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

Teaching Profession K-12 Essentials Forum Supporting the New K-12 Workforce: What Teachers Need to Stay at School
 Join this free virtual event to discover what teachers say they need to feel supported to stay in classrooms for the long haul.
College & Workforce Readiness K-12 Essentials Forum Career and Technical Education Takes Its Next Big Step
Join this free virtual event to hear creative approaches to modernize CTE programs and navigate the shift away from a near-exclusive focus on "college preparedness."

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 Oregon Rep. Says Linda McMahon Has ‘Betrayed Students,’ Pushes Impeachment
The Democratic lawmaker cited the transfer of programs to other agencies as reason to oust the ed. secretary.
Alissa Gary, oregonlive.com
1 min read
Rep. Suzanne Bonamici, D-Ore., conducts a news conference with members of the Democratic Women's Caucus (DWC), during the House Democrats 2025 Issues Conference at the Lansdowne Resort in Leesburg, Va., on March 14, 2025. Reps. Melanie Stansbury, D-N.M., left, and Teresa Leger Fernandez, D-N.M., are also pictured.
Rep. Suzanne Bonamici, D-Ore., conducts a news conference with members of the Democratic Women's Caucus (DWC), during the House Democrats 2025 Issues Conference at the Lansdowne Resort in Leesburg, Va., on March 14, 2025. Reps. Melanie Stansbury, D-N.M., left, and Teresa Leger Fernandez, D-N.M., are also pictured.
Tom Williams/CQ Roll Call via AP
Federal Opinion The Ed. Dept.'s Civil Rights and Special Ed. Offices Are Moving. Here's What That Means
Short-term changes are unlikely to be noticeable. Longer term, they may be consequential.
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 Opinion ‘None of This Is Abstract’: The Real Harm of Trump’s Ed. Dept. Civil Rights Move
Here’s why families will feel it when student civil rights enforcement moves to the Justice Dept.
Alumni Collective of the U.S. Dept. of Ed., Office for Civil Rights
4 min read
Image of a box of files
Laura Baker/Education Week + Getty
Federal Special Ed. and Civil Rights: What We Know About the Ed. Dept.'s Latest Moves
Special education is moving to HHS, and civil rights enforcement is moving to DOJ.
6 min read
Letters on the Department of Education building are missing after removal of America 250 banners, which included those of Booker T. Washington, Catharine Beecher and Charlie Kirk, March 18, 2026, in Washington.
Letters on the U.S. Department of Education building are missing in this March 18, 2026, photo in Washington. The agency last week announced it's transferring day-to-day management of special education and civil rights enforcement to different Cabinet agencies, the latest push by the Trump administration to dismantle the Education Department.
Allison Robbert/AP Photo