	Background

The Recovery Act provided DOE more than $43.2 billion, including $36.7  billion for projects and activities and $6.5 billion in borrowing authority. DOE Obligated 70 Percent and Reported Expenditures of 7 Percent of its Recovery Act Funds as of February 28, 2010

As of February 28, 2010, DOE reported that it had obligated $25.7 billion  (70 percent) and reported expenditures of $2.5 billion (7 percent) of the  $36.7 billion it received under the Recovery Act for projects and activities  (see table 1). By comparison, as of December 31, 2009, the department  reported it had obligated $23.2 billion (54 percent) and reported  expenditures of $1.8 billion (4 percent). The percentage of Recovery Act funds obligated varied widely across DOE  program offices. Several program offices—Energy Efficiency and  Renewable Energy, the Energy Information Administration,  Environmental Management, and Science—had obligated more than 85  percent of their Recovery Act funds by February 28, 2010, while other  program offices—Fossil Energy, the Loan Guarantee Program, and the  Western Area Power Administration—had obligated less than a third of  their Recovery Act funds by that time. Federal Requirements and Other Factors Affected the Timing of Project Selection and Starts

Officials from DOE and states that received Recovery Act funding from  DOE cited certain federal requirements and other factors that had affected  their ability to implement some Recovery Act projects. In particular, DOE  officials reported that Davis-Bacon requirements and the National  Environmental Policy Act affected the timing of some project selection and  starts, while state officials reported that the National Historic Preservation  Act affected their ability to select and start Recovery Act projects. DOE’s Weatherization Assistance Program  became subject to the Davis-Bacon requirements for the first time under the  Recovery Act after having been previously exempt from those  requirements. Nevertheless, DOE officials also  told us that several program offices—including Loan Guarantee, Fossil  Energy, Electricity Delivery and Energy Reliability, and the Power  Marketing Administrations—will likely have projects that significantly  impact the environment and will therefore require environmental  assessments or environmental impact statements. Likewise, officials from the Michigan Department of Human Services told  us that NHPA requires that weatherization projects receiving federal funds  undergo a state historic preservation review. These officials estimated that 90 percent of the homes  scheduled to be weatherized would need a historic review. For  example:    Newness of programs. Because some Recovery Act programs were newly  created, in some cases, officials needed time to establish procedures and  provide guidance before implementing projects. Staff capacity. Officials from DOE stated that they would need to hire a  total of 550 staff—both permanent and temporary—to carry out Recovery  Act-related work. For example, the department  needed to hire six new staff members to oversee and manage the program. State, Local, or Tribal Issues. In our recently issued report on factors  affecting the implementation of Recovery Act projects, we noted that the  economic recession affected some states’ budgets, which, in turn, affected  states’ ability to use some Recovery Act funds. GAO Has Ongoing Work on DOE Recovery Act Programs

In a report issued yesterday, we discussed recipient reporting in DOE’s  Weatherization Assistance Program.
Why GAO Did This Study

The American Recovery and Reinvestment Act of 2009 (Recovery Act)--initially estimated to cost $787 billion in spending and tax provisions--aims to promote economic recovery, make investments, and minimize or avoid reductions in state and local government services. The Recovery Act provided the Department of Energy (DOE) more than $43.2 billion, including $36.7 billion for projects and activities and $6.5 billion in borrowing authority, in areas such as energy efficiency and renewable energy, nuclear waste clean-up, and electric grid modernization. This testimony discusses (1) the extent to which DOE has obligated and spent its Recovery Act funds, and (2) the factors that have affected DOE's ability to select and start Recovery Act projects. In addition, GAO includes information on ongoing work related to DOE Recovery Act programs. This testimony is based on prior work and updated with data from DOE.

What GAO Found

As of February 28, 2010, DOE reported it had obligated $25.7 billion (70 percent) and reported expenditures of $2.5 billion (7 percent) of the $36.7 billion it received under the Recovery Act for projects and activities. For context, as of December 31, 2009, DOE reported that it had obligated $23.2 billion (54 percent) and reported expenditures of $1.8 billion (4 percent). The percentage of Recovery Act funds obligated varied widely across DOE program offices and ranged from a high of 98 percent in the Energy Information Administration to a low of 1 percent for the Loan Guarantee Program Office. None of DOE's program offices reported expenditures of more than a third of their Recovery Act funds as of February 28, 2010. Officials from DOE and states that received Recovery Act funding from DOE cited certain federal requirements that had affected their ability to implement some Recovery Act projects. For example: (1) Davis Bacon Requirements. Officials reported that Davis-Bacon requirements had affected the start of projects in the Weatherization Assistance Program because the program had previously been exempt from these requirements. (2) National Environmental Policy Act (NEPA). DOE officials told us that NEPA may affect certain projects that are likely to significantly impact the environment, thereby requiring environmental assessments or environmental impact statements. (3) National Historic Preservation Act (NHPA). Officials from the Michigan Department of Human Services told us that about 90 percent of the homes scheduled to be weatherized under the Weatherization Assistance Program would need a historic review. Additionally, DOE and state officials told us that (4) Newness of programs. In some cases, because some Recovery Act programs were newly created, officials needed time to establish procedures and provide guidance before implementing projects. (5) Staff capacity. DOE officials also told us that they experienced challenges in hiring new staff to carry out Recovery Act work. Also, District of Columbia officials told us they needed to hire 6 new staff members to oversee and manage the weatherization program. (6) State, local, or tribal issues. The economic recession affected some states' budgets, which also affected states' ability to use some Recovery Act funds, such as difficulty providing matching funds.