Drug-Free Communities Support Program: Stronger Internal Controls
and Other Actions Needed to Better Manage the Grant-Making	 
Process (31-JUL-08, GAO-08-57). 				 
                                                                 
Twenty-five percent of American students ages 13-17 reported	 
using illicit drugs in 2007. The Drug-Free Communities Support	 
Program provides grants to community coalitions involved in	 
reducing youth substance abuse. The Office of National Drug	 
Control Policy (ONDCP) administers the program. ONDCP selected	 
the Substance Abuse and Mental Health Services Administration	 
(SAMHSA) to operate the grant program in fiscal year 2005. In	 
2005, ONDCP did not award grants to some coalitions who had	 
previously received grant funds (renewal grantees). GAO was asked
to assess (1) the extent to which ONDCP and SAMHSA administered  
grant-related activities for fiscal years 2005 and 2006 	 
consistent with federal internal control standards, statutory	 
requirements, and other guidance and (2) the steps ONDCP has	 
taken since 2006 regarding its administration of grant-related	 
activities. GAO analyzed and compared program documents and grant
activities to established guidance, such as federal internal	 
control standards and statutory requirements, and interviewed key
program management officials.					 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-57						        
    ACCNO:   A83232						        
  TITLE:     Drug-Free Communities Support Program: Stronger Internal 
Controls and Other Actions Needed to Better Manage the		 
Grant-Making Process						 
     DATE:   07/31/2008 
  SUBJECT:   Community development programs			 
	     Documentation					 
	     Drug abuse 					 
	     Drug abuse prevention				 
	     Eligibility criteria				 
	     Eligibility determinations 			 
	     Federal grants					 
	     Grant administration				 
	     Grant monitoring					 
	     Grants to local governments			 
	     Interagency relations				 
	     Internal controls					 
	     Locally administered programs			 
	     Performance measures				 
	     Program evaluation 				 
	     Program management 				 
	     Standards						 
	     Substance abuse					 
	     Drug-Free Communities Support Program		 

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GAO-08-57

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Report to Congressional Requesters: 

United States Government Accountability Office: 
GAO: 

July 2008: 

Drug-Free Communities Support Program: 

Stronger Internal Controls and Other Actions Needed to Better Manage 
the Grant-Making Process: 

GAO-08-57: 

GAO Highlights: 

Highlights of GAO-08-57, a report to congressional requesters. 

Why GAO Did This Study: 

Twenty-five percent of American students ages 13-17 reported using 
illicit drugs in 2007. The Drug-Free Communities Support Program 
provides grants to community coalitions involved in reducing youth 
substance abuse. The Office of National Drug Control Policy (ONDCP) 
administers the program. ONDCP selected the Substance Abuse and Mental 
Health Services Administration (SAMHSA) to operate the grant program in 
fiscal year 2005. In 2005, ONDCP did not award grants to some 
coalitions who had previously received grant funds (renewal grantees). 
GAO was asked to assess (1) the extent to which ONDCP and SAMHSA 
administered grant-related activities for fiscal years 2005 and 2006 
consistent with federal internal control standards, statutory 
requirements, and other guidance and (2) the steps ONDCP has taken 
since 2006 regarding its administration of grant-related activities. 
GAO analyzed and compared program documents and grant activities to 
established guidance, such as federal internal control standards and 
statutory requirements, and interviewed key program management 
officials. 

What GAO Found: 

In fiscal years 2005 and 2006, ONDCP and SAMHSA did not always adhere 
to applicable federal internal control standards, statutory 
requirements, and other guidance during the grant-making process. 
Standards for internal control in the federal government call for 
agencies to conduct ongoing monitoring of a programï¿½s performance, but 
ONDCP did not conduct such monitoring of SAMHSA or the program overall. 
Thus, ONDCP increased its risk of not providing reasonable assurance 
that SAMHSA conducted grant activities, such as eligibility screening. 
Internal control standards also require that agencies maintain 
documentation that grant applicants met eligibility requirements each 
fiscal year. While SAMHSA officials said that they screened all renewal 
grantees for eligibility in 2005 and ONDCP officials said they screened 
all initial grantees in 2006, documentation indicating that such 
screening had occurred was missing from 47 of the 66 grantee files GAO 
reviewed. ONDCP also lacked a process to ensure that all renewal 
applicants met statutory eligibility requirements. For example, ONDCP 
used a separate screening process in fiscal year 2005 that included a 
criterion that grantees limit funding for direct services, such as 
enrolling individuals in a drug prevention program. Only renewal grant 
applicants that met this or one of two other criteria underwent further 
screening for statutory eligibility. As a result, ONDCP funded about 86 
percent of renewal grantees in 2005 without ensuring that they met the 
statutory eligibility criteria. Leading practices for collaborating 
agencies call for strategies to ensure common outcomes. However, the 
inter-agency agreement between ONDCP and SAMHSA did not fully define 
roles and responsibilities and lacked specific guidance to SAMHSA on 
eligibility screening. As a result, confusion occurred over issues, 
such as the eligibility criteria to apply, hampering the two agencies 
in their efforts to effectively manage the grant-making process. 

Since 2006, ONDCP has addressed some of the issues described above, by 
(1) clarifying its role for the program in its 2007 agreement with 
SAMHSA, (2) establishing management groups to address monitoring 
issues, and (3) eliminating its use of the direct services eligibility 
criterion. However, some internal control and other challenges remain. 
For example, ONDCP has not yet put a mechanism in place to ensure that 
documentation confirming eligibility is maintained in the grant files. 
ONDCP also has not documented its approach to overseeing SAMHSA and the 
program. Without defined oversight activities for ensuring completion 
of the work, ONDCP lacks reasonable assurance that required tasks are 
being performed in accordance with managementï¿½s directives. Also, roles 
and responsibilities for key elements of grant administration remain 
largely undefined in that the agencies have not clarified certain 
services SAMHSA is to provide related to awarding grants or the role of 
the program Administrator. Without defining these roles, confusion on 
the steps to follow in managing the program could continue to occur. 
Finally, as in 2006, ONDCP officials told GAO that they did not screen 
renewal grant applicants for eligibility in 2007 because the screening 
that applicants undergo when they first receive a grant is sufficient. 

What GAO Recommends: 

GAO recommends that ONDCP strengthen internal controls, ensure that 
funded grant applicants satisfy statutory eligibility criteria, and 
fully define roles and responsibilities. In commenting on a draft of 
this report, ONDCP described actions taken to address these 
recommendations. 

