California's Emergency Management Agency is finally distributing federal stimulus funds, but the agency needs to monitor spending closely to use all the money by its 2013 deadline, the state auditor said in a report [PDF] issued yesterday.
The outlook for spending the $136 million is more hopeful than at this time last year, but there is still a possibility that the state – despite struggling to find money in other areas – will not meet the spending deadline and lose remaining funds.
The agency received the stimulus money through a U.S. Department of Justice grant in February 2009 as part of the federal American Recovery and Reinvestment Act, with the funds meant to be spent “as quickly as possible.”
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In a report from May 2010 [PDF], the state auditor warned that the agency was spending its funds too slowly and lacked a sufficient system for monitoring their use. Only $4 million – about 3 percent – of the funds had been awarded after one year and $35 million – or 26 percent – by March 2010, three weeks later.
Recipients receive the funds as reimbursements only after providing their program services. As of March 2010, the only stimulus money the agency had spent was $104,000 in administrative costs, meaning few recipients had actually started their programs.
As of May 27 of this year, the agency had awarded $133 million to 229 recipients and set aside another $1.2 million for administrative costs. But only about $64 million – less than half of the money awarded – had actually been spent. The funds are available until Feb. 28, 2013.
The state auditor said the agency will have enough time to “reimburse programs that make up about 55 percent of its federal grant,” but time may run out unless spending by recipients of the other 45 percent of funds is more strictly monitored.
“Without written policies or guidance to clearly communicate management’s expectations to the specialists and help ensure consistent monitoring of subrecipients’ progress in expending Recovery Act funds, there is an increased risk that funds will not be used before their reversion date,” the report says.
The agency currently reviews the spending informally and conducts only one site visit at most of the recipient facilities over the span of the grant.
Much of the money is allocated for probation supervision, offender treatment and drug abuse reduction. Funds also are in place to improve regional gang policing, human and firearms trafficking investigations, and multi-jurisdictional methamphetamine enforcement.
According to the chief of the agency's Drug Enforcement Section, many of the grant recipients were waiting for the state budget to pass before deciding how to spend the money. Seven of the 10 main programs receiving funds also are new and may have had difficulties organizing their initial spending. She said recipients will receive a letter this summer – halfway through many of their grant periods – reminding them how to effectively spend any remaining stimulus money.