WASHINGTON - Despite President Obama's pledge that the $787 billion in stimulus money will be subject to "unprecedented accountability," many state officials worry that they lack the resources to properly oversee how their share of the money is being spent, Congress' watchdog agency said in a report yesterday.
With states slated to receive about $49 billion in this budget year - mostly for health, transportation and education programs - the Government Accountability Office found that the biggest concern was keeping track of the money. The GAO evaluated 16 states, including Pennsylvania and New Jersey, plus the District of Columbia.
"Officials in most of the states and the district expressed concerns regarding the lack of [stimulus] funding provided for accountability and oversight," it found.
Because of their own budget shortfalls, the GAO said, "many states reported significant declines in the number of oversight staff - limiting their ability to ensure proper implementation and management of [(stimulus] funds."
Obama administration officials have made following the money an important part of the stimulus program.
Vice President Biden, responsible for leading the oversight of the stimulus, responded quickly to the GAO report. In a letter to the Senate Homeland Security and Governmental Affairs Committee, which held a hearing yesterday on the report, Biden pledged "solution development."
That didn't calm many lawmakers. Committee chairman Joe Lieberman (I., Conn.) said "implementation challenges exist." And House Minority Leader John A. Boehner (R., Ohio) said the report "makes clear what Republicans have been warning about for months: Many states do not have the ability to ensure that stimulus dollars are spent wisely."
Sen. Claire McCaskill (D., Mo.) put the problem in earthier terms, using the government's weatherization program as an example.
"We are going to give [it] so much money and it will be contracted out," she said. "Who are they hiring? Who's checking to see there are internal controls?"
The GAO found that officials in a number of states worried how they would track jobs created by the stimulus.
The report also gave a detailed look at spending. About two-thirds of this year's state aid will go to health programs, since medical needs tend to be more immediate, while transportation will consume a bigger chunk of funding in years to come as highway and rail projects near completion.
In Pennsylvania, the report said, officials plan to use increased medical assistance funds to help cover an increased Medicaid caseload, ensure prompt claims payments, and offset the state's general fund deficit. Stimulus monies for highway infrastructure investment will go to such projects as repaving and bridge replacement and painting. Education moneys will be used to increase state funding for school districts and restore state funding for public colleges.
In New Jersey, officials plan to use increased medical assistance grants for, among other matters, covering an increase in the caseload and helping balance the state budget. Highway infrastructure allocations will include road improvements, pavement and signal rehabilitation, and bridge deck repairs. Decisions were pending on the allocation of education funds.
Many of the states the GAO looked at have set up mechanisms to monitor spending, and some have named "recovery czars." But there are potential problems. In Colorado, for instance, the GAO found that the health-care policy and financing agency has had three controllers in four years and that the field audit staff has been cut in half.
In New Jersey, the GAO found, "no additional staff will be hired to help" deal with new highway projects.
Even if they're trying, states are confused about what to track, the GAO said.
"Officials from a few states expressed the need for clarification on how to track indirect jobs," it said, "while others expressed concern about how to measure the impact of funding that is not designed to create jobs."