Special Report
Federal

GAO Calls Four States ‘High Risk’ on Stimulus

By Michele McNeil — September 24, 2009 3 min read
  • Save to favorites
  • Print

Includes updates and/or revisions.

The U.S. Department of Education has identified four states that are at “high risk” for economic-stimulus spending problems, according to a report issued last week by the Government Accountability Office.

California, Illinois, Michigan, and Texas have been singled out for intensive technical assistance by the Education Department to help them implement good practices in using the federal money. The District of Columbia and Puerto Rico also made the department’s list.

This latest report from the investigative arm of Congress examines implementation and accountability issues for a number of agencies and departments involving the $787 billion stimulus law, formally the American Recovery and Reinvestment Act. The Education Department oversees about $100 billion in such aid.

One of the first steps for the department was to identify “high risk” states, which were selected because of indicators “such as the number of monitoring or audit findings in the state and the level of turnover in education leadership within the state,” the GAO report says.

For those states and the other jurisdictions, the Education Department is concerned about their use of all stimulus aid, from State Fiscal Stabilization Fund money, which is intended to help states cope with the impact of budget shortfalls, to smaller grant programs.

To help, the department will provide the four states, the District of Columbia, and Puerto Rico with financial and programmatic expertise, which could include site visits.

Cash Management Issues

Already, the GAO auditors have found problems involving cash management of stimulus funds in California and Illinois.

Illinois, for example, has apparently sent fiscal-stabilization money to school districts before they were prepared to spend the funds, which was identified as a red flag by auditors. According to the report, Illinois is responding by better tracking and reporting so they can monitor cash balances. State officials there didn’t respond to a request for comment.

And some districts in California have large pots of stimulus funds sitting untouched after the state drew down 80 percent of its Title I aid and immediately sent the money to districts, apparently before they were ready to spend it.

The GAO auditors surveyed 10 California districts that had received the largest amounts of Title I aid and found that seven had not spent any, and that all 10 reported large cash balances, ranging from $4.5 million to about $135 million.

The GAO reported that California state officials have taken steps that include a pilot program to monitor school districts’ cash balances.

“We’ve made significant progress in addressing these issues,” said Kevin Chan, the director of audits and investigations for the California education department. He added that his office was trying to heed President Barack Obama’s urgency to get the stimulus money out fast, but discovered that local school districts weren’t prepared to spend pending guidance from the U.S. Department of Education.

Officials from Texas and the District of Columbia didn’t know they had been singled out as “high risk” for stimulus spending problems. Texas was told by federal officials it would receive intensive technical assistance because of its large size, said Debbie Ratcliffe, a spokeswoman for the Texas Education Agency. Chad Colby, a spokesman for the District of Columbia’s state superintendent of education, said the District has been deemed “high risk” for all federal education grants since 2006.

Meanwhile, in Michigan, education department spokeswoman Jan Ellis said her state was singled out primarily because of its large size, but that it “appreciates the additional technical guidance and is working closely with the federal government to ensure compliance.”

The department has also identified an additional 12 states as posing a “high risk” in the use of Title I funds. They are Arkansas, Colorado, Delaware, Florida, Idaho, Louisiana, Massachusetts, Missouri, New Jersey, New York, North Carolina, and Oklahoma.

A version of this article appeared in the September 30, 2009 edition of Education Week as GAO Report Sounds Stimulus Warning on Four States

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Teaching Profession Webinar
Evaluation Beyond the Checkbox: Turning Ratings Into Teacher Growth
Ratings alone don’t help teachers improve. Join us Nov. 10 to hear what happens after the evaluation: feedback, follow-up, and growth.
Content provided by Frontline Education
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Assessment Webinar
The Assessment Trust Crisis: How to Measure Learning in the Age of AI
AI is reshaping learning. Is assessment keeping up? Join this webinar to explore how to measure student thinking, not just right answers.
Content provided by Instructure
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
College & Workforce Readiness Webinar
From Student Trends to Counselor Action: Turning Insight Into Impact
Find out what is changing in how students approach planning for life after graduation and how schools can help.
Content provided by PowerSchool

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Federal What a Trump Admin. Review of Civil Rights Guidance May Mean for Schools
The Education and Justice departments say seven guidance documents "are no longer enforceable."
6 min read
A hat with the word 'VETO' on it sits on the Resolute Desk as President Donald Trump speaks after signing an executive order in the Oval Office of the White House Thursday, Nov. 5, 2026, in Washington.
A hat with the word "VETO" on it sits on the Resolute Desk as President Donald Trump speaks after signing an executive order in the Oval Office of the White House Thursday, Nov. 5, 2026, in Washington. The U.S. Department of Education under Trump has begun a review of civil rights guidance documents issued during the Obama and Biden administrations.
Alex Brandon/AP
Federal Video What the Midterm Elections Could Mean for Schools: 4 Takeaways
What Democratic victories and an electoral bright spot for Trump could mean for schools.
1 min read
People at a Democratic event react during an election night event at a hotel on Capitol Hill in Washington, Wednesday, Nov. 4, 2026.
People at a Democratic event react during an election night event at a hotel on Capitol Hill in Washington, Wednesday, Nov. 4, 2026.
J. Scott Applewhite/AP
Federal Opinion Here's What the Blue Wave Could Mean for Education
Rick Hess and Andy Rotherham analyze how the midterms will shape school choice, sports, and more.
•
9 min read
The United States Capitol building as a bookcase filled with red, white, and blue policy books in a Washington DC landscape.
Luca D'Urbino for Education Week
Federal Democrats Will Control Congress. What Educators Can Expect
Democrats won key races across the country, with implications for K-12 policymaking in Washington.
6 min read
House Democratic Leader Hakeem Jeffries, D-N.Y., gives encouragement to volunteers at a phone bank at a hotel on Capitol Hill in Washington, Tuesday, Nov. 3, 2026.
House Democratic Leader Hakeem Jeffries, D-N.Y., gives encouragement to volunteers at a phone bank at a hotel on Capitol Hill in Washington, Tuesday, Nov. 3, 2026. Democrats are on track to be back in charge in the lower chamber, giving them leverage to push their own K-12 agenda and resist President Donald Trump's.
J. Scott Applewhite/AP