials expressed concern about other challenges to implementing some of the education reforms, including limitations on disclosing personally identifiable student information to track student performance beyond high school graduation, the confidentiality of individual teacher and principal performance evaluations, and inconsistencies between the Iowa student identification system and the National Student Clearinghouse student tracker system.

State and local government use of Recovery Act funds

As of March 31, 2010, the Iowa General Assembly had approved the state's fiscal year 2011 budget, which included about $323.9 million in Recovery Act funds for programs such as Medicaid and K-12 education. According to senior officials from the Iowa Department of Management, Recovery Act funds have enabled the state to avoid tax increases and to reduce the amount of funds drawn from the state's Cash Reserve Fund. Anticipating the end of Recovery Act funds and other one-time sources of revenue, such as the use of state reserve funds, Iowa's Governor and General Assembly implemented plans for improving the efficiency of state operations and reorganizing state agencies to reduce state expenditures. For example, as of April 15, 2010, over 2,000 eligible state employees had applied for retirement under the state's early retirement plan. Officials at three of the localities we visited-Council Bluffs, Des Moines, and Newton-said that they have used Recovery Act funds for various programs, and that these funds helped to stabilize their budgets. However, officials from two of these localities also said that they had encountered problems in applying for and administering funds from some Recovery Act competitive grants, such as the Energy Efficiency and Conservation Block Grant.

State monitoring and internal controls

Iowa's State Auditor and the Iowa Accountability and Transparency Board continue to monitor controls over Recovery Act funds. While the Office of the State Auditor did not identify any material weaknesses in its fiscal year 2009 single audit report,1 officials said that they identified some problems with internal controls over Recovery Act funds, such as inadequate monitoring of subrecipients. The state provided training on subrecipient monitoring in May 2010. The Iowa Accountability and Transparency Board identified six high-priority programs-such as the Weatherization Assistance Program and SFSF education stabilization funds-that it expects may have some difficulty in fully complying with the accountability and transparency requirements in the Recovery Act. The Board required these programs to submit comprehensive accountability plans describing how they would comply.

State and local recipient reporting

In accordance with the Recovery Act, Iowa has reported to www.recovery.gov on the number of jobs funded by the act. Iowa created a centralized database and used it to calculate jobs based on data provided by state and local agency officials. Iowa has also implemented internal controls to ensure the accuracy of data, such as requiring state and local agency officials to certify that they reviewed and approved the jobs data prior to submission. We noted that the methods used to calculate hours varied at the four local recipients we visited-the Des Moines Independent Community School District, the Heartland Area Education Agency, the Des Moines Municipal Housing Agency, and Iowa State University-raising questions about the consistency of the quarterly reported jobs data.

Full May ReportBack to top

Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
GAO-10-604
Recovery Act: States' and Localities' Uses of Funds and Actions Needed to Address Implementation Challenges and Bolster Accountability
(Appendixes)
GAO-10-605SP
  • [1] Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).
GAO Contact
portrait of of Lisa Shames

Lisa Shames

Director, Natural Resources and Environment

shamesl@gao.gov

(202) 512-2649