FROM DOC_DB.DOCUMENT D, DOC_DB.REPORTS R, DOC_DB.BACKGROUND B
*
ERROR at line 2:
ORA-00942: table or view does not exist
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-627
TITLE: COMMUNITY SERVICES BLOCK GRANT PROGRAM: HHS Should
Improve Oversight by Focusing Monitoring and Assistance Efforts
on Areas of High Risk
DATE: 06/29/2006
-----------------------------------------------------------------
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-06-627
* Results in Brief
* Background
* Federal Role
* Standards for Internal Control in the Federal Government
* State Role
* CSBG Network Resources
* OCS Lacks Internal Controls and a Risk Management Framework
* OCS Lacked Policies and Procedures to Help Ensure Effective
* OCS Did Not Use or Collect Available Information Needed to A
* Frequency of State On-Site Monitoring Varied, but Selected S
* Frequency of On-site Visits Varied
* States' Capacity to Conduct On-site Monitoring Varied
* States Made Efforts to Provide Additional Oversight of Local
* OCS Targeted Some Training and Technical Assistance Funds to
* OCS Designated $1 Million or Less of Its Annual Training and
* Limited Data on the Results of the Assistance Showed That So
* Conclusions
* Recommendations for Executive Action
* Comments from the Department of Health and Human Services on
* GAO Contact
* Staff Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Report to Congressional Requesters
United States Government Accountability Office
GAO
June 2006
COMMUNITY SERVICES BLOCK GRANT PROGRAM
HHS Should Improve Oversight by Focusing Monitoring and Assistance Efforts
on Areas of High Risk
Community Services Block Grant Program Community Services Block Grant
Program Community Services Block Grant Program Community Services Block
Grant Program am Community Services Block Grant Program Community Services
Block Grant Program Community Services Block Grant Program Community
Services Block Grant Program Community Services Block Grant Program
Community Services Block Grant Program Community Services Block Grant
Program Community Services Block Grant Program Community Services Block
Grant Program Community Services Block Grant Program Community Services
Block Grant Program Community Services Block Grant Program Community
Services Block Grant Program Community Services Block Grant Program
Community Services Block Grant Program Community Services Block Grant
Program Community Services Block Grant Program Community Services Block
Grant Program Community Services Block Grant Program Community Services
Block Grant Program Community Services Block Grant Program Community
Services Block Grant Program Community Services Block Grant Program
Community Services Block Grant Program Community Services Block Grant
Program Community Services Block Grant Program Community Services Block
Grant Program Community Services Block Grant Program Community Services
Block Grant Program Community Services Block Grant Program Community
Services Block Grant Program Community Services Block Grant Program
Community Services Block Grant Program Community Services Block Grant
Program Community Services Block Grant Program Community Services Block
Grant Program Community Services Block Grant Program Community Services
Block Grant Program Community Services Block Grant Program Community
Services Block Grant Program Community Services Block Grant Program
Community Services Block Grant Program
GAO-06-627
Contents
Letter 1
Results in Brief 3
Background 5
OCS Lacks Internal Controls and a Risk Management Framework Needed to
Carry Out Effective Monitoring Efforts 10
Frequency of State On-Site Monitoring Varied, but Selected States
Performed Other Oversight Activities 13
OCS Targeted Some Training and Technical Assistance Funds to Grantees with
Problems, but Information on Results Is Limited 18
Conclusions 22
Recommendations for Executive Action 22
Comments from the Department of Health and Human Services on Our
Evaluation 23
Appendix I Objectives, Scope, and Methodology 24
Appendix II Community Services Block Grant Program: HHS Needs to Improve
Monitoring of State Grantees, GAO-06-373R 27
Appendix III The Department of Health and Human Services's Response to
GAO-06-373R 30
Appendix IV Ranking of States Based on Percentage of Local CSBG
Subgrantees with Single Audit Findings 33
Appendix V Comments from the Department of Health & Human Services 38
Appendix VI GAO Contact and Staff Acknowledgments 42
Related GAO Products 43
Tables
Table 1: Local Agency Monitoring Visits Conducted by Select States,
2003-2005 14
Table 2: Total CSBG Funds, Expenditures for Administration, and Numbers of
CSBG Staff and Local Agencies, Fiscal Year 2005 15
Table 3: Office of Community Services CSBG Training and Technical
Assistance Funding, Fiscal Years 2002 to 2005 19
Table 4: States Visited in Our Study 25
Table 5: Single Audit Data for States Related to Findings among Local CSBG
Subgrantees Ranked by the Percentage of Agencies with Findings, 2002 34
Table 6: Single Audit Data for States Related to Findings among Local CSBG
Subgrantees Ranked by the Percentage of Agencies with Findings, 2003 36
Figures
Figure 1. CSBG Network's Total Resources, Fiscal Year 2004 10
Figure 2: Results of Assistance to 46 Local Agencies from Special State
Technical Assistance and Peer-to-Peer Grants as Reported by Grantees,
Fiscal Years 2002 through 2005 20
Abbreviations
ACF Administration for Children and Families
CAA community action agency
CDBG Community Development Block Grant
CSBG Community Services Block Grant
DOE Department of Energy
HHS Department of Health and Human Services
LIHEAP Low-Income Home Energy Assistance Program
MICA Mid-Iowa Community Action
NASCSP National Association of State Community Service Programs
OCS Office of Community Services
OMB Office of Management and Budget
ROMA Results Oriented Management and Accountability
SSTA Special State Technical Assistance
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States Government Accountability Office
Washington, DC 20548
June 29, 2006 June 29, 2006
The Honorable Howard P. "Buck" McKeon Chairman Committee on Education and
the Workforce House of Representatives The Honorable Howard P. "Buck"
McKeon Chairman Committee on Education and the Workforce House of
Representatives
The Honorable Michael N. Castle Chairman Subcommittee on Education Reform
Committee on Education and the Workforce House of Representatives The
Honorable Michael N. Castle Chairman Subcommittee on Education Reform
Committee on Education and the Workforce House of Representatives
The Honorable John A. Boehner House of Representatives The Honorable John
A. Boehner House of Representatives
The Honorable Tom Osborne House of Representatives The Honorable Tom
Osborne House of Representatives
The Community Services Block Grant (CSBG) provided over $600 million to
states in fiscal year 2005 to support over 1,000 local antipoverty
agencies. These local agencies, predominately community action agencies
(CAA), often use CSBG to support their institutional frameworks for
providing services, including staff and facilities. They also use CSBG
dollars to leverage other public and private resources to support a
variety of activities, including Head Start programs, low-income home
energy assistance programs, and low-income housing. The Office of
Community Services (OCS) within the Department of Health and Human
Services (HHS) is primarily responsible for overseeing this block grant,
and the states are responsible for overseeing local agencies. In our
February 2006 letter to HHS ( GAO-06-373RGAO-06-373R ), GAO reported
several challenges that OCS faced in ensuring effective oversight of CSBG
funds and, at that time, made recommendations for improvements. The
Community Services Block Grant (CSBG) provided over $600 million to states
in fiscal year 2005 to support over 1,000 local antipoverty agencies.
These local agencies, predominately community action agencies (CAA), often
use CSBG to support their institutional frameworks for providing services,
including staff and facilities. They also use CSBG dollars to leverage
other public and private resources to support a variety of activities,
including Head Start programs, low-income home energy assistance programs,
and low-income housing. The Office of Community Services (OCS) within the
Department of Health and Human Services (HHS) is primarily responsible for
overseeing this block grant, and the states are responsible for overseeing
local agencies. In our February 2006 letter to HHS (), GAO reported
several challenges that OCS faced in ensuring effective oversight of CSBG
funds and, at that time, made recommendations for improvements.
The CSBG Act requires OCS to visit several states each year to evaluate
the states' use of CSBG funds and report on its findings to the visited
states and Congress annually. The law also requires OCS to provide
training and technical assistance funds to states in order to, among other
purposes, support state monitoring efforts and improve local programs'
quality. The law requires states to visit all local agencies at least once
during each 3-year period and more often if local agencies fail to meet
The CSBG Act requires OCS to visit several states each year to evaluate
the states' use of CSBG funds and report on its findings to the visited
states and Congress annually. The law also requires OCS to provide
training and technical assistance funds to states in order to, among other
purposes, support state monitoring efforts and improve local programs'
quality. The law requires states to visit all local agencies at least once
during each 3-year period and more often if local agencies fail to meet
state-established goals, requirements, and standards. The Office of
Management and Budget (OMB) issued guidance to assist auditors in
determining whether states are carrying out their CSBG monitoring
responsibilities to visit each local agency once every 3 years in
compliance with the law. The law also requires states to report
performance data to OCS annually, such as data on the number of people
served by different antipoverty programs. Additionally, other federal laws
and standards for ensuring accountability, such as internal control
standards and the Single Audit Act, affect CSBG management and reporting.