To view the full product, including the scope and methodology, click on 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-57]. For more 
information, contact Robert Goldenkoff at (202) 512-6806 or 
[email protected]. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Administration of Drug-Free Communities Grant-Making Process Contained 
a Number of Implementation Weaknesses: 

ONDCP Has Taken Steps to Better Manage the Grant-Making Process, but 
These Efforts Can Be Strengthened: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Scope and Methodology: 

Appendix II: Timeline of Key Events for Drug-Free Communities Support 
Program, Fiscal Year 2005: 

Appendix III: Comments from the Office of National Drug Control Policy: 

Appendix IV: Comments from the Department of Health and Human Services: 

Appendix V: GAO Contact and Staff Acknowledgments: 

Table: 

Table 1: ONDCP Used Different Screening Process for Initial and Renewal 
Grant Applicants in Fiscal Year 2005: 

Figures: 

Figure 1: Organizational Overview of Drug-Free Communities Support 
Program: 

Figure 2: Summary of Statutory Eligibility Criteria of the Drug-Free 
Communities Support Program: 

Figure 3: Screening Process ONDCP Reportedly Used in Fiscal Year 2005 
for the Drug-Free Communities Support Program Differed from Typical 
Screening Process for Federal Grant Programs: 

Figure 4: ONDCP Reported that All Funded Initial Grant Applicants Met 
Statutory Eligibility Criteria in Fiscal Year 2005, but Most Funded 
Renewal Grant Applicants Were Not Screened: 

Figure 5: Timeline of Key Events for Drug-Free Communities Support 
Program, Fiscal Year 2005: 

Abbreviations: 

DOJ: Department of Justice: 

FMFIA: Federal Managers' Financial Integrity Act of 1982: 

HHS: Department of Health and Human Services: 

OMB: Office of Management and Budget: 

ONDCP: Office of National Drug Control Policy: 

SAMHSA: Substance Abuse and Mental Health Services Administration: 

[End of section] 

United States Government Accountability Office:
Washington, DC 20548: 

July 31, 2008: 

The Honorable Joseph R. Biden, Jr. 
Chairman: 
The Honorable Charles E. Grassley: 
Co-Chairman: 
Caucus on International Narcotics Control: 
United States Senate: 

The Honorable Elijah E. Cummings: 
The Honorable Sander M. Levin: 
The Honorable Mark E. Souder: 
House of Representatives: 

Twenty-five percent of American students between the ages of 13 and 17 
reported using illicit drugs in 2007, according to a government survey. 
[Footnote 1] To address this problem, various efforts to curb substance 
abuse among youth are underway in the United States. One such effort is 
the Drug-Free Communities Support Program, which was established by the 
Drug-Free Communities Act of 1997 and is administered by the Office of 
National Drug Control Policy (ONDCP) within the Executive Office of the 
President.[Footnote 2] ONDCP is led by a Director responsible for 
establishing a program to support communities in preventing and 
treating substance abuse among youth. The Director appoints an 
Administrator who is statutorily responsible for carrying out the 
program. The Drug-Free Communities Support Program was designed to help 
communities develop and implement comprehensive, long-term plans and 
programs to prevent and treat substance abuse. Under the Drug-Free 
Communities Support Program, ONDCP provides federal grants to 
"coalitions" that have established sustainable and accountable anti- 
drug efforts involving every major sector of a community. These 
coalitions are broad-based groups consisting of representatives of 
youth, parents, businesses, the media, law enforcement, religious or 
other civic groups, health care professionals, and other organizations 
involved in reducing substance abuse in their communities, especially 
among the young. 

The Drug-Free Communities Support Program supports community coalitions 
in their efforts to address and reduce substance abuse among youth by 
providing federal grants in the form of initial and renewal grants. 
[Footnote 3] These initial and renewal grants are available to eligible 
coalitions in amounts up to $125,000 for a fiscal year.[Footnote 4] By 
statute, eligible coalitions may receive Drug-Free Communities Support 
Program grants for two 5-year cycles (generally, an initial grant and 
four renewal grants per 5-year cycle).[Footnote 5] According to ONDCP, 
a coalition, after award of an initial grant, will continue to receive 
funds during the 5-year cycle if ONDCP determines that the coalition 
makes satisfactory progress in its efforts to reduce substance abuse 
among youth and the coalition complies with the conditions of their 
award, and remains eligible for the grant. For example, the coalition 
must have as its principal mission the reduction of substance abuse in 
a comprehensive and long-term manner, with a primary focus on youth in 
the community. Over the program's 10-year existence, approximately $550 
million has been appropriated for grant awards. 

The Drug-Free Communities Support Program has undergone administrative 
changes in recent years. Since the program's inception in 1997, ONDCP 
has delegated authority for the execution of certain grant management 
activities to other agencies, as authorized by statute.[Footnote 6] 
From fiscal years 1998 to 2004, ONDCP managed the Drug-Free Communities 
Support Program in conjunction with the Office of Juvenile Justice and 
Delinquency Prevention, an office within the Department of Justice 
(DOJ). In fiscal year 2004, as a result of a recommendation from the 
program's Advisory Commission[Footnote 7] aimed at determining the 
appropriate agency to execute certain grant management activities of 
the program,[Footnote 8] ONDCP selected the Substance Abuse and Mental 
Health Services Administration (SAMHSA), a component of the Department 
of Health and Human Services (HHS), to help manage the program. Fiscal 
year 2005 was the first year that the grant program was operated by 
ONDCP and SAMHSA under an inter-agency agreement. During the fiscal 
year 2005 process, some renewal grant applicants were denied a grant 
within their 5-year cycle by ONDCP, which raised questions about how 
the grant program was administered and how the grantee application 
review process was conducted during that fiscal year. 

You requested that we review the grant-related activities, including 
how ONDCP and SAMHSA screened applicants to determine eligibility and 
communicated with coalitions about the grant program. This report 
addresses: (1) the extent to which ONDCP and SAMHSA administered grant- 
related activities for fiscal years 2005 and 2006 in accordance with 
federal internal control standards, statutory requirements, and leading 
practices for collaborating agencies and (2) the steps ONDCP has taken 
since fiscal year 2006, if any, concerning its administration of grant- 
related activities. 

