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GAO stimulus report shows no major issues for Arizona

Questions over whether Arizona was jeopardizing hundreds of millions of dollars in federal stimulus money were alleviated when the Legislature approved several new budget measures, and a federal report issued days later showed the state has had no major problems complying with the stimulus act.

A report issued by the U.S. Governmental Accountability Office on July 9, the second by the agency since the American Recovery and Reinvestment Act (ARRA) was approved by Congress, showed that in some cases, Arizona was ahead of other states in receiving and drawing down stimulus funds, according to Eileen Larence, who is heading the GAO’s stimulus audit team for Arizona.

“In terms of drawing down funds or getting funds out, in some cases I think Arizona was ahead of the game. For example, in the law enforcement grants I think it was the state that maybe had moved the farthest in terms of getting its money and trying to get it out to localities; and Medicaid, I think it’s one of the highest states in drawing down the Medicaid funding,” Larence said. “In most of the programs we looked at, I think Arizona, again, was at least in the top 50 percent in terms of using the funding.”

Arizona was among the first four states to have the U.S. Department of Energy approve its weatherization program, which is meant to reduce utility bills for low-income residents. The report also noted that several highway projects funded by stimulus money are underway.

The report indicated Arizona is sufficiently developing plans to track the use and impact of its stimulus money, a sum of more than $4 billion over the next two years. Gov. Jan Brewer established the Governor’s Office of Economic Recovery, which is tasked with meeting those tracking requirements. The agency’s first report on the use of the funds is due Oct. 10.

Jim Apperson, director of the Office of Economic Recovery, said the report is an accurate reflection of how Arizona is using and tracking the stimulus money, a requirement that includes assessing the number of jobs created by the funds.

“I think there are high expectations that the recovery act monies will quickly help turn this economy around, and sometimes things take longer than we would like. But we’re doing a very thorough job in cooperation with the federal agencies and GAO to make sure that Arizona is doing everything as we’re supposed to,” Apperson said.

Brewer on July 1 line-item vetoed about $3.2 billion in spending for K-12 education as part of her ongoing battle with the Legislature over the budget crisis. Some lawmakers worried that the move would threaten more than $800 million in stimulus money for education that Arizona was slated to receive, but those concerns were alleviated on July 6 when the Legislature reinstated the funding.

“We were looking at the issue of the veto on the education funding and what impacts, if any, that might have had on state fiscal stabilization. But it’s my understanding that the Legislature has now approved the 2010 budget for education, so I think that issue probably has gone away,” Larence said.

Arizona is one of 16 states, plus the District of Columbia, that were singled out to receive federal audits of its compliance with the ARRA and use of the stimulus funds.

Information about Arizona’s use of its stimulus money can be found at http://az.gov/recovery.

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