To better understand the efforts that OCS and states have undertaken to
oversee the use of CSBG funds, we agreed to examine (1) the extent to
which HHS's oversight of state efforts to monitor local agencies complied
with federal laws and standards, (2) the efforts selected states have made
to monitor local agencies' compliance with fiscal requirements and
performance standards, and (3) the extent to which HHS targeted federal
CSBG training and technical assistance funds to efforts to assist local
agencies with financial or management problems and what is known about the
results of the assistance.
To address the first objective, we reviewed federal laws and standards to
obtain information on OCS's requirements for providing oversight to
states, interviewed federal officials on their efforts, and obtained
available documentation on these efforts from fiscal year 2003 through
fiscal year 2005. To assess state monitoring efforts, we reviewed federal
laws and standards to obtain information on states' CSBG oversight
responsibilities and interviewed and collected documentation from state
and local officials in Illinois, Pennsylvania, Missouri, Texas, and
Washington on state oversight efforts from fiscal year 2003 through fiscal
year 2005. We selected states that had, among other characteristics,
varying grant amounts and numbers of local agencies, state administrative
structures that may have allowed for collaboration with other programs
that provide funds to CAAs, varying Single Audit results among their local
agencies, and recommendations from CSBG associations for promising
oversight practices. We also obtained information on state CSBG audit
findings from auditors in the five states. In addition, we interviewed
federal and state officials in Head Start, the Low-Income Home Energy
Assistance Program (LIHEAP), and the Community Development Block Grant
Program (CDBG)-three programs from which CAAs often receive funds-to
obtain information on the degree to which those officials collaborate with
federal and state CSBG officials with regard to oversight. Our results on
selected state monitoring efforts are not generalizable to all states. For
the third objective, we interviewed federal officials and their
contractors that provide training and technical assistance to obtain
information on whether OCS grants were targeted and how they determined
that the grant-supported efforts were effective. We also obtained and
reviewed training and technical assistance grant applications and reports
for the two programs that support efforts to assist local agencies for
fiscal year 2002 through fiscal year 2005 to assess these efforts and
their results. Furthermore, we reviewed Single Audit data to assess the
extent to which states had local agencies with findings reported in fiscal
years 2002 and 2003, the most recent information available. All 50 states,
the District of Columbia, and Puerto Rico were included in our review of
Single Audit findings. We assessed the reliability of Single Audit and
programmatic data by conducting electronic and manual data testing and
interviewing officials knowledgeable about the data. We determined that
the data were sufficiently reliable for the purposes of this report. (See
app. I for a more detailed description of the scope and methodology of our
review.) We performed our work between July 2005 and May 2006 in
accordance with generally accepted government auditing standards.
Results in Brief
In its efforts to oversee states, OCS lacked effective policies,
procedures, and controls to help ensure that it fully met legal
requirements for monitoring states and federal internal control standards.
OCS also lacked a process to assess states' CSBG management risks.
Although OCS met statutory requirements by visiting nine states in fiscal
years 2003 through 2005, it did not issue reports to states and annual
reports to Congress on monitoring visits, which is also statutorily
required. In addition, OCS did not meet internal controls standards
because it sent monitoring teams without adequate financial expertise and
lost documentation from state visits it conducted in fiscal years 2003 and
2004. We notified the Assistant Secretary for Children and Families about
OCS's lack of effective CSBG monitoring controls and offered
recommendations for improvements in a letter dated February 7, 2006. OCS
has responded that it intends to take actions to address each of our
recommendations presented in the letter. In addition to issues previously
reported, we found that OCS did not systematically use available
information, such as state performance data and audit findings, or collect
key information, such as the results of state monitoring of local
grantees. Such data would allow OCS to assess states' risk related to
managing CSBG programs and target its limited monitoring resources to
states with the highest risks. Federal officials said that they visited
states after learning from state or local officials that some grantees had
management challenges, such as financial problems or staff turnover.
However, in other instances, OCS officials could not recall their basis
for selecting states for monitoring visits.
All five states we visited conducted on-site monitoring of local agencies
with varying frequency and performed additional oversight efforts, such as
reviewing financial and programmatic reports from local agencies.
Officials in Illinois and Texas conducted at least one on-site visit to
each local agency between 2003 and 2005. However, officials in the other
three states visited their local agencies less frequently. Pennsylvania
and Washington officials monitored over 90 percent of their local agencies
between 2003 and 2005. Missouri visited about 20 percent during this time
and allowed up to 5 years between visits to some agencies. While state
offices varied in the frequency of their monitoring visits, officials in
all states told us that they visited local agencies with identified
problems more often, and three states conducted risk assessments to
determine which local agencies should receive additional visits. State
officials we visited have taken different views on what they must do to
meet the legal requirement to visit local agencies at least once during
each 3-year period, and OCS has not issued guidance interpreting this
requirement. During a 2004 audit, Pennsylvania state auditors, using OMB
guidance, found the state CSBG program to be out of compliance with
federal requirements because it did not monitor local agencies once every
3 years. In contrast, although Missouri officials visited 4 of 19 local
agencies between 2003 and 2005, the state CSBG office maintains it is in
compliance with monitoring requirements because it plans to visit all
local agencies within the 3-year periods of 2001 to 2003 and 2004 to 2006.
We also found that state offices varied in their capacity to conduct
monitoring visits. Specifically, Missouri, Pennsylvania, and Washington
officials told us that challenges, such as staff shortages, affected their
ability to monitor local agencies. Nonetheless, each of the five state
programs that we visited regularly reviewed local agencies' reports,
including their community action plans, budgets, and performance data.
State CSBG officials also reviewed Single Audit reports for local agencies
when CSBG findings were mentioned. In addition, CSBG state programs
established relationships with officials in other programs that provided
funds to the same local grantees to learn the results of other monitoring
efforts. Generally, state programs offered training and technical
assistance to local agencies with findings from on-site monitoring visits.
OCS targeted some training and technical assistance funds to local
grantees with financial and programmatic management problems, but
information on the results of this assistance is limited. In fiscal years
2002 through 2005, OCS designated between $666,000 and $1 million of its
annual $10 million training and technical assistance funds to local
agencies with problems, but had no process in place to strategically
allocate these funds to areas of greatest need. Without systematically
tracking which local agencies experienced problems and what those problems
were, OCS did not have adequate information to determine whether its
training and technical assistance programs and the amounts dedicated to
them were appropriate for addressing the greatest needs of local agencies
and the state agencies that oversee them. OCS currently allocates training
and technical assistance funds based on input from some state and local
agencies, but this process has not been guided by a comprehensive
assessment of state and local needs. Additionally, there is limited
information on the results of OCS's grant programs that target local
agencies with problems. The final reports on awarded grants provided no
information on the outcomes of assistance for nearly half of the 46 local
agencies that we identified as being served.
To provide better oversight of state agencies, we recommended that the
Assistant Secretary for Children and Families direct OCS to (1) conduct a
risk-based assessment of state programs by systematically collecting and
using information, (2) establish policies and procedures to help ensure
monitoring is focused on states with the highest risks, (3) issue guidance
on state responsibilities with regard to complying with the requirement to
monitor local agencies during each 3-year period, (4) establish reporting
guidance on training and technical assistance grants that allows OCS to
obtain information on outcomes for local agencies, and (5) implement a
strategic plan that will focus its training and technical assistance
efforts on areas in which states face the greatest needs. In its written
comments on a draft of this report, HHS officials agreed with our
recommendations and stated that they have made plans to address them.
Background
The CSBG program provides funds to state and local agencies to support
efforts that reduce poverty, revitalize low-income communities, and lead
to self-sufficiency among low-income families and individuals.1 CSBG dates
back to the War on Poverty of the 1960s and 1970s, which established the
Community Action program, under which the nationwide network of local
community action agencies was developed. A key feature of Community Action
was the direct involvement of low-income people in the design and
administration of antipoverty activities through mandatory representation
on local agency governing boards. The federal government had direct
oversight of local agencies until 1981, when Congress created CSBG and
designated states as the primary recipients. States subgrant funds to over
1,000 eligible local agencies that are primarily community action
agencies.
1 Territories and tribes also receive CSBG funds but were not included in
the scope of our work.
