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Feds target Arizona, 15 other states for stimulus audit

Arizona Capitol Reports Staff//March 19, 2009//[read_meter]

Feds target Arizona, 15 other states for stimulus audit

Arizona Capitol Reports Staff//March 19, 2009//[read_meter]

Arizona has not received most of the stimulus money it has coming. But when it arrives, the federal government will be around to make sure it is put to good use.

The U.S. Governmental Accountability Office selected Arizona to be one of 16 states, plus the District of Columbia, that the Congressional oversight agency will audit over the next two years ago to assist with the implementation of stimulus money, provide oversight and ensure compliance with the provisions of the American Recovery and Reinvestment Act.

Eileen Larence, who is heading up the eight-person team that will audit Arizona, said the GAO will likely be making regular visits to the state for at least two years. The team just finished its first week in Arizona and will be back on March 23. Larence said her team has already met with a number of state officials, including the Governor's Office and state Treasurer's Office.

The GAO is required under the ARRA to report to Congress every two months. The Arizona team's first report is due April 17.

"GAO is committed to really monitoring how the recovery act funds play out in the states over at least a couple of years," Larence said.

The 16 states were chosen based on a number of criteria, including the amount of stimulus money they will receive, whether the money will be used for new or existing programs, and whether the GAO expects to have issues over compliance with the ARRA. Much of the agency's focus will go toward states that are getting the largest portion of the $300 billion designated for state and local governments.

Larence said she is unaware of any particular compliance concerns that the GAO has for Arizona, which will receive about $4.2 billion. Arizona was likely chosen, in part, because the GAO wanted to ensure geographic diversity among the states chosen, Larence said.

Larence said the GAO will be examining each state based on four themes: how states and localities are using the funds; how they are monitoring and reporting the use of those funds to the federal government; what impact the funds are having in areas such as job creation; and what challenges they are facing in the implementation of the funds.

Paul Senseman, a spokesman for Gov. Jan Brewer, said it is kind of strange for the federal government to begin auditing the use of the stimulus funds before Arizona has received, or even applied for, most of the money. Brewer and lawmakers are waiting for the federal agencies that will oversee the different portions of stimulus money to finish drawing up guidelines.

Those guidelines have led to a great deal of concern across the country as several governors have public turned down portions of the stimulus money that they way will require their states to increase spending on some programs and incur financial commitments that will continue after the ARRA money is gone. Brewer has said she welcomes the stimulus money as a way to help Arizona bridge a 2010 budget shortfall that is expected to exceed $3 billion, but she is wary of any long-term financial commitments or funding increases that may be required of Arizona.

"The federal guidelines haven't been written yet. We wouldn't be able to know how we're going to use them yet," Senseman said. "But that doesn't prevent you from talking with them and implementing with them what they think might be the best strategies for process. … It's helpful to start early. But we'll catch up with the guidelines."

Larence said there is still plenty of work the audit teams and states can do together as they wait for the federal government to codify the requirements.

"The challenge for the states and the localities is to really be ready to spend these funds, even though they still have some questions about that. It is a puzzling challenge, I think, for the state agencies and localities," she said. "What we're out here to do is take a pulse as to where the state agencies and localities are in planning for those funds, what challenges do you foresee already, what questions they might have, and just really learning about Arizona as well and the economic situation in Arizona."

The GAO chose 20 programs in each state to monitor, with the programs chosen based on several areas such as education, housing and infrastructure spending. Other individual programs that deal with things like environmental issues, law enforcement, Medicaid and emergency response will be examined.

The other states chosen for GAO audits are California, Colorado, Florida, Georgia, Iowa, Illinois, Massachusetts, Michigan, Mississippi, New Jersey, New York, North Carolina, Ohio, Pennsylvania and Texas.

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