To determine the extent to which ONDCP and SAMHSA conducted its grant- 
related activities, including eligibility screening for the Drug-Free 
Communities Support Program in accordance with Internal Control 
Standards for the Federal Government,[Footnote 9] statutory 
requirements, and leading practices for collaborating agencies, 
[Footnote 10] we reviewed available documents such as grant 
announcements and inter-agency agreements between ONDCP and SAMHSA and 
compared them to these criteria. Further, to determine whether ONDCP 
and SAMHSA had documented eligibility screening, we reviewed systematic 
random samples of available grant applications for fiscal years 2005 
and 2006.[Footnote 11] Because the 126 applications we reviewed (of 
which 66 were awarded grants) were not representative of all of the 
approximately 1,690 applications, we cannot generalize the results to 
the larger populations of fiscal year 2005 (about 990 applications) or 
fiscal year 2006 applicants (over 700 applications). Even so, our 
review of these applications provided us with perspective on how ONDCP 
and SAMHSA handled these applications. Additionally, because accurate 
counts of the total numbers of applications in fiscal years 2005 and 
2006 were not available, we provide approximate numbers of applications 
to illustrate orders of magnitude. We compared ONDCP's and SAMHSA's 
grant-related activities in fiscal years 2005 through 2007 with 
criteria in GAO's Standards for Internal Control in the Federal 
Government. These standards, issued pursuant to the requirements of the 
Federal Managers' Financial Integrity Act of 1982 (FMFIA),[Footnote 12] 
provide the overall framework for establishing and maintaining internal 
control in the federal government. Also pursuant to FMFIA, the Office 
of Management and Budget (OMB) issued Circular A-123, revised December 
21, 2004, to provide the specific requirements for assessing the 
reporting on internal controls. Internal control standards and the 
definition of internal control in OMB Circular A-123 are based on GAO's 
Standards for Internal Control in the Federal Government. We also 
considered our prior work on results-oriented government related to 
leading practices for federal collaboration.[Footnote 13] In addition, 
we compared ONDCP's and SAMHSA's grant-related activities in fiscal 
years 2005 through 2007 with statutory criteria included in the Drug- 
Free Communities Act of 1997;[Footnote 14] the Drug-Free Communities 
Support Program Reauthorization Act of 2001;[Footnote 15] and the 
Office of National Drug Control Policy Reauthorization Act of 2006. 
[Footnote 16] 

To identify the steps ONDCP has taken since fiscal year 2006, if any, 
concerning its administration of grant-related activities, we reviewed 
the documents and grant applications described above. We also 
interviewed key staff at ONDCP and SAMHSA about how they conducted and 
documented grant-related activities since 2006. While our discussions 
with agency officials from ONDCP and SAMHSA focused on the agencies' 
review methods and funding decisions implemented in fiscal years 2005 
and 2006, we also obtained information for fiscal year 2007 wherever 
possible to provide the most current information on the program. We did 
not review the fiscal year 2008 grant-making process because the 
process was underway during our review and the results of the process 
were not yet available. 

We conducted this performance audit from July 2006 through July 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. Additional details on our 
scope and methodology are contained in appendix I. 

Results in Brief: 

In administering the Drug-Free Communities Support Program in fiscal 
years 2005 and 2006, the grant award process of ONDCP and SAMHSA did 
not always adhere to key internal control standards for the federal 
government essential for proper stewardship of public resources, the 
statutory requirements governing the program,[Footnote 17] and leading 
practices for collaboration and coordination between agencies to ensure 
only eligible coalitions were awarded grants.[Footnote 18] Standards 
for internal control in the federal government call for on-going 
monitoring of a program's performance, and transactions to be clearly 
documented and for the documentation to be readily available for 
examination, among other actions. Further, the statutory requirements 
governing the Drug-Free Communities Support Program require a coalition 
to meet each of the statutory eligibility criteria, each fiscal year, 
to be eligible to receive an initial or renewal grant. Also, as we 
reported in October 2005, collaborating agencies need to establish 
strategies that work in concert with those of their partners, which can 
help in aligning partner agencies' activities and core processes and 
resources.[Footnote 19] However, for fiscal years 2005 and 2006, we 
identified weaknesses in the following areas: 

* ONDCP and SAMHSA signed inter-agency agreements that did not provide 
guidance for monitoring and overseeing the program. Also, ONDCP 
officials acknowledged that they did not conduct ongoing monitoring and 
oversee the grant program because ONDCP expected SAMHSA to carry out 
its duties as specified in the inter-agency agreement and the funding 
announcement. Because ONDCP did not engage in ongoing monitoring, the 
agency increased its risk that it cannot provide reasonable assurance 
that SAMHSA conducted grant activities according to ONDCP's 
expectations. Additionally, we found that 47 of 66 (71 percent) of the 
files we reviewed for initial and renewal grant applicants that were 
awarded funding lacked documentation that showed whether the statutory 
eligibility criteria had been met or assessed. Furthermore, the 
screening sheet that SAMHSA and ONDCP used in fiscal years 2005 and 
2006 to assess grant applicants' eligibility did not include all of the 
criteria the statute requires be considered in assessing an applicants' 
eligibility. Nor did the files with these screening sheets contain 
other documentation to demonstrate that applications were completely 
assessed for statutory eligibility. Without documentation of a process 
that considers all of the statutory requirements, ONDCP increased its 
risk that all grant applicants awarded funding were not statutorily 
eligible to receive the grant funds. 

* ONDCP also lacked a process to screen renewal grant applicants to 
ensure ongoing statutory eligibility. As a result, ONDCP funded the 
majority (about 86 percent) of renewal grant applicants in fiscal year 
2005 and all of these applicants for fiscal year 2006 without ONDCP or 
SAMHSA ensuring that they satisfied the statutory eligibility criteria. 
For fiscal year 2005, ONDCP used a separate screening process 
consisting of three criteria[Footnote 20]--including one that 
applicants limit the amount of grant funds used to provide direct 
services to individuals[Footnote 21]--to determine whether grant 
applicants would be screened for statutory eligibility. ONDCP officials 
told us that they instituted this screening process because late in 
fiscal year 2005 SAMHSA did not produce evidence that all applications 
had been screened for statutory eligibility and to ensure that funds 
were awarded only to eligible coalitions, as required by statute. Under 
ONDCP's screening process, renewal grant applicants were subjected to 
statutory eligibility screening when they met one or more of the three 
criteria. For fiscal year 2006, ONDCP officials told us that they did 
not require renewal grant applicants to undergo any process to 
determine whether the applicants satisfied the statutory eligibility 
criteria because ONDCP believed that an eligibility screen for a 
previous year was also sufficient for the current fiscal year. Without 
screening renewal grant applicants for statutory eligibility for fiscal 
years 2005 and 2006, ONDCP increased its risk that the coalitions it 
awarded funding were not statutorily eligible to receive the grant 
funds. 

* ONDCP and SAMHSA did not follow leading practices for collaboration, 
such as agreeing on roles and responsibilities and establishing 
compatible policies, procedures, and other means to operate across 
agency boundaries. The inter-agency agreements signed by ONDCP and 
SAMHSA did not fully define all roles and responsibilities for managing 
the grant process, such as the role of SAMHSA in screening renewal 
grant applicants for eligibility. As a result, in fiscal year 2005, 
confusion occurred over the extent to which eligibility screening had 
taken place, hampering ONDCP and SAMHSA in their efforts to effectively 
manage the grant-making process. 