In order to ensure accountability, both federal and state program offices
have oversight responsibilities, including on-site monitoring of grantees
and subgrantees, following-up on monitoring findings, and providing
technical assistance.
Federal Role
OCS administers CSBG and is required by law to conduct on-site compliance
evaluations of several states in each fiscal year, report to states on the
results of these evaluations, and make recommendations for improvements.
Upon receiving an evaluation report, states must submit a plan of action
that addresses recommendations. In addition, OCS is required to annually
report to Congress on the performance of the CSBG program, including the
results of state compliance evaluations. For states to receive CSBG
funding, they must submit, at least every 2 years, an application and plan
to OCS stating their intention that funds will be used to, among other
things, support activities to help families and individuals with the
following: achieve self-sufficiency, find and retain meaningful
employment, attain an adequate education, make better use of available
income, obtain adequate housing, and achieve greater participation in
community affairs.
The CSBG Act requires OCS to reserve 1.5 percent of annual appropriations
(about $10 million in fiscal year 2005) for training and technical
assistance for state and local agencies; planning, evaluation, and
performance measurement; assisting states with carrying out corrective
action activities; and monitoring, reporting, and data collection
activities. The fiscal year 2005 Consolidated Appropriations Act
conference report directed OCS to develop a 3-year strategic plan to guide
its training and technical assistance efforts. OCS has provided assistance
to local agencies with problems primarily through two grant programs:
Special State Technical Assistance (SSTA) Grants and the Peer-to-Peer
Technical Assistance and Crisis Aversion Intervention (Peer-to-Peer)
Grants. OCS generally awarded Special State Technical Assistance Grants to
states or state associations of community action agencies to provide
support to local agencies that have problems. Since 2001, OCS has awarded
the Peer-to-Peer Grant solely to Mid-Iowa Community Action (MICA), a
community action agency, to offer problem assessment, interim management,
and other technical assistance services to local agencies with problems.
Standards for Internal Control in the Federal Government
In addition to the federal requirements in law, OCS, like other federal
agencies, is required to adhere to internal control standards established
by the Office of Management and Budget and GAO in order to help ensure
efficient and effective operations, reliable financial reporting, and
compliance with federal laws.2 Internal controls help government program
managers achieve desired results through effective stewardship of public
resources. Such interrelated controls comprise the plans, methods, and
procedures used to meet missions, goals, and objectives and, in doing so,
support performance-based management and should provide reasonable
assurance that an organization achieves its objectives of (1) effective
and efficient operations, (2) reliable reporting, and (3) compliance with
applicable laws and regulations.
The five components of internal controls are
o Control environment: creating a culture of accountability
within an entire organization-program offices, financial services,
and regional offices-by establishing a positive and supportive
attitude toward the achievement of established program outcomes.
o Risk assessment: identifying and analyzing relevant risks, both
internal and external, that might prevent the program from
achieving objectives, and developing processes that can be used to
form a basis for the measuring of actual or potential effects of
relevant factors and manage their risks. During such a risk
assessment process, managers should consider their reliance on
other parties to perform critical program operations.
o Control activities: establishing and implementing oversight
processes to address risk areas and help ensure that management's
directives-especially about how to mitigate and manage risks-are
carried out and program objectives are met.
o Information and communication: using and sharing relevant,
reliable, and timely operational and financial information to
determine whether the agency is meeting its performance and
accountability goals.
o Monitoring: tracking improvement initiatives over time and
identifying additional actions needed to further improve program
efficiency and effectiveness.
2 For more information on internal control standards, see GAO, Standards
for Internal Control in the Federal Government, GAO/AIMD-00-21 .3.1
(Washington: D.C.: November 1999), and Office of Management and Budget,
Circular No. A-123, Management's Responsibility for Internal Control,
(Washington: D.C.: Dec. 21, 2004).
State Role
The CSBG Act requires each state to designate a lead agency to administer
CSBG funds and to provide oversight of local agencies that receive funds.
States are required to award at least 90 percent of their federal block
grant allotments to eligible local agencies, but are allowed to determine
how CSBG funds are distributed among local agencies. States may use up to
$55,000 or 5 percent of their CSBG allotment, whichever is higher, for
administrative costs.3 States may use remaining funds for the provision of
training and technical assistance, coordination and communication
activities, payments to ensure they target funds to areas with the
greatest need, support for innovative programs and activities conducted by
local organizations, or other activities consistent with the purposes of
the CSBG Act. In addition, state and local agencies that expend $500,000
or more ($300,000 or more prior to 2004) in total federal awards are
required under the Single Audit Act to undergo an audit annually and
submit a report to the Federal Audit Clearinghouse. Furthermore,
individual federal funding sources may also be reviewed annually under the
Single Audit, depending on the size of these expenditures.4
The CSBG Act requires states to monitor local agencies to determine
whether they meet performance goals, administrative standards and
financial management and other state requirements. States are required to
perform this monitoring through a full on-site review of each local agency
at least once during each 3-year period and to conduct follow-up reviews,
including prompt return visits, to local agencies that fail to meet the
goals, standards, and requirements established by the state. OMB has
issued Single Audit compliance review guidance for CSBG that explicitly
mentions that when auditors review state programs, they should determine
whether states are visiting each local agency once every 3 years to assess
if states comply with the law. States must also offer training and
technical assistance to failing local agencies.
3 Administrative costs are not directly associated with providing services
and can include staff salaries and costs related to reporting program
data.
4 For a specific funding source to be reviewed under a Single Audit
annually, its expenditures would have to represent between 0.15 percent
and 3 percent of the total amount of federal funds expended by a state or
local agency. The threshold varies depending on total expenditures of
federal awards.
Local agencies are required to submit a community action plan to states
that contains a community needs assessment, a description of the service
delivery system for services provided by or coordinated with CSBG funds, a
description of how they will partner with other local agencies to address
gaps in services they provide, a description of how funds will be
coordinated with other public and private resources, and a description of
how funds will be used to support innovative community and
neighborhood-based initiatives.
The CSBG Act requires both state and local agencies to participate in a
performance measurement system. Results Oriented Management and
Accountability (ROMA) is the OCS-sponsored performance management system
that states and local agencies use to measure their performance in
achieving their CSBG goals. State agencies report annually on ROMA using
the CSBG Information System survey, which the National Association for
State Community Services Programs (NASCSP) administers.
CSBG Network Resources
In fiscal year 2004, the network of local CSBG agencies received almost
$9.7 billion from all sources. About $7 billion of these funds came from
federal sources, including about $600 million from CSBG. Other federal
programs funding the CSBG network included Head Start, LIHEAP, CDBG, Child
Care and Development Fund, Temporary Assistance for Needy Families, and
the Social Services Block Grant (see fig. 1). HHS's Administration for
Children and Families contributed 90 percent of the $4.4 billion in funds
provided to local agencies through HHS.
Figure 1. CSBG Network's Total Resources, Fiscal Year 2004
Note: Percentages do not sum to 100 because of rounding.
HHS received about $637 million in CSBG funding for fiscal year 2005 and
about $630 million for fiscal year 2006.
OCS Lacks Internal Controls and a Risk Management Framework Needed to Carry Out
Effective Monitoring Efforts
In its efforts to oversee states, OCS did not fully comply with federal
laws related to monitoring states and internal control standards and
lacked a process to assess state CSBG management risks. OCS visited nine
states in fiscal years 2003 through 2005. However, as mentioned in our
letter to the Assistant Secretary for Children and Families, OCS lacked
the policies, procedures, and other internal controls to ensure effective
monitoring efforts. As a result, states and Congress are not receiving
required information on monitoring findings, and states may not have made
improvements to how they administer CSBG funds. We recommended that the
OCS director establish formal written policies and procedures to improve
OCS's monitoring and related reporting, and OCS officials have made plans
to address each of the recommendations included in the letter. We also
found that OCS did not systematically use or collect available information
that would allow it to assess states' CSBG management risks. Officials
told us that they considered a variety of risk-related factors when
selecting sites for monitoring visits, including reports from state and
local officials about financial management problems and staff turnover,
but they did not have a systematic approach to assess risk or target
monitoring toward states with the greatest needs.
OCS Lacked Policies and Procedures to Help Ensure Effective Monitoring of States
but Plans Improvements
OCS lacked policies, procedures, and internal controls to help ensure
effective on-site monitoring of state CSBG programs but has made plans to
address these issues. OCS officials told us they visited nine states since
2003: Delaware, Louisiana, Maryland, and North Carolina in 2003; Alabama
and Montana in 2004; and Kentucky, New Jersey, and Washington in 2005.5
During these visits, OCS officials told us they used a monitoring tool to
assess the administrative and financial operations of state programs.
