Texas – July 8, 2009

The content below was excerpted from the Texas Appendix (PDF, 50 pages) of GAO's second bimonthly review of the Recovery Act.[1]

Contents

Use of Funds

GAO’s work focused on Recovery Act spending in Texas for nine federal programs, selected primarily because they have begun disbursing funds to states; they are existing programs receiving significant amounts of Recovery Act funds; or are new programs. As of June 30, 2009, Texas has committed (obligated) a significant portion of its allocated funds to specific projects and uses.

Funds from the Recovery Act will likely provide significant funding for key Texas programs, including the following:

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

As of June 29, 2009, Texas had drawn down over $1.3 billion in increased FMAP grant awards, which is about 94 percent of its awards to date.[2] While Texas’s overall state budget does not have a deficit, funds made available as a result of the increased FMAP funds have helped maintain current populations and benefits in the face of Medicaid budget shortfalls.[3]

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

The U.S. Department of Education allocated to Texas about $3.9 billion from the initial release of SFSF funds. On July 1, 2009, the Governor plans to submit an application for the state’s initial SFSF allocation of $2.7 billion. In anticipation of receiving the funds, the state of Texas has been encouraging local education agencies to plan to use the funds for activities such as modernizing school facilities.

Highway Infrastructure Investment Funds

In March 2009, $2.25 billion was apportioned for highway infrastructure and other eligible projects, and as of June 25, 2009, over $1.16 billion had been obligated. Texas is beginning to undertake Recovery Act funded projects. As of June 25, 2009, funding apportioned by the Federal Highway Administration was obligated for 205 Texas projects. For example, one project, in Uvalde County (64 miles west of San Antonio), will involve an 11.4-mile section of road, located in an economically distressed area. State officials told us this project would not have been selected for 4 to 10 years without Recovery Act funds.

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

The Department of Education allocated the first half of Texas’s ESEA, Title I, Part A allocation on April 1, 2009, totaling about $474 million. As of June 23, 2009, the Texas Education Agency (TEA) had awarded $56 million to local education agencies. These funds must be used for activities allowed under the regular ESEA Title I Part A funds. For example, Houston school district officials said they planned to use these funds to improve educational programs pertaining to early childhood development and to promote achievement for students between the ages of 3 and 5.

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

The total Texas allocation amount for Individuals with Disabilities Education Act, Part B will total about $485 million. As of June 30, 2009, TEA had received 187 applications and issued 42 grant awards totaling about $52.4 million. Houston school district officials told us they plan to use these funds primarily to purchase educational technologies, which will allow for a more inclusive learning environment for students with disabilities.

Weatherization Assistance Program

The U.S. Department of Energy (DOE) allocated about $327 million in Recovery Act weatherization funds to Texas for a 3-year period. Based on information available on June 30, 2009, DOE has provided $32.7 million to Texas; however, these funds are not yet obligated. Texas plans to obligate these funds in August 2009 for weatherizing low-income families’ homes and state and federal public housing and for developing an energy-related training center.

Workforce Investment Act Youth Program

Recovery Act funds allotted for the youth program in Texas totaled about $82 million. After receiving Recovery Act funds and reserving 15 percent for statewide and administrative activities, Texas allocated the remaining funds to local entities. State orkforce officials told us that 60 percent of the allocated funds will be spent on summer employment activities for more than 14,000 youth. As of June 19, 2009, the two local Workforce Development Boards we visited targeted 5,652 youths and found employment for 970 youths.

Edward Byrne Memorial Justice Assistance Grants

The Department of Justice’s Bureau of Justice Assistance has awarded about $90.3 million directly to Texas in Recovery Act funds. [4] Based on information available as of June 25, 2009, Texas had obligated about $4.6 million of these funds for administrative purposes. Officials with the Texas Governor’s Criminal Justice Division told us they would not make any awards until July 1, 2009, because they are reviewing more than 340 applications from potential grant subrecipients. The Criminal Justice Division plans to use grant funds to reduce violent crime and its effect on communities. They also plan to supplement current public safety programs and retain jobs. Officials of the Governor’s office added that the Bureau of Justice Assistance is expected to provide approximately $57.2 million directly to Texas localities.

Public Housing Capital Fund

Public housing authorities in Texas have been allocated $119.7 million in Recovery Act funds by the U.S. Department of Housing and Urban Development. This money, which flows directly to public housing authorities, is being used for various capital improvements, including modifying bathrooms, replacing windows, and adding sewage drains. For example, the San Antonio Housing Authority has a public housing development built in the early 1970s to house the elderly and disabled. Officials stated they plan to completely rehabilitate the development at an estimated cost of $6.6 million using Recovery Act funds due to the deteriorating condition and to address health and safety concerns. Officials told us they plan to replace the facility’s cabinets, flooring, windows, and heating and air-conditioning system. San Antonio Housing Authority officials stated that two contracts for architectural services have been awarded and that they expect to award construction contracts for this project by December 2009.

Safeguarding & TransparencyBack to top

Texas has taken several steps to help ensure the accountability and transparency of Recovery Act funds. As we mentioned in our April report, the Office of the Governor has established a steering committee, made up of all the state agencies receiving Recovery Act funds as well as the State Comptroller, that meets twice a week. Additionally, the State Comptroller’s Office has initiated mandatory weekly reporting for the use of Recovery Act funds. The State Auditor’s Office told us that they are anticipating an increase in audit effort in accordance with Single Audit guidelines due to expenditures of Recovery Act funds. The office is adding staff to handle this increase in audit effort. To expand its ability to monitor grant compliance, the Office of the Governor commented that it’s Criminal Justice Division was in the process of hiring two auditors to expand its ability to monitor compliance for Byrne Grant Recovery Act funds. In addition, the four state agencies we visited stated that they had enhanced their oversight efforts to monitor the flow and use of Recovery Act funds. For example, the Texas Department of Education noted it had improved its monitoring process to include a refined risk assessment methodology to help allocate limited staff resources to specific areas of risk. Further, training has been developed by a subcommittee of the State Agency Internal Audit Forum, to provide state agencies with additional guidance about accounting and transparency for Recovery Act funds.

Assessing the Effects of SpendingBack to top

State and local officials told us they were developing methods for collecting data and reporting on jobs created and plan to assess the impact that Recovery Act funds will have on the state and their agencies. For example, officials at each of the three Texas Department of Transportation district offices we visited told us they would use Federal Highway Administration guidance and forms for reporting jobs created or retained. The San Antonio Housing Authority is coordinating with HUD to create performance measures to monitor and report on job creation and retention. Additionally, officials with the Governor’s office told us that clear and consistent guidance was needed on how to document and report on jobs created.

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] Texas received increased FMAP grant awards of over $1.4 billion for the first three quarters of federal fiscal year 2009.
  • [3] The increased FMAP available under the Recovery Act is for state expenditures for Medicaid services.  However, the receipt of the 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.
  • [4] We did not review Edward Byrne Memorial Justice Assistance grants awarded directly to local governments in this report because the Bureau of Justice Assistance’s (BJA) solicitation for local governments closed on June 17; therefore, not all of these funds have been awarded.
GAO Contact
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Lorelei St James

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stjamesl@gao.gov

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