Since fiscal year 2006, ONDCP has addressed some of the issues 
described above by establishing senior-level management groups to 
address collaboration and monitoring issues, eliminating its use of the 
direct services eligibility criterion in response to reauthorizing 
legislation, and clarifying grant program roles and responsibilities. 
However, weaknesses in internal controls and other challenges remain. 
For example: 

* ONDCP has not developed or documented its approach to monitoring 
SAMHSA's administration of the grant program and overseeing the grant 
program as a whole as required by internal control standards. Without 
defined oversight activities for ensuring successful completion of the 
work, ONDCP lacks reasonable assurance that required tasks are being 
performed in accordance with its directives. Further, ONDCP has not yet 
taken steps to ensure that key grant file documentation is maintained 
in the grant files. Nor has ONDCP amended the eligibility screening 
sheets for fiscal year 2007 to better capture the statutory eligibility 
criteria for use in screening initial grant applicants. 

* Various challenges in defining roles and responsibilities for program 
management have not been fully addressed. Specifically, the two 
agencies have yet to develop policies and procedures to clarify certain 
services SAMHSA will provide related to awarding grants, as required 
under the inter-agency agreement. Additionally, while the agreement 
designates the Director of ONDCP as responsible for making final 
funding decisions, the agreement does not specifically define the role 
of the Administrator for the Drug-Free Communities Support Program. 
Because the Administrator for the grant program, by statute, is 
responsible for generally carrying out those responsibilities, 
including making decisions related to the statutory eligibility 
criteria, it is particularly important that the agencies agree upon and 
document what this leadership role entails. Without taking action to 
fully define these roles and responsibilities, confusion on the steps 
to follow in managing the program could continue to occur. 

* As in fiscal year 2006, ONDCP officials told us that they did not 
screen renewal grant applicants for statutory eligibility in fiscal 
year 2007, nor did they require grantees to submit any supporting 
documentation to show that the statutory eligibility criteria had been 
met. Without screening for statutory eligibility, ONDCP increased its 
risk that the renewal grant applicants it awarded funding to in fiscal 
year 2007 were not statutorily eligible for such funding. 

To improve the internal controls and management of the Drug-Free 
Communities Support Program, we are recommending that the Director of 
ONDCP (1) develop and document its approach to monitoring and 
overseeing SAMHSA and the program as a whole, (2) ensure that the 
coalitions receiving an initial grant or a renewal grant satisfy all of 
the statutory eligibility criteria and the basis for grant decisions is 
fully documented, and (3) fully define the roles and responsibilities 
of SAMHSA and ONDCP, including those of the Drug-Free Communities 
Support Program Administrator, in operating the program. 

We provided a draft of this report to ONDCP, HHS, and DOJ for review. 
The Director of ONDCP described actions underway or planned to address 
the recommendations and raised some issues with our presentation of 
certain data, such as difficulties in using ONDCP data to accurately 
identify the number of applications received by the program in fiscal 
years 2005 and 2006. In its comments, SAMHSA described strategies 
underway to improve internal controls and management of the Drug-Free 
Communities Support Program within SAMHSA and in their partnership with 
ONDCP. DOJ provided technical comments. 

Background: 

The Drug-Free Communities Act of 1997 established the Drug-Free 
Communities Support Program.[Footnote 22] The program's two major goals 
are to: (1) establish and strengthen collaboration among communities, 
private non-profit agencies, and federal, state, local, and tribal 
governments to support the efforts of community coalitions to prevent 
and reduce substance abuse among youth; and (2) reduce substance abuse 
over time among youth and adults by addressing the factors in a 
community that increase the risk of substance abuse and promoting the 
factors that minimize the risk of substance abuse. As authorized by 
statute, the Director of ONDCP may employ any necessary staff and enter 
into contracts or agreements with national drug control agencies, 
including inter-agency agreements to delegate authority for the 
execution of grants and for such other activities necessary to carry 
out the program.[Footnote 23] 

Since the program's inception in 1997, ONDCP has delegated certain 
grant administration activities to other agencies through inter-agency 
agreements. These inter-agency agreements are drafted each fiscal year, 
reflecting the necessary changes and lessons learned from the previous 
year, and are put into effect once they are agreed upon and signed by 
both parties. In fiscal year 2005, ONDCP administered the program with 
SAMHSA. This inter-agency agreement was the vehicle through which, 
consistent with the terms of the statutory requirements, ONDCP sought 
to ensure the proper management of the program. This inter-agency 
agreement provided ONDCP with an opportunity to set forth the processes 
and procedures for the award and management of grants. 

An Administrator, appointed by the Director of ONDCP, is responsible 
for carrying out a program to support communities in the development 
and implementation of plans and programs to prevent and treat substance 
abuse among youth. The Administrator is responsible for carrying out 
the program, including setting forth various standards related to the 
statutory eligibility requirements.[Footnote 24] 

From fiscal years 1998 to 2004, the grant program was administered by 
the Office of Juvenile Justice and Delinquency Prevention Programs, 
organized under the Department of Justice and headed by the Office of 
the Assistant Attorney General. From fiscal year 2005 to the present, 
the grant program has been administered by SAMHSA, organized under the 
Department of Health and Human Services and headed by its Secretary. 
See figure 1 for an organizational overview of the program, including 
the Office of Juvenile Justice and Delinquency Prevention Program's 
past involvement. 

Figure 1: Organizational Overview of Drug-Free Communities Support 
Program: 

[See PDF for image] 

This figure contains a timeline, as well as an organizational overview 
of Drug-Free Communities Support Program, as follows: 

Executive Branch: 
* Department of Justice; 
- OJP; 
- OJJDP (Drug Free Communities partner 1998-2004); 
* ONDCP (Drug Free Communities Administrator); 
- Drug-Free Communities Support Program; 
- Program Advisory Commission (interacts with ONDCP); 
* Department of Health and Human Services; 
- SAMSHA (Drug Free Communities partner 2005-present); 
- Division of Grants Management; 
- Center for Substance Abuse Prevention. 

OJP: Office of Justice Programs; 
OJJDP: Office of Juvenile Justice and Delinquency Prevention; 
ONDCP: Office of National Drug Control Policy; 
SAMHSA: Substance Abuse and Mental Health Services Administration. 

Source: GAO analysis of agencies' data. 

[End of figure] 

General Overview of the Drug-Free Communities Support Program Grant 
Management and Funding Process: 

Under the Drug-Free Communities Support Program, grantees receive 
federal funds each fiscal year[Footnote 25] and are required to match 
federal grant funds with non-federal funds including, at the discretion 
of the Administrator, in-kind contributions for that fiscal year. 
[Footnote 26] Grantees may receive funding on a fiscal year basis in 
two 5-year cycles (although grantees must reapply each fiscal year), 
for a total of up to 10 years of funding. There are two classes of 
applicants that a coalition may fall under when applying for funding; 
each class of applicant has its own set of requirements or 
characteristics, as shown below. 