However, OCS sent monitoring teams that lacked required financial
expertise to conduct evaluations of states and did not issue final reports
to states as required by law. Consequently, the visited states may have
been unaware of potential OCS findings and, therefore, may not have
developed corrective action plans if needed. Furthermore, OCS officials
also told us that they lost documentation for the state visits conducted
in fiscal years 2003 and 2004, leaving them unable to report to states
they visited or perform appropriate follow-up procedures. OCS officials
did not include information on their monitoring visits in their most
recent CSBG report to Congress, released in December 2005, as statutorily
required. In addition, OCS has not issued reports to Congress annually, as
required by law.
We reported on OCS's monitoring challenges to the Assistant Secretary for
Children and Families on February 7, 2006, and made recommendations for
improving these conditions (for a copy of this letter, see app. II).
Specifically, we recommended that the OCS director establish formal
written policies and procedures to (1) ensure that teams conducting
monitoring visits include staff with requisite skills, (2) ensure the
timely completion of monitoring reports to states, (3) maintain and retain
documentation of monitoring visits, and (4) ensure the timely issuance of
annual reports to Congress. In response to this letter, OCS officials said
that they plan to address each of our recommendations by hiring additional
monitoring staff with expertise in financial oversight, training all staff
on requirements that states must meet prior to visits, establishing a
triennial monitoring schedule for visiting states, developing new
guidelines for reporting to states and maintaining monitoring documents,
and issuing timely reports to Congress, among other efforts. See appendix
III for more details on HHS's response to our letter.
5 OCS also visited the Navajo Nation in 2003.
OCS Did Not Use or Collect Available Information Needed to Assess States' Risk
of Mismanaging Their CSBG Programs
OCS did not systematically use or collect key information that would allow
it to assess states' CSBG management risks and target its limited
monitoring resources toward states with the greatest risks. OCS officials
told us that they used a risk-based approach to select states to visit,
but we found the selection process to be ad hoc and often unexplained. OCS
officials explained that they used information received from state and
local officials on state CSBG management concerns to decide in which
states to conduct compliance evaluation visits. For example, upon learning
that local agencies in Louisiana were concerned that they had not received
all the funds allotted to them, OCS decided to conduct an evaluation of
that state. OCS officials also mentioned that when selecting states to
visit, they considered such risk factors as staff turnover and having
limited information about the state in general. However, OCS officials
could not provide an explanation for why they visited six of the nine
states that had undergone evaluations since 2003 and had no formal,
written criteria for determining which states to visit.
Each state provides annual program performance information to OCS, but OCS
does not systematically use this information to assess states' risks of
not meeting program objectives. Specifically, states annually provide OCS
with information about the number of people receiving services and the
types of services local agencies provided and categorize this information
according to designated program goals, which can provide OCS with data on
whether state and local agencies are performing as expected. OCS also did
not systematically use information on the amount of CSBG funds states have
expended. OCS officials said they reviewed state Single Audit reports when
CSBG was included, but we found state CSBG programs generally fell below
thresholds to receive an annual required audit.
OCS does not systematically collect other key information that would allow
federal officials to assess risk related to states' oversight efforts and
therefore cannot determine whether states are fulfilling their requirement
to visit local agencies. For example, although OCS required states to
certify that they will conduct statutorily required on-site visits of
local agencies in their CSBG applications, it did not require states to
submit documentation, such as reports on their monitoring findings, to
verify that they had conducted these visits. OCS officials told us that
they relied on state Single Audit reports to learn which states did not
comply with monitoring requirements. However, we found these audits
rarely, if ever, review state CSBG programs. OCS officials told us that
they were not aware of how rarely CSBG is reviewed through the Single
Audit.
OCS also does not systematically collect information on the local agencies
that experience management problems or on the extent to which identified
problems are being resolved. The federal CSBG director told us that as a
result, OCS may not be fully aware of the extent to which states had local
agencies facing challenges with managing CSBG. OCS is aware of some local
agencies with problems but has not established regular methods for
collecting this information. OCS officials told us that it is the states'
responsibility to identify and address problems in local agencies. In our
review of Single Audit data, we found that financial management problems
were common, with about 30 percent of local agencies reporting findings in
2002 and 2003. However, less than 10 percent of all local agencies
reported more severe findings that could result in undetected financial
reporting error and fraud, that are material weaknesses, in either year
(see app. IV for Single Audit data).
Frequency of State On-Site Monitoring Varied, but Selected States Performed
Other Oversight Activities
All five states we visited conducted on-site monitoring of local agencies
with varying frequency and performed additional oversight efforts, such as
reviewing financial and programmatic reports from local agencies. The
state programs that we visited had different views on what they must do to
meet federal requirements to monitor local agencies at least once during
each 3-year period, and OCS had not issued guidance clarifying the time
frames states should use when conducting on-site visits. Specifically,
officials in two states conducted the on-site visits at least once between
2003 and 2005, but officials in the other three states visited their local
agencies less frequently. While states varied in their frequency of
monitoring visits, all five states offices visited local agencies with
identified problems more often. Capacity to conduct on-site monitoring
varied among the five state offices, particularly in the areas of
administrative and financial monitoring resources. Officials in all five
states that we visited reviewed local agency reports as an additional
oversight effort and provided required training and technical assistance
to local agencies. In addition, some state offices coordinated with other
federal programs that fund local activities to gain further insight into
local agencies' management practices.
Frequency of On-site Visits Varied
The frequency of on-site visits to local agencies varied among the five
states we visited, ranging from 1 to 5 years between site visits. State
CSBG offices in Illinois and Texas conducted visits to each local agency
between 2003 and 2005. Specifically, officials in these two states visited
at least half of their agencies each year. In contrast, Pennsylvania,
Missouri, and Washington officials monitored their local agencies less
frequently, with Missouri allowing up to 5 years to pass between
monitoring visits to some local agencies. Washington and Pennsylvania
officials had visited nearly all of their local agencies from 2003 through
2005, leaving less than 10 percent unmonitored during this period.
Conversely, the Missouri state CSBG office visited 4 of 19 local agencies
from 2003 to 2005, leaving nearly 80 percent of agencies unmonitored since
2001 or 2002. While states varied in their frequency of monitoring visits,
officials in all five states told us they visited local agencies with
identified problems more often. Illinois, Texas, and Washington assessed
local agencies' management risks to prioritize which local agencies they
visited more frequently during a monitoring cycle. Table 1 below shows how
many local agencies these states monitored with on-site CSBG reviews from
2003 through 2005.
Table 1: Local Agency Monitoring Visits Conducted by Select States,
2003-2005
Total Percentage Number of Number of Number of
Number of number of of agencies agencies agencies
local agencies agencies reviewed, reviewed, reviewed,
State agencies revieweda reviewed 2003 2004 2005
Illinois 36 36 100 36 36 29
Missouri 19 4 21 1 0 4
Pennsylvania 44 40 91 5 10 25
Texas 47 49b 100b 39 27 34
Washington 31 29 94 10 13 11
Source: GAO analysis of data provided by state CSBG programs.
aNumber of agencies reviewed is not a sum total of reviews conducted in
each year, since some agencies were reviewed in multiple years.
bThe number and percentage of agencies reviewed in Texas between 2003 and
2005 exceeds its totals because two of the local agencies reviewed in 2003
subsequently closed.
Although the CSBG Act states that local agencies should be visited at
least once during each 3-year period, the state officials we visited have
different views on what is necessary to meet this requirement, and OCS has
not issued guidance to states to clarify how the law should be
interpreted. During the fiscal year 2004 Single Audit, Pennsylvania state
auditors, using OMB guidance stating that reviews of local agencies must
be conducted once every 3 years, found the state CSBG program to be out of
compliance with federal requirements. However, the Missouri CSBG program
manager stated that even though 15 local agencies have not been visited
between 2003 and 2005, according to the state's interpretation of the CSBG
law, the CSBG office will meet monitoring requirements because all local
agencies will be visited within the two 3-year periods of 2001 to 2003 and
2004 to 2006. For example, the Missouri officials visited five agencies in
2001, during the first 3-year period, and plan to visit these agencies
again in 2006, during the second 3-year period.
