GAO: Recovery Act Shoring Up Distressed States

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States generally are using federal Recovery Act funds "to stabilize budgets and cope with fiscal distress," according to a new update on state stimulus spending by the Government Accountability Office (GAO), a federal watchdog agency. GAO is mandated by the American Recovery and Reinvestment Act to track selected states' and localities' use of stimulus funds and ensure that they are using federal dollars wisely. GAO, which is reviewing 16 states and Washington, D.C., representing about 65 percent of the U.S. population and two-thirds of the federal assistance available, is also assessing state plans to evaluate the funds' impact. The report found that, as of mid-June, the U.S. Treasury had paid out nearly $30 billion of the $49 billion in Recovery Act funds expected to be used by states and localities in fiscal 2009. The vast majority of the outlays are provided through the Medicaid federal match program and the State Fiscal Stabilization Fund, administered by the U.S. Department of Education. For additional details from selected states, check out a related GAO report with spending information across several of the major Recovery Act programs, including education, justice assistance and health.