States Concerned That They Lack Resources To Oversee Spending of Economic Stimulus Funds, GAO Report Finds
As states prepare to receive the $49 billion from the economic stimulus package this fiscal year -- much of which is intended for health programs -- their largest concern is tracking how the money is spent, according to a Government Accountability Office report released on Thursday, McClatchy/Philadelphia Inquirer reports. According to the report, about two-thirds of this year's funding will go toward health care because medical needs typically are more pressing than other issues.
President Obama has said the funds will be subject to "unprecedented accountability" (Lightman, McClatchy/Philadelphia Inquirer, 4/24). According to the AP/Seattle Times, Obama put strict rules on tracking the funds, but states have said they do not have the resources to fund the additional oversight (Blackledge, AP/SeattleTimes, 4/23).
The report evaluated how 16 states and the District of Columbia are using their stimulus funding. GAO said that state budget shortfalls have resulted in "many states [reporting] significant declines in the number of oversight staff -- limiting their ability to ensure proper implementation and management" of stimulus funds. The report found that even states that are attempting to oversee the stimulus funds are confused over what to track (McClatchy/Philadelphia Inquirer, 4/24).
Vice President Biden responded to the report with a letter to Senate Homeland Security and Governmental Affairs Committee Chair Joseph Lieberman (I-Conn.) and ranking member Susan Collins (R-Maine) saying that the Office of Management and Budget will give more guidance to states next month on how they can be more flexible with the stimulus funds to allow the allocation of funding to pay for administrative and oversight services (CongressDaily, 4/24).
Republican Sens. George Voinovich (Ohio), Lamar Alexander (Tenn.) and John Thune (S.D.) on Thursday said the stimulus funding could result in states becoming dependent on the federal government for funding. According to Roll Call, Republicans have said that several states have used stimulus funding to permanently grow programs, including Medicaid, and warned that the states will request more federal money in two years when the funding expires. Thune said, "If you're a state government, it's windfall today, train wreck tomorrow" (Drucker, Roll Call, 4/23).
The GAO report is available online (.pdf).