States' Capacity to Conduct On-site Monitoring Varied
Administrative and financial monitoring resources varied in the five
states we visited. Specifically, administrative funding ranged from less
than 1 percent ($135,380) of CSBG funds in Missouri to 4 percent ($1.2
million) in Texas. The Missouri program manager told us that the state
CSBG office used less than 1 percent for administration because state
hiring restrictions prevented the CSBG program from hiring full-time CSBG
staff. In addition, state officials in Missouri, Pennsylvania, and
Washington told us that staff shortages prevented them from visiting local
agencies more frequently. The number of staff available, funding for
administration, and other related information are shown in table 2.
Table 2: Total CSBG Funds, Expenditures for Administration, and Numbers of
CSBG Staff and Local Agencies, Fiscal Year 2005
Percentage of
Number total CSBG funds Number
of CSBG Total CSBG Administrative for of local
State staffa funds expenditures administration agencies
Illinois 7 $29,934,237 $1,037,843 3.5 36
Missouri 5 $17,535,155 $135,380 0.8 19
Pennsylvania 7 $26,828,424 $722,311 2.7 44
Texas 15 $30,514,311 $1,226,817 4.0 47
Washington 4 $7,433,155 $214,790 2.9 31
Source: GAO analysis of data from states, NASCSP, and HHS.
aIncludes part-time staff paid with CSBG funds.
State programs generally developed and made use of written monitoring
guides, but they varied in their ability to assess local agencies'
financial operations. The five state programs we visited all had written
guides for monitoring visits that covered such areas as financial
controls, governance, personnel, performance outcomes, and previous
monitoring findings. However, state auditors in Washington told us that
the CSBG office could not provide evidence that the guides were
consistently used during monitoring visits because available documentation
showed that the guides were often incomplete after a visit. Illinois,
Texas, and Washington offices regularly used accountants to support their
reviews of local agencies' financial operations as part of the on-site
monitoring visits. Conversely, Missouri and Pennsylvania officials told us
they did not regularly involve accountants in their monitoring efforts but
had taken steps to improve the guides they used to review local agencies'
finances. Specifically, the Missouri CSBG office, in consultation with
MICA, made changes to its monitoring guide and provided financial training
to its staff. The state CSBG office in Pennsylvania, with input from state
budget staff, revised the financial aspects of its monitoring guide.
States Made Efforts to Provide Additional Oversight of Local Agencies
The states that we visited provided oversight in addition to on-site
monitoring through such activities as reviewing reports, coordinating with
other federal and state programs, and providing formal training and
technical assistance. All five state programs collected regular financial
and performance reports and reviewed local expenditure reports. In
addition, officials in the five states told us that they reviewed reports
of the annual Single Audits for local agencies when they included findings
related to the CSBG program. For example, a state audit manager in
Washington reviewed the audits and regularly notified the CSBG program
office when local agency findings were identified, and state CSBG program
staff followed up with local agency officials and worked to ensure that
the findings were addressed. States also required all local agencies to
submit performance data. State officials told us that local agencies
established their own performance goals, and the state offices reviewed
these goals and sometimes modified them in consultation with local
agencies. Additionally, all state CSBG offices reviewed local community
action plans.
Illinois, Texas, and Washington officials used information from these
additional oversight activities to conduct risk assessments and select
local agencies for more frequent on-site monitoring visits. In conducting
these risk assessments, the state programs considered such factors as the
amount of funds received from the state, the time since the last
monitoring visit, and any identified concerns about an agency's
competency, integrity, or proficiency. State officials told us that they
directed local agencies to use preventive training and technical
assistance to address any issues raised by risk assessments.
Three of the five state CSBG offices that we visited also coordinated
oversight activities with other federal and state programs that fund local
agencies. For example, the Missouri, Texas, and Washington offices
performed joint monitoring visits with state LIHEAP officials, and
Missouri exchanged the results of local agency monitoring visits with the
regional Head Start office. Coordination with other federal and state
programs that provide funds to local agencies, such as housing-related
programs and Head Start, generally consisted of occasional meetings and
the sharing of some information. Also, OCS and the Head Start Bureau
entered into a memorandum of understanding to foster collaboration and
improve oversight of local agencies. While most regional and state
officials told us they were aware of the memorandum of understanding, some
told us that its intent was unclear and that they needed additional
guidance to implement it more usefully.
State associations of community action agencies played an important role
in providing formal training and technical assistance to local agencies.
CSBG officials in Illinois, Missouri, Pennsylvania, and Texas relied on
state community action associations to provide technical assistance. For
example, the Illinois Community Action Association received state training
and technical assistance funds to provide on-line resources, peer
coaching, and routine conferences on a regular basis. Missouri's state
association for community action agencies, the Missouri Association for
Community Action, also received CSBG training and technical assistance
funds, which it used to help local agencies improve communications and
management information systems and provide additional technical assistance
as needed. In addition the Missouri association provides networking
opportunities for local agencies and has a full-time training expert on
staff, supported by the state CSBG contract, to provide one-on-one support
to local agencies. In addition to training provided by the association,
the Texas CSBG staff sponsored conferences and workshops that allowed the
staff members to provide training directly to local agencies. In
Washington, the association and state staff sponsored discussion groups
for the local agencies. Additionally, during on-site monitoring visits,
state CSBG officials provided immediate informal technical assistance and
follow-up with local agencies on monitoring findings when necessary.
OCS Targeted Some Training and Technical Assistance Funds to Grantees with
Problems, but Information on Results Is Limited
While OCS targeted some training and technical assistance funds to local
grantees with financial and programmatic management problems, the
information on results of this assistance is limited. In fiscal years 2002
through 2005, OCS designated between $666,000 and $1 million of its annual
$10 million training and technical assistance funds to local agencies with
problems, but OCS did not have information to determine whether its
training and technical assistance programs and their funding amounts were
appropriate for addressing the areas of greatest needs. Specifically, the
federal CSBG director explained that OCS currently allocates training and
technical assistance funds based on input from some state and local
agencies, but this process was not guided by a systematic assessment of
state and local needs. Information on the results of OCS's current grant
programs that target local agencies with problems was limited. However,
information provided by progress reports for these grants showed that some
of the agencies assisted had improved.
OCS Designated $1 Million or Less of Its Annual Training and Technical
Assistance Funding to Assist Local Agencies with Problems but Does Not Know if
These Funds Addressed the Greatest Needs
In fiscal years 2002 through 2005, OCS designated $1 million or less of
its annual $10 million training and technical assistance funds to assist
local agencies with problems, but it had no way to determine whether this
money was allocated in a way that addressed the greatest needs of state
and local agencies. OCS divided its annual $10 million training and
technical assistance funds among program support, contracts, and grants.
The Deputy Director of OCS told us that program support funds paid
salaries and expenses for OCS officials that manage CSBG grants, and
contract funds paid for costs associated with logistics such as outreach
and meeting with grantees, costs related to a management information
system, and costs related to grant competitions. Training and technical
assistance grants may be used for a variety of purposes, and OCS allocated
these funds to support different types of activities each year. For
example, OCS frequently funded activities such as supporting the
implementation of ROMA, encouraging agencies to share innovative ideas,
and providing program and management training opportunities for community
action professionals. OCS designated between $666,000 and $1 million of
annual training and technical assistance grants to assist local agencies
with problems through two grant programs: Special State Technical
Assistance Grants and the Peer-to-Peer Technical Assistance and Crisis
Aversion Intervention Grants. These grants were commonly used to address
to management, financial, and board governance problems at local agencies.
Table 3 shows the allocation of CSBG funding for grants, contracts, and
program support.
Table 3: Office of Community Services CSBG Training and Technical
Assistance Funding, Fiscal Years 2002 to 2005
Thousands of dollars
Allocation type 2002 2003 2004 2005
Grants to assist local agencies with $666 $845 $1,000 $900
problems
Special State Technical Assistance 366 545 500 400
Peer-to-Peer 300 300 500 500
Other grants 6,158 5,303 6,215 6,571
Contracts 1,483 2,436 1,432 1,039
Program support 1,871 1,540 1,469 1,557
Totalsa $10,218 $10,125 $10,117 $10,066
Source: HHS Office of Community Services and GAO analysis
aColumn totals may not add up because of rounding.
Despite a congressional recommendation, OCS officials told us there is no
process in place to strategically allocate its approximately $10 million
in training and technical assistance funds among program areas. OCS
drafted a strategic plan for allocating its training and technical
assistance funds-an action directed by congressional conferees in the
fiscal year 2005 Consolidated Appropriations Act conference report-but did
not implement the plan. The federal CSBG director told us that OCS did not
implement the strategic plan because the President's recent budget
proposals did not include funding for CSBG, although Congress has
continued to provide funding for the program. The federal CSBG director
also told us that the draft plan focused resources on such areas as
financial integrity and management, leadership enhancement, and data
collection.
