Pennsylvania – May 26, 2010

The content below was excerpted from the Pennsylvania Appendix (PDF, 42 pages) of GAO's most recent bimonthly review of the Recovery Act.[1]

What We Did

Our work in Pennsylvania focused on specific programs funded under the Recovery Act. These programs were selected primarily because they received significant amounts of Recovery Act funds. We reviewed the Weatherization Assistance Program, which in Pennsylvania received a significant increase in its funding through the Recovery Act and was identified by the state Bureau of Audits as a high-risk recipient of Recovery Act funds. In addition, a 2007 state Auditor General audit had identified oversight problems in the program. We reviewed transportation programs that faced a 1-year deadline for the obligation of funds in March 2010. Clean Water and Drinking Water State Revolving Funds programs faced a 1-year deadline for awarding all contracts in February 2010 and have also been identified by the state Bureau of Audits as a high-risk recipient of Recovery Act funds. We began monitoring the Tax Credit Assistance Program (TCAP) and Section 1602 Exchange Program and provide updated information on Public Housing Capital Fund formula grants-a program that faced a 1-year deadline for obligating all funds in March 2010. For education programs we provide updated information on progress in spending for allocated by the U.S. Department of Education (Education) for the State Fiscal Stabilization Fund (SFSF); Title I, Part A of the Elementary and Secondary Education Act of 1965, as amended (ESEA); and Part B of the Individuals with Disabilities Education Act, as amended (IDEA). Pennsylvania began disbursing SFSF funds to local educational agencies in March 2010. We also reviewed two Department of Justice programs-Edward Byrne Memorial Justice Assistance Grants (JAG) and COPS Hiring Recovery Program (CHRP). For most programs, we collected relevant documentation and interviewed program officials to review the status of the program's funding, how funds are being used, and issues specific to each program.

We continued to track the state's fiscal condition and also visited four local governments-the cities of Allentown and Philadelphia as well as the counties of Dauphin and York-to discuss the amount of Recovery Act funds each expects to receive and how those funds will be used. We also contacted state and local auditors about oversight and auditing of Recovery Act spending in Pennsylvania.

What We FoundBack to top

Weatherization assistance program

Pennsylvania received $252.8 million in Recovery Act weatherization funds to be spent by March 31, 2012. As of May 7, 2010, $56.5 million has been spent to weatherize 5,446 homes—about 38 percent of the state's target to weatherize 14,355 homes by September 30, 2010, and about 18 percent of its overall target to weatherize 29,700 homes by March 31, 2012. Pennsylvania has begun to address key weaknesses in its monitoring of weatherization agencies by revising its monitoring procedures and hiring additional monitors. Pennsylvania chose to set a deadline to train and certify all weatherization workers by July 1, 2010, but does not have a process for enforcing the deadline.

Transportation programs

Pennsylvania met the 1-year Recovery Act deadline for obligating highway funds by having the federal government obligate all of its $1.026 billion apportionment. According to the Federal Highway Administration, as of May 3, 2010, Pennsylvania has awarded 329 contracts. Of those, 254 are under construction and 96 contracts are substantially complete, representing $124.1 million. State officials told us that the Recovery Act has provided funding for projects, including construction of transit facilities—such as an intermodal transit center in Butler, Pennsylvania—and repairing structurally deficient bridges, that otherwise would not have been completed at this time. Because of lower-than-expected revenues supporting transportation, Pennsylvania may face challenges in meeting its Recovery Act maintenance-of-effort requirement.

Clean and Drinking Water State Revolving Funds

Pennsylvania used its approximately $220.9 million in Recovery Act funds together with about $272.0 million in base program and other state funds to help pay for 87 Clean Water projects, such as building a new wastewater treatment plant in Mount Carmel, Pennsylvania, and 26 Drinking Water projects, such as replacing aging water mains in Hazleton, Pennsylvania. Combining funding sources allowed Pennsylvania to fund more projects while meeting a February 17, 2010, deadline. However, thas increased the number of subrecipients that must comply with Recovery Act reporting as well as Davis-Bacon and other requirements.

Low-Income Housing Tax Credit Assistance Programs

Pennsylvania received $95.1 million in Tax Credit Assistance Program (TCAP) funds and $229.9 million in Section 1602 Tax Credit Exchange Program funds (Section 1602 Program). As of April 27, 2010, Pennsylvania awarded $81 million in TCAP funds and $209.8 million in Section 1602 funds for 52 projects, including building 96 units for the elderly in Stewartstown, Pennsylvania, and rehabilitating 24 units of family housing in Allentown, Pennsylvania. As of May 5, 2010, Pennsylvania had spent about $19.7 million in TCAP funds and about $77.3 million in Section 1602 Program funds.