* Initial grant applicants are those that are (1) either applying for 
their first grant, (2) have received 5 years of funding and are 
applying for a sixth year, or (3) have had a lapse in their funding in 
the previous fiscal year. 

* Renewal grant applicants have received an award in the previous year 
and are applying each fiscal year for funding for years 2 through 5 or 
years 7 through 10. Renewal grant applicants generally do not compete 
with other applicants for funds.[Footnote 27] 

Each fiscal year, initial grant applicants submit their applications 
for review. Those applications deemed eligible are then forwarded on 
for peer review. Peer reviewers are external experts who examine 
applications and score them on the basis of several areas, such as the 
extent to which a coalition demonstrates effective strategic planning 
and implementation. These scores are used to assess the applicant and 
range from 0 (lowest score) to 100 (highest score). ONDCP then 
determines which coalitions will receive funding, generally awarding 
grants from the highest peer review score down until all of the funding 
has been used.[Footnote 28] 

Each fiscal year, renewal grant applicants submit abbreviated 
applications, which include a budget and work-plan, to SAMHSA. SAMHSA 
reviews these applications to gather required information on the grant 
applicant's progress. Then, ONDCP determines whether to continue 
federal grant support.[Footnote 29] 

Administration of Drug-Free Communities Grant-Making Process Contained 
a Number of Implementation Weaknesses: 

The 2005 and 2006 grant award process of ONDCP and SAMHSA did not 
adhere to standards for internal control in the federal government, 
statutory requirements, and leading practices for collaborating 
agencies. The process did not adhere to certain federal internal 
control standards because ONDCP lacked mechanisms for monitoring SAMHSA 
and ensuring that application reviews were fully documented. 
Furthermore, ONDCP instituted procedures for screening grant 
applications that did not ensure that all renewal grantees met 
statutory eligibility requirements. Finally, ONDCP and SAMHSA 
experienced collaboration challenges, such as a lack of fully defined 
roles and responsibilities and procedures for conducting eligibility 
screening, which hampered their management of the grant-making process. 

The Grant Process of ONDCP and SAMHSA Did Not Adhere to Certain 
Internal Control Standards Related to Monitoring and Documentation: 

Standards for internal control in the federal government are essential 
for proper stewardship of public resources because they help ensure 
accountability and minimize operational problems. Having internal 
controls that operate as intended related to monitoring and oversight 
could provide assurance that SAMHSA is conducting its activities in 
accordance with the inter-agency agreement signed by both agencies. In 
addition, in managing the Drug-Free Communities Support Program, 
adequate internal controls, such as ensuring proper documentation of 
eligibility screening activities, are key to providing accountability 
in the process. 

According to internal control standards, management should provide 
ongoing monitoring of performance. Neither the inter-agency agreement 
between ONDCP and SAMHSA nor other documentation associated with the 
grant-making process defined how ONDCP would oversee SAMHSA in 
conducting its monitoring responsibilities. In July 2006, we reported 
that in using inter-agency agreements, the issuing agency, among other 
things, should clearly define roles and responsibilities for conducting 
monitoring and oversight.[Footnote 30] However, the inter-agency 
agreement for fiscal year 2005 did not articulate such specific roles 
and responsibilities for each of the two agencies. The statute states 
that ONDCP may enter into inter-agency agreements with other national 
drug control agencies to delegate authority for the execution of grants 
and for such other activities necessary to carry out the program. As 
reflected in the legislative history of the Drug-Free Communities Act 
of 1997, the ONDCP Administrator of the program would use the terms of 
the inter-agency agreement to oversee the program and ensure that it is 
operated and grants are awarded in accordance with the policies and 
criteria established for the program. [Footnote 31] However, our review 
of the inter-agency agreement found no references about how ONDCP would 
monitor SAMHSA in administering the grant-making process or a 
description of roles related to these activities. Moreover, we found 
that no specific policies and procedures for monitoring the program 
were established before the grant process had begun. 

Furthermore, ONDCP officials told us that while the inter-agency 
agreement was intended to serve as the document for the monitoring, 
oversight, and management of the program, they acknowledged that this 
was not the case in fiscal year 2005, though officials told us that 
staff from both agencies met periodically to review the grant program 
process. ONDCP officials acknowledged, however, that they did not 
regularly monitor and oversee the grant program because ONDCP expected 
SAMHSA to carry out its duties as specified in the inter-agency 
agreement and the funding announcement. Because ONDCP did not conduct 
ongoing monitoring, the agency increased its risk that it could not 
provide reasonable assurance that SAMHSA was conducting grant 
activities, such as eligibility screening, according to ONDCP's 
expectations. 

Standards for Internal Control in the Federal Government call for 
transactions and other significant events to be clearly documented and 
all documentation to be properly managed and maintained.[Footnote 32] 
However, we found that such documentation was not consistently 
maintained for reviews of grant applications for statutory eligibility. 
Specifically, ONDCP and SAMHSA did not provide us documentation on 
whether fiscal year 2005 renewal grant applicants were screened for 
statutory eligibility, as we requested. As a result, we asked 10 SAMHSA 
project officers whether they conducted the screening, of which 5 
reported that they screened renewal grant applicants for eligibility in 
fiscal year 2005.[Footnote 33] We also reviewed 66 grant application 
files for funded initial and renewal grantees, that covered fiscal 
years 2005 and 2006, to determine whether the files contained 
documentary evidence that screening for statutory eligibility had 
occurred. Documentary evidence was missing from 47 of the 66 grant 
files (71 percent) we reviewed. Specifically, for fiscal year 2005, 
files for 21 funded renewal grant applicants and 1 funded initial 
applicant contained no documentation. For fiscal year 2006, 25 files 
for funded initial grant applicants were missing documentary evidence 
that eligibility screening took place.[Footnote 34] While our review 
cannot be generalized to all grant files for fiscal years 2005 and 
2006, the lack of documentation in most of the grant files we reviewed 
indicates increased risk that neither ONDCP nor SAMHSA could provide 
reasonable assurance that all funded grant applicants were screened for 
eligibility. 

In addition, the screening sheets used by agency officials to determine 
whether an applicant was an eligible coalition did not include all of 
the statutory eligibility criteria (see fig. 2 for our summary of the 
statutory eligibility criteria).[Footnote 35] 

Figure 2: Summary of Statutory Eligibility Criteria of the Drug-Free 
Communities Support Program: 

[See PDF for image] 

Under 21 U.S.C. ï¿½ 1532(a), to be eligible to receive an initial grant 
or a renewal grant, a coalition must meet each of the following 
criteria: 

Application: 
The coalition shall submit an application in writing which is subject 
to the review of the Administrator. 

