Guidance needed

WASHINGTON-A government study released a little more than two months after the passage of President Obama's $787 billion stimulus package reveals that states do not have the resources to guard against waste, fraud, and abuse as the billions of dollars are doled out.

State and local governments will be given more than a third of the stimulus dollars, and the Government Accountability Office report on the spending bill released Thursday concluded that state leaders need help managing this large influx of cash. The GAO said the states need guidance on how much of this money can be used to both manage and audit the billions.

Fiscally conservative congressional lawmakers jumped on the report Thursday, saying it verifies concerns that keeping tabs on the stimulus money will be a difficult-if not impossible-task. State officials admitted to the GAO that due to budget shortfalls that have led to a reduction of oversight staff they would not be able to track both the money and the potential jobs created.

House Republican leader John Boehner of Ohio said much of the money is likely to be spent in a manner that has nothing to do with creating jobs: "In recent weeks, we have learned that taxpayer dollars are being used to fund a skateboard park in Rhode Island, bike racks in Washington, D.C., and highway studies instead of construction projects in Ohio-all in the name of economic stimulus. Today's report is a warning that we may have only seen the tip of the iceberg so far when it comes to the waste and abuse of taxpayer funds resulting from the so-called stimulus."

Vice President Joe Biden, who Obama tapped to head stimulus oversight, responded to the report in a letter to congressional leaders where he promised solutions, saying the Budget Office would issue in May "updated guidance" on many of the concerns addressed by state officials.

The GAO report also revealed where some of the money is going-rather than toward shovel-ready projects that would create jobs to get the economy back on track, the initial batch of the stimulus money is being used by many states to bolster up existing programs in health care and education. Health programs are receiving about two-thirds of this year's state aid. Cash-strapped states are likely to get addicted to the new dollars that are pouring in.

"We need to look at the fact that once the money ends, these folks will be down here asking us for more money," said Sen. George Voinovich, R-Ohio.

Some Senate lawmakers are worried that funneling this temporary stimulus money into already existing programs, such as expanding Medicaid rolls, will set up states for future financial headaches once the money runs out and programs and services will have to be cut. In effect, the early returns of the stimulus money shows it is attempting to solve one financial crisis by creating the potential for another crisis down the road.

"The GAO study says that if you are a state government, then it's windfall today, train wreck tomorrow," said Sen. John Thune, R-S.D.