Public Housing Capital Fund

The U.S. Department of Housing and Urban Development (HUD) has allocated about $212 million in Recovery Act funding to 82 public housing agencies in Pennsylvania. All met the Recovery Act requirement to obligate their funds within 1 year of the date they were made available. Based on information available as of May 1, 2010, about $83.7 million (39 percent) had been drawn down by 80 agencies.

Education programs

In March 2010, Pennsylvania began to distribute the $655 million in State Fiscal Stabilization Fund (SFSF) funds it awarded to local educational agencies (LEA) and by March 31, 2010, almost all LEA subrecipients received their disbursements for state fiscal year 2009-10. According to the U.S. Department of Education, as of April 16, 2010, Pennsylvania has drawn down $156.5 million of $400.6 million in Recovery Act funds awarded for Title I, Part A of the Elementary and Secondary Education Act of 1965 as amended (ESEA), $151.8 million of $441.7 million in Recovery Act funds awarded for Part B of the Individuals with Disabilities Education Act, as amended (IDEA) and $453.6 million of $1.0 billion awarded of SFSF education stabilization funds. For example, the SFSF funds were used to support salaries and benefits for the School District of the City of York and Kutztown University of Pennsylvania and to make debt payments for the Reading School District.

Justice programs

The Department of Justice (DOJ) provided Pennsylvania with more than $72 million in Recovery Act Edward Byrne Memorial Justice Assistance Grant program (JAG) grants. DOJ awarded $45 million directly to the state, part of which was passed on to localities, and $27 million directly to localities across Pennsylvania. Localities are using JAG funds for a range of public safety purposes, including the purchase of law enforcement equipment and information technology, as well as the hiring of court and victim services personnel. DOJ also awarded about $20.2 million in COPS Hiring Recovery Program funds to 19 Pennsylvania localities, including $10.9 million to Philadelphia to hire 50 officers, $1.7 million to Harrisburg to hire 8 officers, and $7.6 million to 17 other localities to hire 35 officers.

State fiscal condition

Despite receiving over $2.7 billion of Recovery Act funds for budget stabilization for state fiscal year 2009-10 and exhausting its Rainy Day Fund, Pennsylvania has a general fund revenue shortfall of $1.1 billion as of May 1, 2010. The proposed budget for state fiscal year 2010-11 assumes lower revenues and continues to use Recovery Act funds for budget stabilization. The Governor has proposed creating a stimulus transition reserve fund with new tax measures to address future budget deficits when the Recovery Act funds end.

Localities' use of Recovery Act funds

The City of Allentown and York County had been awarded $3.7 million and $11.4 million, respectively. Dauphin County expected to receive $7.5 million. As of March 31, 2010, Philadelphia has received $216 million. These four localities are using Recovery Act funds for onetime projects, such as installing energy efficiency improvements in public facilities and providing temporary rent and utility assistance to prevent homelessness.

Accountability and oversight

Pennsylvania's Accountability Office oversees and reports on Recovery Act activities for state agencies and has issued performance measures tracking Recovery Act spending and projects. The state's Bureau of Audits has evaluated programs receiving Recovery Act funds to determine those at high risk and has initiated selected reviews on high-risk programs, including the state's Recovery Act weatherization program. The state Auditor General's office is auditing select Recovery Act spending, including highway and bridge projects, as part of the ongoing 2009 Single Audit.[2]

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).
  • [2] Single Audits are prepared to meet the requirements of the Single Audit Act, as amended, and provide a source of information on internal control and compliance findings and the underlying causes and risks. The Single Audit Act requires states, local governments, and nonprofit organizations expending $500,000 or more in federal awards in a year to obtain an audit in accordance with the requirements set forth in the act. A Single Audit consists of (1) an audit and opinions on the fair presentation of the financial statements and the Schedule of Expenditures of Federal Awards; (2) gaining an understanding of and testing internal control over financial reporting and the entity's compliance with laws, regulations, and contract or grant provisions that have a direct and material effect on certain federal programs (i.e., the program requirements); and (3) an audit and an opinion on compliance with applicable program requirements for certain federal programs.
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Mark E. Gaffigan

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