Major Sector Involvement: 
The coalition shall consist of 1 or more representatives from each of 
the following categories: Youth; Parents; Businesses; The media; 
Schools; Organizations serving youth; Law enforcement; Religious or 
fraternal organizations; Civic and volunteer groups; Health care 
professionals; State, local or tribal governmental agencies with 
expertise in the field of substance abuse; and other organizations 
involved in reducing substance abuse. An individual who is a member of 
the coalition may serve on the coalition as a representative of not 
more than 1 category as listed above. 

Commitment: 
The coalition shall demonstrate, to the satisfaction of the 
Administrator, that the representatives of the coalition have worked 
together on substance abuse reduction initiatives for a period of not 
less than 6 months, acting through entities such as task forces, 
subcommittees, or community boards. The coalition shall also 
demonstrate, to the satisfaction of the Administrator, substantial 
participation from volunteer leaders in the community involved 
(especially in cooperation with individuals involved with youth such as 
parents, teachers, coaches, youth workers, and members of the clergy). 

Mission and Strategies: 
The coalition shall, with respect to the community involved, have as 
its principal mission the reduction of substance abuse in a 
comprehensive and long-term manner, with a primary focus on youth in 
the community.The coalition shall describe and document the nature and 
extent of the substance abuse problem in the community.The coalition 
shall provide a description of substance abuse prevention and treatment 
and activities in existence at the time of the grant application; and 
identify substance abuse programs and service gaps in the community; 
develop a strategic plan to reduce substance abuse among youth in a 
comprehensive and long-term fashion; and work to develop consensus 
regarding the priorities of the community to combat substance abuse 
among youth. 

Sustainability: 
The coalition shall demonstrate that the coalition is an ongoing 
concern by demonstrating that the coalition is a nonprofit 
organization, or an entity that the Administrator determines to be 
appropriate, or part of, or is associated with, an established legal 
entity. The coalition shall demonstrate that the coalition is an 
ongoing concern by demonstrating that the coalition receives financial 
support from non-Federal sources.The coalition shall demonstrate that 
the coalition is an ongoing concern by demonstrating that the coalition 
has a strategy to solicit substantial financial support from non-
Federal sources to ensure that the coalition and the programs operated 
by the coalition are self-sustaining. 

Accountability: 
The coalition shall establish a system to measure and report outcomes 
consistent with common indicators and evaluation protocols established 
and approved by the Administrator.For an initial grant, the coalition 
shall conduct an initial benchmark survey of drug use among youth (or 
use local surveys or performance measures available or accessible in 
the community at the time of the grant application). The coalition 
shall conduct biennial surveys (or incorporate local surveys in 
existence at the time of the evaluation) to measure the progress and 
effectiveness of the coalition.The coalition shall provide assurances 
that the entity conducting these evaluations or from which the 
coalition receives information, has experience in gathering data 
related to substance abuse among youth or in evaluating the 
effectiveness of community anti-drug coalitions. 

Additional Criteria[A]: 
The Director shall not impose any eligibility criteria on new 
applicants or renewal grantees not provided by statute. 

[A] The Office of National Drug Control Policy Reauthorization Act of 
2006, Pub. L. No. 109-469, ï¿½ 804, 120 Stat. 3502, 3535, enacted on 
December 29, 2006 (after the fiscal year 2006 grant cycle), amended the 
Drug Free Communities Act of 1997 by adding this statutory provision 
prohibiting the Director from imposing any eligibility criteria on new 
applicants or renewal grantees not provided by statute. 

Source: GAO analysis of the statute. 

[End of figure] 

Specifically, our review of an example of eligibility screening sheets 
used for fiscal years 2005 and 2006, and our file review of 19 initial 
grantee applications for fiscal year 2005 where eligibility screening 
sheets were present, found that the eligibility criteria delineated in 
the screening sheets used by ONDCP and SAMHSA officials to determine 
whether an applicant was an eligible coalition omitted some of the 
statutory eligibility criteria.[Footnote 36] For example, the screening 
sheet did not capture whether an applicant had described and documented 
the nature and extent of the substance abuse problem in the community; 
described the substance abuse prevention and treatment programs and 
activities; developed a strategic plan to reduce substance abuse among 
youth in a comprehensive and long-term fashion; and worked to develop a 
consensus regarding the priorities of the community to combat substance 
abuse among youth as required by statute.[Footnote 37] Nor did the 
screening sheet examine whether a coalition had established a system to 
measure and report outcomes consistent with common indicators and 
evaluation protocols established and approved by the Administrator. 
[Footnote 38] Without having all of the statutory eligibility criteria 
on the screening sheet, ONDCP increased its risk that all statutory 
eligibility criteria were not assessed and met and that all funded 
grant applicants were not statutorily eligible to receive either an 
initial or renewal grant. 

Grant Applicants Were Not Screened for Statutory Eligibility in Fiscal 
Years 2005 and 2006: 

For the Drug-Free Communities Support Program, by statute, a coalition 
must meet each of the statutory eligibility criteria each fiscal year 
to be eligible to receive an initial grant or a renewal grant.[Footnote 
39] ONDCP implemented a separate screening process, not described in 
the funding announcement, for initial and renewal grant applicants 1 
month before the fiscal year 2005 grant awards were to be announced, 
including the introduction of a criterion that grant applicants could 
not propose to use over a certain percentage of grant funds for direct 
services. Direct services are used to provide a distinct and ongoing 
service or activity for an individual or group of individuals such as 
prevention programs. ONDCP officials told us that they instituted this 
screening process because SAMHSA did not produce evidence that all 
applications had been screened for statutory eligibility in fiscal year 
2005 and to ensure that funds were awarded only to eligible coalitions, 
as required by statute. ONDCP officials told us that because of time 
constraints, ONDCP did not review all of the approximately 990 initial 
and renewal grant applicants to determine if they met all of the 
statutory eligibility criteria. Instead, ONDCP officials said that they 
established a separate screening process that would enable the agency 
to more carefully scrutinize initial or renewal grant applicants who 
met one or more of the three criteria, as described in table 1. 

Table 1: ONDCP Used Different Screening Process for Initial and Renewal 
Grant Applicants in Fiscal Year 2005: 

Criteria: Criterion 1; 
Initial grant applicants denied funding when they met one or more of 
the following: Peer review score was 68 points or below (out of 100 
points).[A]; 
Renewal grant applicants subjected to statutory eligibility screening 
when they met one or more of the following: Coalition intended to use 
40 percent or more of its projected Drug-Free Communities Support 
Program grant funds to provide direct services to the community. 

Criteria: Criterion 2; 
Initial grant applicants denied funding when they met one or more of 
the following: Postal zip code of the area served by the coalition 
overlapped with a coalition already receiving Drug-Free Communities 
Support Program grant funds (a renewal grantee) and the coalitions were 
not collaborating.[B]; 
Renewal grant applicants subjected to statutory eligibility screening 
when they met one or more of the following: Peer review score was 40 
points or below (out of 100 points). 