The federal CSBG director also told us that OCS currently allocates
training and technical assistance funds based on input from some state and
local agencies, but this process was not guided by a systematic assessment
of state and local needs and did not involve guidance or specifications on
the actual amounts that should be awarded for activities. Specifically,
OCS sought input each year from the Monitoring and Assessment Taskforce-a
group made up of some state and local CSBG officials and national CSBG
associations such as the National Association of State Community Service
Programs (NASCSP)-to generate a list of priority activities. OCS then
presented this list at national community action conferences, such as
those sponsored by NASCSP or the Community Action Partnership, for
additional comments. However, OCS does not track which local agencies
experienced problems and what those problems were. As a result, OCS could
not provide us with information on the extent to which these current
efforts are addressing those needs.
Limited Data on the Results of the Assistance Showed That Some Local Agencies
Had Improved
Information on the results of OCS grant programs that targeted local
agencies with problems was limited. However, the available information
showed that some local agencies have improved financial and programmatic
management as a result of the assistance they received. Our review of all
available grant applications and subsequent progress reports for SSTA and
Peer-to-Peer grants identified 68 local agencies that these grants
targeted for assistance between 2002 and 2005. Of these 68 agencies, 22
had no results available because the assistance was ongoing and therefore
final progress reports were not yet due. We identified outcomes for 25 of
the remaining 46 agencies, as shown in figure 2. Of these 25 agencies, 18
reported improvement, and the remaining 7 agencies had unresolved issues,
had closed, or had undeterminable results. Results were unknown for the
other 21 agencies because their grant progress reports did not include
information on outcomes.
Figure 2: Results of Assistance to 46 Local Agencies from Special State
Technical Assistance and Peer-to-Peer Grants as Reported by Grantees,
Fiscal Years 2002 through 2005
Notes: This figure does not include does not include the 22 of the 68
agencies identified as being targeted for assistance and for which data on
results are not available because final progress reports on the grants
awarded to assist these agencies are not yet due.
Among the 18 agencies that showed improvement, 5 agencies still had
remaining challenges to address.
OCS officials told us that they hold grantees accountable for conducting
activities under the proposed scope of training and technical assistance
grants, not whether these activities result in successful outcomes for the
local agencies they assist. OCS's guidance to training and technical
assistance grantees recommends that the grantees report whether activities
are completed but does not include a requirement to report on outcomes.
Further, HHS's guidance on discretionary grant reporting, which covers
CSBG training and technical assistance grants, does not specify what
information program offices should collect on performance and outcomes. We
also spoke with officials in HHS's Office of Inspector General who
mentioned that on the basis of prior reviews the office had some concerns
about the administration of CSBG discretionary grants. Specifically, these
officials had concerns about the completeness and accuracy of progress
reports and whether grantees were meeting their goals.
Officials involved in efforts to use grants to assist agencies gave mixed
reviews on the effectiveness of activities funded by these grants. State
and local officials in Texas and Missouri spoke highly of their
interaction with MICA to assist agencies with problems. State officials in
Texas said they had used an SSTA grant to assist two local agencies and
had hired MICA as the contractor to provide the assistance. Texas
officials were pleased with the assistance that MICA provided and said
that the state did not have the resources to provide the kind of
long-term, on-site assistance that MICA offered. Missouri officials told
us that all five local agencies that the state had contracted with MICA to
work with had benefited from MICA's expertise, particularly with regard to
financial matters. Like Texas, the Missouri office also used SSTA grants
to provide assistance to four of these agencies. In contrast, we also
spoke to national, regional, and state community action association
officials who said they had worked with local agencies that received
assistance from MICA and had concerns about MICA's work. Specifically,
they told us that MICA was not always effective in resolving local
agencies' problems, did not use money efficiently, and had an apparent
conflict of interest stemming from its practice of conducting agency
assessments and offering services to correct problems those assessments
identify. For example, an Ohio official who managed a local agency's
contract told us that even with 6 months of paid assistance from MICA, the
local agency had closed. In response to these criticisms, a MICA official
said that some problems at local agencies were too severe for them to
address and that MICA tries to be transparent about its costs by issuing a
detailed proposal before starting work with an agency. Additionally, the
MICA official said that MICA and OCS officials had discussed the conflict
of interest issue, and OCS had encouraged MICA to continue efforts to
assess agencies and address their problems.
Conclusions
Under the CSBG program, federal, state, and local agencies work together
to help low-income people achieve self-sufficiency. The federal
government's role is to oversee states' efforts to ensure that local
agencies properly and effectively use CSBG funds. OCS currently lacks the
procedures, information, and guidance to grantees that it needs to
effectively carry out its role. Specifically, OCS does not fully use the
data it collects and does not collect other key information on state
oversight efforts and the outcomes of training and technical assistance
grants that could enhance its oversight capabilities. Additionally, OCS
has not issued guidance for how often states should visit local agencies.
Thus, OCS cannot determine where program risks exist or effectively target
its limited resources to where they would be most useful. Consequently,
OCS may have missed opportunities to monitor states facing the greatest
oversight challenges and to identify common problem areas where it could
target training and technical assistance.
Recommendations for Executive Action
In order to provide better oversight of state agencies, we recommend that
the Assistant Secretary for Children and Families direct OCS to take the
following actions:
o Conduct a risk-based assessment of state CSBG programs by
systematically collecting and using information. This information
may include programmatic and performance data, state and local
Single Audit findings, information on state monitoring efforts and
local agencies with problems, and monitoring results from other
related federal programs that may be obtained by effectively using
the memorandum of understanding with the Head Start program and
other collaborative efforts.
o Establish policies and procedures to help ensure that its
on-site monitoring is focused on states with highest risk.
o Issue guidance on state responsibilities with regard to
complying with the requirement to monitor local agencies at least
once during each 3-year time period.
o Establish reporting guidance for training and technical grants
that would allow OCS to obtain information on the outcomes of
grant-funded activities for local agencies.
o Implement a strategic plan that will focus its training and
technical assistance efforts on the areas in which states face the
greatest needs. OCS should make use of risk assessments and its
reviews of past training and technical assistance efforts to
inform the strategic plan.
Comments from the Department of Health and Human Services on Our Evaluation
We provided a draft of this report to the Department of Health and Human
Services and received written comments from the agency. In its comments,
HHS officials agreed with our recommendations and, in response, have
planned several changes to improve CSBG oversight. Specifically, HHS
officials stated that OCS is finalizing a risk-based strategy to identify
state and local agencies most in need of oversight and technical
assistance based on characteristics identified in state plans, audit
reports, previous monitoring and performance reports, and reports from
other programs administered by local agencies that receive CSBG funds. HHS
officials said that this strategy will result in OCS implementing a
triennial monitoring schedule they plan to have fully operational by
fiscal year 2008. HHS officials also said that by October 1, 2006, OCS
will issue guidance to state CSBG lead agencies to clarify the states'
statutory obligation to monitor all local entities receiving CSBG funding
within a 3-year period, as well as requirements for states to execute
their monitoring programs. Additionally, HHS officials said that OCS has
worked with a group of local and state CSBG officials and national CSBG
associations to develop a comprehensive training and technical assistance
strategic plan focused on issues such as leadership, administration,
fiscal controls, and data collection and reporting. See appendix V for
HHS's comments.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of this report to
the Assistant Secretary for Children and Families, relevant congressional
committees, and other interested parties. We will also make copies
available to others upon request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov .
Please contact me at (202) 512-7215 if you or your staff have any
questions about this report. Other major contributors to this report are
listed in appendix VI.
Marnie S. Shaul Director, Education, Workforce, and Income Security Issues
Appendix I: Objectives, Scope, and Methodology Appendix I: Objectives,
Scope, and Methodology
To gain a better understanding of oversight efforts undertaken by state
and federal program offices to monitor the Community Services Block Grant
(CSBG) program and ensure the accountability of funds, we examined (1) the
extent to which the Department of Health and Human (HHS) oversight of
states efforts to monitor local agencies complied with federal laws and
standards, (2) the efforts selected states have made to monitor local
agencies' compliance with fiscal requirements and performance standards,
and (3) the extent to which HHS targeted federal CSBG training and
technical assistance funds to efforts to assist local agencies with
financial or management problems and what is known about the results of
the assistance.
