	Our Reporting to Date under the Recovery Act

In order to meet our mandate to conduct bimonthly reviews and prepare  reports on selected states’ and localities’ use of funds, we have selected 16  states and the District of Columbia to track over the next few years to  provide an ongoing longitudinal analysis of the use of funds under the  Recovery Act. These states contain about 65 percent of the U.S.  population and are estimated to receive about two-thirds of the  intergovernmental grant funds available through the Recovery Act. Our first bimonthly report, issued two weeks ago, covers the actions of  selected states and localities under the Recovery Act as of April 20, 2009. The report also makes several  recommendations to the Office of Management and Budget (OMB)  directed toward improving accountability and transparency requirements;  clarifying the Recovery Act funds that can be used to support state efforts  to ensure accountability and oversight; and improving communications  with Recovery Act funds recipients about when funds become available  for their use and when federal guidance is modified or newly released. GAO’s Coordination with the Accountability Community

Regular and frequent GAO coordination with federal IGs, the Board, and  state and local government auditors is a critical component of our work to  ensure effective and efficient oversight. It is also important for us to coordinate with OMB, especially in regard to  the reporting requirements and other guidance to fund recipients and on  what information is to be collected in order to adequately evaluate how  well the Recovery Act achieves its objectives. We participate in weekly  coordination conference calls with OMB, the Board, IGs, and state and  local auditors. In addition to these regular calls, we are actively participating in  discussions with state and local organizations to further foster  coordination within the accountability community. For  example, GAO’s western regional director recently made a presentation at  the Pacific Northwest Audit Forum regarding GAO’s efforts to coordinate  with state and local officials in conducting Recovery Act oversight. The work of our 16 state teams that resulted in our first bimonthly report  on the actions of selected states and localities under the Recovery Act also  exemplifies the level of coordination we are undertaking with the  accountability community. During the conduct of our work, we collected  documents from and interviewed State Auditors, Controllers, and  Treasurers; state Inspectors General; and other key audit community  stakeholders to determine how they planned to conduct oversight of  Recovery Act funds. Our team working in North Carolina coordinated with the State Auditor  regarding that state’s plans to ensure that Recovery Act funds are  segregated from other federal funds coming through traditional funding  streams to help ensure accountability and transparency. GAO’s Authorities to Assist Whistleblowers and Elicit Public Contributions

Provisions in GAO’s authorizing statute, the Whistleblower Protection Act,  and the Recovery Act as well as a dedicated fraud reporting hotline  facilitate our ability to evaluate allegations of waste, fraud and abuse in  the federal government. Subject to certain limited exceptions, all  agencies must provide the Comptroller General access to information he  requires about the duties, powers, activities, organization, and financial  transactions of that agency, including for the purpose of evaluating  whistleblower complaints. Table 1 outlines the coverage of Whistleblower  Act and Recovery Act provisions. As part of our normal operations, we maintain a fraud reporting service. Updated Information on the Recovery Act’s R&D Funding

On March 19, 2009, we testified before this Subcommittee on our role in  helping to ensure accountability and transparency for Recovery Act  science R&D funding. As initial implementation of the Recovery Act unfolds, we are  tracking these agencies’ activities to plan for science R&D expenditures. OMB’s guidance requires that agencies’  submit program plans justifying Recovery Act expenditures that include a  program’s objectives, funding, activities, types of financial awards to be  used, schedule, environmental review compliance, performance measures,  description of plans to ensure accountability and transparency, and a plan  for monitoring and evaluation. As of April 28, 2009, only DOE’s Office of Science had obligated  any funds for R&D project expenditures. We are currently examining the  status of LGP’s efforts to solicit and review loan guarantee applications,  including its efforts to use Recovery Act funds, and its progress in  implementing the recommendations in our July 2008 report.
Why GAO Did This Study

This testimony discusses GAO's efforts to coordinate with the accountability community--the Recovery Accountability and Transparency Board (the Board), the Inspectors General (IGs), and state and local government auditors--to help ensure effective and efficient oversight of American Recovery and Reinvestment Act (Recovery Act) funds. The Recovery Act assigns GAO a range of responsibilities including bimonthly reviews of the use of funds by selected states and localities. Because funding streams will flow from federal agencies to the states and localities, it is important for us to coordinate with the accountability community. Also, on March 19, 2009, GAO testified before this Subcommittee about the more than $21 billion in Recovery Act funds estimated to be spent for research and development (R&D) activities at four federal agencies. This statement discusses (1) GAO's efforts to fulfill its responsibilities under the Recovery Act; (2) GAO's coordination with others in the accountability community; (3) GAO's authorities to assist whistleblowers and elicit public concerns; and (4) updated information on the status of Recovery Act funds for R&D. It is based in part on GAO's first bimonthly Recovery Act report, Recovery Act: As Initial Implementation Unfolds in States and Localities, Continued Attention to Accountability Issues Is Essential (GAO-09-580), and GAO's March 5, 2009 testimony, American Recovery and Reinvestment Act: GAO's Role in Helping to Ensure Accountability and Transparency (GAO-09-453T).

What GAO Found

GAO is carrying out its responsibilities to review the uses of Recovery Act funds and will also target certain areas for additional review using a risk-based approach. GAO's first bimonthly report examined the steps 16 states, the District of Columbia, and selected localities are taking to use and oversee Recovery Act funds. These states contain about 65 percent of the U.S. population and are estimated to receive about two-thirds of the intergovernmental grant funds available through the Recovery Act. GAO's report made several recommendations to the Office of Management and Budget (OMB) toward improving accountability and transparency requirements; clarifying the Recovery Act funds that can be used to support state efforts to ensure accountability and oversight; and improving communications with Recovery Act funds recipients. Soon after the Recovery Act passed, GAO began to coordinate with the accountability community. By the end of February 2009, GAO conducted initial outreach to IGs, the Board, OMB, and state and local auditors. Now, GAO participates in regular coordination conference calls with representatives of these constituencies to discuss Recovery Act efforts and regularly coordinates with individual IGs. GAO also participates in discussions with state and local organizations to further foster coordination. The work of GAO's 16 state and District of Columbia teams that resulted in the first bimonthly report on the actions of selected states and localities under the Recovery Act also exemplifies the level of coordination we are undertaking with the accountability community. For example, teams working in the states collected documents from and interviewed State Auditors, Controllers, and Treasurers; state IGs; and other key audit community stakeholders to determine how they planned to conduct oversight of Recovery Act funds. Provisions in statute as well as a fraud reporting hotline facilitate GAO's ability to evaluate allegations of waste, fraud, and abuse in the federal government. Under GAO's authorizing statute, subject to certain limited exceptions, all agencies must provide the Comptroller General with access to information about the duties, powers, activities, organization and financial transactions of that agency, including for the purpose of evaluating whistleblower complaints. The Whistleblower Protection Act and the Recovery Act provide additional authority for GAO to assist whistleblowers. GAO also maintains a fraud reporting service, which has recently generated more than 25 allegations of misuse of Recovery and other federal funds. These allegations are currently under review by our forensic audit team. Since GAO first provided this Subcommittee with an estimate of the Recovery Act R&D funds to be spent, agencies have submitted program plans to OMB that include, among other things, programs' objectives, schedules, and the types of financial awards to be used. OMB expects to approve these plans by May 15, 2009. As of April 28, 2009, only the Department of Energy's Office of Science had obligated Recovery Act R&D funds for project expenditures.