Criteria: Criterion 3; 
Initial grant applicants denied funding when they met one or more of 
the following: Coalition intended to use 20 percent or more of its 
projected Drug-Free Communities Support Program grant funds to provide 
direct services to the community; 
Renewal grant applicants subjected to statutory eligibility screening 
when they met one or more of the following: Any budgetary or other 
financial concerns existed. 

Source: ONDCP. 

[A] Peer reviewers are external experts that scored the grant 
applications on the basis of several areas, including, for example, the 
extent to which a coalition demonstrated effective capacity building 
and strategic planning. 

[B] By statute, the Administrator may, with respect to a community, 
make a grant to one eligible coalition that represents that community. 
The Administrator may award a grant to more than one eligible coalition 
that represents a community if the eligible coalitions demonstrate they 
are collaborating with one another and each of the coalitions has 
independently met the statutory eligibility criteria. 

[End of table] 

The separate screening process that ONDCP officials said they used for 
the Drug-Free Communities Support Program in fiscal year 2005 differed 
from the process for federal grant programs in general, as shown in 
figure 3. 

Figure 3: Screening Process ONDCP Reportedly Used in Fiscal Year 2005 
for the Drug-Free Communities Support Program Differed from Typical 
Screening Process for Federal Grant Programs: 

[See PDF for image] 

Actual Screening Process ONDCP Used In 2005: 

After the fiscal year 2005 Request for Applications outlining the grant 
application requirements was issued, ONDCP officials said that they 
implemented a different screening process for initial and renewal grant 
applications. The fiscal year 2005 Request for Applications did not 
describe ONDCPï¿½s new screening process. 

As a result of implementing its new screening process 1 month before 
the fiscal year 2005 grants were to be announced, ONDCP officials 
reported that they did not screen all initial and renewal grant 
applicants for statutory eligibility. 

Typical Screening Process: 

Step 1: Funding announcement: 
Request for Applications; Requirements explained in funding 
announcement. 

Step 2: Application screening: 
Checklist: 
* length; 
* date of receipt; 
* completeness; 
* technical format. 

Does application meet screening? 
Yes: Pass, move to step 3; 
No: Fail, applicant disqualified. 

Step 3: Eligibility screening: 
Statutory Eligibility Requirements Assessed: 
Does application meet eligibility? 
Yes: Applicant qualified; 
No: applicant disqualified. 

Source: GAO analysis of UNDCP and SAMSHA data. 

[End of figure] 

The criteria and procedures ONDCP officials told us they implemented 
for the separate screening process differed for initial and renewal 
grant applicants. One key difference was the direct services threshold 
applied--20 percent or more of funds could not be used for direct 
services for initial grant applicants and 40 percent or more of funds 
could not be used for direct services for renewal grant applicants. 
Table 1 describes the different screening process and criteria ONDCP 
officials said they used for initial and renewal grant applicants in 
fiscal year 2005. 

In addition, ONDCP officials reported different outcomes for its 
separate screening process for initial and renewal grant applicants. 
For the initial grant applicants, ONDCP officials reported that all of 
the approximately 180 that were funded met the statutory eligibility 
requirements. However, ONDCP officials acknowledged that most or about 
515 of the approximately 600 (about 86 percent) renewal grant 
applicants were funded in fiscal year 2005 without ONDCP or SAMHSA 
ensuring that these grantees satisfied the statutory eligibility 
criteria.[Footnote 40] The results of ONDCP's review are shown in 
figure 4. 

Figure 4: ONDCP Reported that All Funded Initial Grant Applicants Met 
Statutory Eligibility Criteria in Fiscal Year 2005, but Most Funded 
Renewal Grant Applicants Were Not Screened: 

[See PDF for image] 

This figure contains two pie-charts and one subchart depicting the 
following data: 

Initial grant applicants, FY 2005: 

Not screened for statutory eligibility criteria and were denied 
grants[A]: 49% (190); 

Screened for statutory eligibility criteria and eligible for grants: 
46% (180); Satisfied statutory eligibility criteria and were awarded 
grants: 100% (180); 

Screened for statutory eligibility criteria and not eligible for 
grants: 5% (20). 

Total = approximately 390 initial grant applicants. 

Renewal grant applicants, FY 2005: 

Were not screened for statutory eligibility criteria, but were awarded 
grants: 86% (515); 

About 55 grant applicants were screened for statutory eligibility 
criteria and were not eligible for grants and about 30 satisfied 
statutory eligibility criteria and were awarded grants: 14% (85). 

Total = approximately 600 renewal applicants. 

Note: Numbers may not add due to rounding. 

[A] Met one or more of the three criteria in table 1. 

Source: ONDCP. 

[End of figure] 

For the fiscal year 2006 screening process, ONDCP officials said they 
applied the direct services criterion differently than in fiscal year 
2005. The direct services criterion was also described explicitly as an 
additional eligibility criterion to be applied (that is, eligibility 
criterion apart from the statutory eligibility criteria) in the 2006 
funding announcement. For fiscal year 2006, for initial grant 
applicants only, the 20 percent direct services threshold was 
explicitly described in both the inter-agency agreement and in the 
fiscal year 2006 funding announcement. The inter-agency agreement 
between ONDCP and SAMHSA stated that "ONDCP shall review [initial] 
applications for compliance with the 20 percent direct services 
policy." The funding announcement provided to initial grant applicants 
stated that "No more than 20 percent of [Drug-Free Communities] grant 
funds may be used for direct services." The funding announcement also 
stated that if initial grant applicants did not meet this eligibility 
requirement, their applications would not be forwarded for peer review. 

While ONDCP clarified the funding announcement for grant applicants in 
fiscal year 2006, ONDCP did not screen renewal grant applicants for the 
statutory eligibility criteria in fiscal year 2006 because, according 
to ONDCP officials, these applicants were already considered to be 
statutorily eligible for grant funds. ONDCP officials told us that they 
believed that the initial eligibility screening conducted in a previous 
year was sufficient for the 4 remaining fiscal years. However, the Drug-
Free Communities Support Program's statutory framework requires that 
all coalitions meet each of the statutory eligibility requirements each 
fiscal year to be eligible to receive an initial grant or a renewal 
grant. As a result of ONDCP's policy in fiscal year 2006, all of the 
renewal grant applicants that received renewal grants did so without 
ONDCP determining whether these applicants satisfied the statutory 
eligibility criteria for that fiscal year. 