To address the first objective, we reviewed federal laws and standards to
obtain information on the Office of Community Services's (OCS)
requirements and responsibilities for the oversight of states and
interviewed federal officials about their oversight efforts. In addition,
we obtained and reviewed available information on OCS monitoring policies
and procedures; documentation of federal monitoring visits of states
conducted during fiscal years 2003 through 2005; other information OCS
collects from states, including state applications and performance data;
and guidance issued by OCS to communicate program-related information,
concerns, and priorities to grantees to assess OCS's compliance with laws
and standards. We also reviewed available Single Audit data for local
agencies and grouped them by state to assess the percentage of local
agencies with Single Audit findings at both the national and state levels
reported in fiscal years 2002 and 2003, the most recent years for which
information was available. The scope of this review included the District
of Columbia and Puerto Rico as well as the 50 states. We assessed the
reliability of Single Audit data by performing electronic and manual data
testing to assess whether the data were complete and accurate. We also
assessed the reliability of CSBG statistical data by interviewing
officials knowledgeable about data collection and maintenance. We
determined that the data were sufficiently reliable for the purposes of
this report. In addition, we interviewed federal officials with Head
Start, the Low-Income Home Energy Assistance Program, and the Community
Development Block Grant program, which also distribute funds to local
agencies, to learn whether officials from these programs shared
information with CSBG officials to support oversight efforts.
To address the second objective, we reviewed federal laws and standards to
obtain information on states' CSBG oversight responsibilities and
conducted site visits.
We visited five states, Illinois, Missouri, Pennsylvania, Texas, and
Washington, that were selected using several criteria including grant
amounts, number of local agencies, state administrative structure, and
analysis of Single Audit results among local agencies. CSBG association
officials recommended some of these states based on promising efforts to
monitor local agencies. Table 4 provides characteristics we considered for
each state.
Table 4: States Visited in Our Study
Criteria Illinois Missouri Pennsylvania Texas Washington
Recommendations SQRT SQRT SQRT SQRT
from CSBG
associations
Size of grant $29,934,237 $17,535,155 $26,828,424 $30,514,311 $7,433,155
(range $2.5
million - 56.5
million)
Number of local 36 19 44 47 31
agencies (Range
1-63)
State Few Few Many Few Many
administrative
structure
(few: fewer
than five
programs
providing funds
to CAAs are in
the same state
agency; many:
five or more)
Occurrences of Below Above Above Above Below
financial
findings (above
or below
average
national
percentage of
subgrantees
reporting 2003
Single Audit
data)
Recently Yes
monitored by
HHS (FY 2005)
Percentage of 11.8 10.1 9.9 15.8 11.4
people in
poverty
(National
Average =
12.1%)
Census region Midwest Midwest Northeast South West
Source: GAO analysis of data from the U.S. Census Bureau, Federal Audit
Clearinghouse, NASCSP, and the Community Action Partnership.
During our state site visits, we interviewed and collected information
from state and local officials in Illinois, Missouri, Pennsylvania, Texas,
and Washington about state oversight efforts from fiscal year 2003 through
fiscal year 2005. Specifically, we interviewed state program officials and
reviewed related documentation including state guidance and directives to
local agencies, application instructions, state on-site monitoring
schedules, on-site monitoring guides, sample contracts, and reporting
forms for local agencies. We also visited three local agencies in each
state and interviewed staff to learn more about state oversight and
monitoring efforts, including application processes, fiscal and
performance reporting, on-site monitoring, and training and technical
assistance. In each state we visited, we reviewed program files for six
local agencies, including files for the three we visited and three others,
that included community action plans and applications, financial and
performance reports, and state monitoring reports and follow-up
correspondence. In addition, we obtained information on state audit
findings related to CSBG and met with state auditors during site visits to
learn more about additional state oversight of CSBG and related programs
and local agencies. We also interviewed state officials in the Low-Income
Home Energy Assistance Program and the Community Development Block Grant
programs, as well as regional HHS officials, to learn whether any
coordination occurred between the programs to support state oversight
efforts. Our results on the five states that we visited are not
generalizable to all state CSBG programs.
To address the third objective, we interviewed federal officials and
contractors that provide training and technical assistance to obtain
information on the extent to which OCS grants were targeted to assist
agencies with problems and how they determined whether these efforts were
effective. We obtained and reviewed training and technical assistance
grant applications and progress reports for Special State Technical
Assistance (SSTA) Grants and Peer-to-Peer Technical Assistance and Crisis
Intervention (Peer-to-Peer) Grants for fiscal year 2002 through fiscal
year 2005 to assess efforts to assist local agencies with problems and the
results of these efforts. This review included applications for all 39
SSTA Grants awarded during this period, progress reports issued in 6-month
intervals for the Peer-to-Peer Grant, and available final progress reports
for the SSTA Grants. We were not able to obtain some SSTA Grant progress
reports because the assistance was still ongoing, particularly for grants
issued recently. We also interviewed a national association representative
and state and local officials to learn about the results of training and
technical assistance efforts.
We conducted our work from July 2005 through May 2006 in accordance with
generally accepted government auditing standards.
Appendix II: Community Services Block Grant Program: HHS Needs to Improve
Monitoring of State Grantees, HGAO-06-373RH Appendix II: Community
Services Block Grant Program: HHS Needs to Improve Monitoring of State
Grantees, GAO-06-373R
Appendix III: The Department of Health and Human Services's Response to
HGAO-06-373RH Appendix III: The Department of Health and Human Services's
Response to GAO-06-373R
Appendix IV: Ranking of States Based on Percentage of Local CSBG
Subgrantees with Single Audit Findings Appendix IV: Ranking of States
Based on Percentage of Local CSBG Subgrantees with Single Audit Findings
Tables 5 and 6 present Single Audit data by state for local CSBG agencies
(i.e., community action agencies) for 2002 and 2003, respectively. For
each state, we report (1) the number of local agencies for which Single
Audit data were available, (2) the percentage of local agencies in the
state that had any type of Single Audit finding, (3) the percentage of
local agencies that had material weakness findings,1 and (4) the
percentage of local agencies that had material noncompliance findings.2
States are ranked in decreasing order by the percentage of local agencies
in the state that had any type of Single Audit finding.
1 The American Institute of Certified Public Accountants (AICPA) standards
define "material weakness" as a reportable condition in which the design
or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that misstatements caused by
error or fraud in amounts that would be material in relation to the
financial statements being audited may occur and not be detected within a
timely period by employees in the normal course of performing their
assigned functions.
2 The Financial Audit Manual published by GAO and the President's Council
on Integrity and Efficiency ( GAO-01-765G ) defines "material
noncompliance" as reportable noncompliance in which a failure to comply
with laws or regulations results in misstatements that are material to the
financial statements.
Table 5: Single Audit Data for States Related to Findings among Local CSBG
Subgrantees Ranked by the Percentage of Agencies with Findings, 2002
Percentage
Number of Percentage of local
local of local agencies Percentage of local
agencies agencies with agencies with
reporting with Single material material
Single Audit weakness noncompliance
Rank State Audits findings findings findings
1 Puerto Rico 3 100 33 33
2 New Mexico 8 75 0 0
3 West Virginia 14 64 36 14
4 Missouri 19 58 5 0
5 Wyoming 9 56 44 0
6 Maryland 17 53 6 0
7 Connecticut 12 50 0 25
7 South Dakota 4 50 0 0
9 Louisiana 36 47 14 14
10 Arizona 11 45 9 0
10 Maine 11 45 9 0
12 New Jersey 20 45 5 5
13 Pennsylvania 43 44 9 7
14 Minnesota 36 42 6 6
15 Indiana 22 41 14 14
16 South Carolina 16 38 19 6
17 Texas 43 37 12 5
18 Alabama 19 37 26 0
18 Oklahoma 19 37 0 5
20 Nevada 11 36 0 0
21 Ohio 50 36 10 4
22 Arkansas 14 36 0 0
22 Florida 28 36 7 7
24 Georgia 24 33 4 4
24 Iowa 18 33 22 0
24 New Hampshire 6 33 17 0
24 North Dakota 6 33 0 0
28 California 56 32 2 4
29 Virginia 26 31 4 0
30 Michigan 27 30 4 4
31 Wisconsin 17 29 6 6
32 Tennessee 18 28 6 6
33 Illinois 33 27 3 3
34 Colorado 35 26 6 0
35 New York 47 26 4 0
36 North Carolina 29 24 14 7
37 Washington 25 24 4 4
38 Mississippi 17 24 0 0
38 Oregon 17 24 0 6
40 Nebraska 9 22 0 0
41 Montana 10 20 0 0
42 Massachusetts 23 17 4 0
43 Kentucky 21 14 0 0
43 Utah 7 14 0 0
45 Kansas 8 13 13 13
46 Alaska 1 0 0 0
46 Delaware 1 0 0 0
46 Hawaii 4 0 0 0
46 Idaho 8 0 0 0
46 Rhode Island 7 0 0 0
46 Vermont 4 0 0 0
N/A District of 0 N/A N/A N/A
Columbiaa
National totals 969 34 7 4
Source: GAO analysis of data from the Federal Audit Clearinghouse.
