Across the United States, as of June 19, 2009, Treasury had outlayed about $29 billion of the estimated $49 billion in Recovery Act funds projected for use in states and localities in fiscal year 2009. More than 90 percent of the $29 billion in federal outlays has been provided through the increased Medicaid Federal Medical Assistance Percentage (FMAP) and the State Fiscal Stabilization Fund (SFSF) administered by the Department of Education. GAO's work focused on nine federal programs that are estimated to account for approximately 87 percent of federal Recovery Act outlays in fiscal year 2009 for programs administered by states and localities. Increased Medicaid FMAP Funding All 16 states and the District have drawn down increased Medicaid FMAP grant awards of just over $15 billion for October 1, 2008, through June 29, 2009, which amounted to almost 86 percent of funds available. Medicaid enrollment increased for most of the selected states and the District, and several states noted that the increased FMAP funds were critical in their efforts to maintain coverage at current levels. States and the District reported they are planning to use the increased federal funds to cover their increased Medicaid caseload and to maintain current benefits and eligibility levels. Due to the increased federal share of Medicaid funding, most state officials also said they would use freed-up state funds to help cope with fiscal stresses. Highway Infrastructure Investment As of June 25, DOT had obligated about $9.2 billion for almost 2,600 highway infrastructure and other eligible projects in the 16 states and the District and had reimbursed about $96.4 million. Across the nation, almost half of the obligations have been for pavement improvement projects because they did not require extensive environmental clearances, were quick to design, obligate and bid on, could employ people quickly, and could be completed within 3 years. State Fiscal Stabilization Fund As of June 30, 2009, of the 16 states and the District, only Texas had not submitted an SFSF application. Pennsylvania recently submitted an application but had not yet received funding. The remaining 14 states and the District had been awarded a total of about $17 billion in initial funding from Education--of which about $4.3 billion has been drawn down. School districts said that they would use SFSF funds to maintain current levels of education funding, particularly for retaining staff and current education programs. They also said that SFSF funds would help offset state budget cuts. Accountability States have implemented various internal control programs; however, federal Single Audit guidance and reporting does not fully address Recovery Act risk. The Single Audit reporting deadline is too late to provide audit results in time for the audited entity to take action on deficiencies noted in Recovery Act programs. Moreover, current guidance does not achieve the level of accountability needed to effectively respond to Recovery Act risks. Finally, state auditors need additional flexibility and funding to undertake the added Single Audit responsibilities under the Recovery Act. Impact Direct recipients of Recovery Act funds, including states and localities, are expected to report quarterly on a number of measures, including the use of funds and estimates of the number of jobs created and the number of jobs retained. The first of these reports is due in October 2009. OMB--in consultation with a broad range of stakeholders--issued additional implementing guidance for recipient reporting on June 22, 2009, that clarifies some requirements and establishes a central reporting framework.

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

Florida’s request for stabilization funds was approved on May 12, 2009, and the state received $1.8 billion of its total SFSF allocation of $2.7 billion. Almost $1.5 billion is for education stabilization, and $329 million is for government services. Based on Florida’s approved application, it will allocate 79 percent of the education stabilization funds to local education agencies (LEA) and 21 percent to institutions of higher education (IHE). Florida will make the funds available to LEAs and IHEs on July 1, 2009, the beginning of the school budgeting year. Florida will be using these funds to restore state aid to LEAs, helping to stabilize their budgets and, among other uses, retain staff. For example, Miami-Dade school district officials estimate that the Recovery Act funds will allow them to save 1,919 positions or 10 percent of the district’s teacher workforce.

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Highway Infrastructure Investment Funds

The U.S. Department of Transportation’s Federal Highway Administration (FHWA) apportioned $1.4 billion in Recovery Act funds to Florida. As of June 25, 2009, the federal government obligated about $1 billion. According to Florida Department of Transportation officials, the state has received bids for nine highway construction projects, and is currently advertising 39 additional Recovery Act projects—funded with $555 million in Recovery Act funds and $945 million in other federal, state, and local funds. Funding from the first round of FHWA obligations are being used for resurfacing projects, bridge repairs, and new construction. For example, in Hillsborough County, a major interstate project—costing over $445 million and using over $105 million in Recovery Act funds—will connect a major expressway to Florida’s Interstate 4 to improve the flow of traffic and create a truck-only lane to provide direct access to the Port of Tampa.

A cynic is a man who, when he smells flowers, looks around for a coffin. - Henry Louis Mencken