Note: Ties are noted with some states sharing ranks. Ranking was based on
percentages rounded to 1/100th, therefore the table may show other
apparent but not actual ties.
aSingle Audit data for the local agency in the District of Columbia were
not available for fiscal year 2002.
Table 6: Single Audit Data for States Related to Findings among Local CSBG
Subgrantees Ranked by the Percentage of Agencies with Findings, 2003
Percentage
Number of Percentage of local
local of local agencies Percentage of local
agencies agencies with agencies with
reporting with Single material material
Single Audit weakness noncompliance
Rank State Audits findings findings findings
1 Delaware 1 100 0 0
1 District of 1 100 100 100
Columbia
3 Puerto Rico 4 75 25 25
4 Wyoming 9 67 44 22
5 West Virginia 13 54 31 8
6 Maryland 15 53 13 0
7 New Hampshire 6 50 17 0
7 South Dakota 4 50 0 0
9 Texas 42 48 17 2
10 Mississippi 13 46 8 15
11 Nevada 11 45 9 18
12 Louisiana 36 44 17 14
12 Missouri 18 44 6 0
14 New Jersey 17 41 6 6
15 Pennsylvania 42 38 10 5
16 Virginia 27 37 7 4
17 Oklahoma 19 37 5 5
18 South Carolina 14 36 14 0
19 Alabama 18 33 11 0
19 Arkansas 15 33 7 0
19 New Mexico 6 33 0 0
19 North Dakota 6 33 0 0
23 Florida 28 32 11 4
24 Indiana 22 32 14 14
25 Minnesota 35 31 6 3
26 Ohio 48 31 10 4
27 Colorado 37 30 8 0
28 Iowa 17 29 18 6
29 Georgia 22 27 5 0
29 Maine 11 27 9 0
31 New York 50 26 4 2
32 Washington 27 26 4 0
33 California 58 26 2 0
34 Illinois 31 26 3 0
35 Arizona 8 25 0 0
35 Connecticut 12 25 8 8
35 Hawaii 4 25 25 25
35 Michigan 28 25 4 4
35 North Carolina 28 25 11 11
40 Nebraska 9 22 0 0
41 Montana 10 20 0 0
42 Kentucky 21 19 10 5
43 Wisconsin 17 18 6 0
44 Massachusetts 23 13 0 0
45 Kansas 8 13 0 0
45 Tennessee 16 13 0 0
47 Oregon 18 11 0 0
48 Alaska 1 0 0 0
48 Idaho 8 0 0 0
48 Rhode Island 8 0 0 0
48 Utah 8 0 0 0
48 Vermont 4 0 0 0
National totals 954 31 8 4
Source: GAO analysis of data from the Federal Audit Clearinghouse.
Note: Ties are noted with some states sharing ranks. Ranking was based on
percentages rounded to 1/100th, therefore the table may show other
apparent but not actual ties.
Appendix V: Comments from the Department of Health & Human Services
Appendix V: Comments from the Department of Health & Human Services
Appendix VI: A Appendix VI: GAO Contact and Staff Acknowledgments
GAO Contact
Marnie S. Shaul, (202) 512-7215, [email protected]
Staff Acknowledgments
In addition to the contact named above, Bryon Gordon (Assistant Director),
Danielle Giese (Analyst-in-Charge), Janice Ceperich, Tim Hall, and Andrew
Huddleston made significant contributions to this report. Curtis Groves,
Matt Michaels, and Luann Moy provided assistance with research methodology
and data analysis. Jim Rebbe provided legal counsel, and Jonathan McMurray
and Lise Levie assisted with report development.
Related GAO Products Related GAO Products
Community Services Block Grant Program: HHS Needs to Improve Monitoring of
State Grantees. GAO-06-373R . Washington, D.C.: February 7, 2006.
Head Start: Comprehensive Approach to Identifying and Addressing Risks
Could Help Prevent Grantee Financial Management Weaknesses. GAO-05-465T .
Washington, D.C.: April 5, 2005.
Head Start: Comprehensive Approach to Identifying and Addressing Risks
Could Help Prevent Grantee Financial Management Weaknesses. GAO-05-176 .
Washington, D.C: February 28, 2005.
Internal Control Management and Evaluation Tool. GAO-01-1008G .
Washington, D.C.: August 2001.
Standards for Internal Control in the Federal Government. GAO/AIMD-00-21
.3.1. Washington: D.C.: November 1999.
Grant Programs: Design Features Shape Flexibility, Accountability, and
Performance Information. GAO/GGD-98-137. Washington, D.C.: June 22, 1998.
(130512)
GAO's Mission
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
Obtaining Copies of GAO Reports and Testimony
The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts newly
released reports, testimony, and correspondence on its Web site. To have
GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone
The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061
To Report Fraud, Waste, and Abuse in Federal Programs
Contact:
Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: [email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470
Congressional Relations
Gloria Jarmon, Managing Director, [email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548
Public Affairs
Paul Anderson, Managing Director, [email protected] (202) 512-4800 U.S.
Government Accountability Office, 441 G Street NW, Room 7149 Washington,
D.C. 20548
www.gao.gov/cgi-bin/getrpt? GAO-06-627 .
To view the full product, including the scope
and methodology, click on the link above.
For more information, contact Marnie S. Shaul at (202) 512-7215 or
[email protected].
Highlights of GAO-06-627 , a report to congressional requesters
June 2006
COMMUNITY SERVICES BLOCK GRANT PROGRAM
HHS Should Improve Oversight by Focusing Monitoring and Assistance Efforts
on Areas of High Risk
The Community Services Block Grant (CSBG) provided over $600 million to
states in fiscal year 2005 to support over 1,000 local antipoverty
agencies. The Department of Health and Human Services's (HHS) Office of
Community Services (OCS) is primarily responsible for overseeing this
grant; states have oversight responsibility for local agencies.
At the request of Congress, GAO is providing information on (1) HHS's
compliance with federal laws and standards in overseeing states, (2) five
states' efforts to monitor local agencies, and (3) federal CSBG training
and technical assistance funds targeted to local agencies with problems
and the results of the assistance. States were selected based on varying
numbers of local agencies and grant amounts and recommendations from
associations, among other criteria.
What GAO Recommends
GAO recommends that the Assistant Secretary for Children and Families
direct OCS to conduct a risk-based assessment of state CSBG programs, have
policies and procedures to help ensure monitoring focuses on states with
the highest risk, issue guidance on state monitoring requirements and
training and technical assistance reporting, and implement a strategic
plan to guide its training and technical assistance efforts.
The agency agreed with our recommendations and has made plans to address
them.
In a February 2006 letter (GAO-06-373R), GAO notified OCS that it lacked
effective policies, procedures, and controls to help ensure that it fully
met legal requirements for monitoring states and internal control
standards. At that time, GAO also offered recommendations for
improvements. OCS has responded that it intends to take actions to address
each of those recommendations. In addition, GAO found that OCS did not
routinely collect key information, such as results of state monitoring
reports, or systematically use available information, such as state
performance data, to assess the states' CSBG management risks and target
monitoring efforts to states with the highest risk.
All five states we visited conducted on-site monitoring of local agencies
with varying frequency and performed additional oversight efforts. Two
state offices visited each local agency at least once between 2003 and
2005, while the other three states visited local agencies less frequently.
State officials we visited had different views on what they must do to
meet the statutory requirement to visit local agencies at least once
during each 3-year period, and OCS has not issued guidance interpreting
this requirement. Officials in all five states also provided oversight in
addition to monitoring through such activities as reviewing reports and
coordinating with other federal and state programs.
OCS targeted some training and technical assistance funds to local
grantees with financial or management problems, but information on the
results of this assistance is limited. In fiscal years 2002 through 2005,
OCS designated between $666,000 and $1 million of its annual $10 million
training and technical assistance funds to local agencies with problems,
but had no process for strategically allocating these funds to areas of
greatest need. In addition, the final reports on awarded grants indicated
that some local agencies had improved, but the reports provided no
information on the outcomes of assistance for nearly half of the 46 local
agencies that GAO identified as being served. See figure below.
Results of Assistance to 46 Local Agencies as Reported by Grantees, Fiscal
Years 2002 through 2005
*** End of document. ***