ONDCP and SAMHSA's Grant-Making Process Was Hindered by a Lack of 
Defined Roles and Responsibilities and Written Policies and Procedures: 

ONDCP and SAMHSA experienced collaboration challenges, which 
contributed to the irregularities we identified for fiscal years 2005 
and 2006. In October 2005, we identified leading practices that can be 
used to help enhance and sustain collaboration in instances where 
multiple agencies have shared responsibility for a program or function. 
These practices include, among other things, establishing mutually 
reinforcing or joint strategies, agreeing on roles and 
responsibilities, and establishing compatible policies, procedures, and 
other means to operate across agency boundaries.[Footnote 41] Lack of 
fully defined roles and responsibilities and documented procedures to 
follow for eligibility screening hampered the efforts of ONDCP and 
SAMHSA to effectively manage the grant-making process. 

As we reported in our prior work, collaborating agencies need to 
establish strategies that work in concert with those of their partners, 
which can help in aligning partner agencies' activities, core 
processes, and resources to accomplish a common outcome.[Footnote 42] 
In fiscal years 2005 and 2006, ONDCP and SAMHSA signed inter-agency 
agreements, which were intended to provide a strategy for managing the 
grant-making process. Further, as reflected in the legislative history 
of the Drug-Free Communities Act of 1997, the Administrator of the 
program would use the terms of the inter-agency agreement to oversee 
the program and ensure that it is operated and grants are awarded in 
accordance with the policies and criteria established for the program. 
[Footnote 43] 

In June 2006, we reported that the use of inter-agency agreements 
requires, among other things, that the issuing agency define roles and 
responsibilities for managing the program.[Footnote 44] However, the 
inter-agency agreement for fiscal year 2005 did not fully articulate 
roles and responsibilities for ONDCP's management of SAMHSA, such as 
the role of SAMHSA in screening renewal grant applicants for 
eligibility, and for the grant program overall. Therefore, in fiscal 
year 2005, confusion occurred over the extent to which eligibility 
screening had taken place, resulting in ONDCP implementing its separate 
screening process. 

Furthermore, procedures governing the grant-making process were not 
fully documented for the two agencies, as called for by internal 
control standards for the federal government, to operationalize 
SAMHSA's tasks. The inter-agency agreement for fiscal year 2005 states 
that SAMHSA is responsible for tasks in several broad areas, including 
issuing the notice of funding, the application renewal process for 
renewal grantees, and making decisions jointly with ONDCP regarding the 
selection of grantees and the awarding of initial grantees and renewal 
awards. However, the inter-agency agreement did not specify what 
guidance SAMHSA was to follow with respect to screening renewal grant 
applicants for eligibility. For example, in the absence of detailed 
information on how ONDCP and SAMHSA would screen initial and renewal 
grant applicants, SAMHSA officials said they relied on established HHS 
grant guidance to determine how and when activities such as eligibility 
screening were to be performed. The inter-agency agreement also did not 
discuss how ONDCP and SAMHSA would agree upon the policies to be 
followed in the grant-making process and how those policies would be 
documented. In addition, ONDCP officials reported that they believed 
that SAMHSA had agreed to conduct the eligibility screening, and when 
SAMHSA did not produce its screening sheets, ONDCP officials said they 
could not be certain that SAMHSA had conducted the eligibility 
screening. Without formal, written policies and procedures both 
agencies experienced confusion over what steps would be followed to 
manage the program. 

ONDCP Has Taken Steps to Better Manage the Grant-Making Process, but 
These Efforts Can Be Strengthened: 

Since fiscal year 2006, ONDCP has taken steps to strengthen its 
management of the grant-making process by establishing senior-level 
management groups to address collaboration and monitoring issues, 
eliminating its use of the direct services eligibility criterion in 
response to reauthorizing legislation, and clarifying grant program 
roles and responsibilities. However, effective oversight is still 
lacking because ONDCP has neither developed nor documented its approach 
to monitoring and overseeing the program as a whole. Furthermore, roles 
and responsibilities for managing the program continue to remain fully 
undefined, including the appropriate role of the program Administrator. 
The ONDCP Reauthorization Act of 2006 prohibited the Director of ONDCP 
from imposing any eligibility criteria on initial applicants or renewal 
grantees not included in the statute. In response, ONDCP changed 
certain procedures for fiscal year 2007 but has not changed its 
procedures to ensure that renewal grant applicants are screened for 
statutory eligibility. 

Lack of Ongoing Monitoring, Documentation Problems, and Undefined Roles 
and Responsibilities Remain Challenges for the Grant-Making Process: 

In response to our inquiries about what steps have been taken to 
monitor and oversee the grant program since fiscal year 2005, senior 
ONDCP officials told us that they have taken action to clarify 
monitoring roles and responsibilities and improve related 
documentation. However, effective oversight is still lacking because 
ONDCP has neither developed nor documented its approach to monitoring 
and overseeing the program as a whole. According to ONDCP officials, to 
address long-term strategic issues involving, among other things, 
monitoring activities, various senior-level management groups have been 
established, at least one of which meets every 4 to 6 weeks to address 
collaboration and monitoring issues. These officials said that no 
charter or mission statements were developed for these meetings, and 
officials were unable to provide us with information on any specific 
outcomes or policy changes that have occurred to enhance oversight of 
the program. The fiscal year 2007 inter-agency agreement includes a 
brief statement that SAMHSA is to provide a monthly report on high-risk 
grantees to ONDCP for, in their view, "the effective oversight" of the 
program, but no other program monitoring and oversight information is 
specifically discussed. Without defined oversight activities for 
ensuring successful completion of the work across all activities, ONDCP 
lacks reasonable assurance that required tasks are being performed in 
accordance with its directives. 

ONDCP officials acknowledged that they were aware that grant file 
documentation was missing during fiscal years 2005 and 2006. However, 
as of fiscal year 2007, ONDCP had not yet put in place mechanisms to 
ensure that documentation of eligibility screening were included in 
grant files, as called for by internal control standards.[Footnote 45] 
Nor had ONDCP amended the eligibility screening sheets for fiscal year 
2007 to capture all the statutory eligibility criteria. Without 
ensuring that screening sheets contain all the required statutory 
eligibility criteria, ONDCP increased its risk that grantees were not 
statutorily eligible to receive grants. 

ONDCP and SAMHSA have taken steps to clarify their respective roles and 
responsibilities for handling program administration and coordination 
issues in their fiscal year 2007 inter-agency agreement. For example, 
whereas the inter-agency agreement for fiscal year 2005 did not 
delineate roles and responsibilities for administering the grant-making 
process, the inter-agency agreement written for fiscal year 2007 
provides additional information. Specifically, the fiscal year 2007 
agreement includes a new attachment describing ONDCP's role and 
responsibilities for the program. The fiscal year 2007 inter-agency 
agreement states, for example, that ONDCP will convene "cooperative 
partners" meetings with the Center for Substance Abuse Prevention to 
enhance program coordination and collaboration. Further, the inter- 
agency agreement states that SAMHSA would provide certain services in 
connection with the awarding of grants in accordance with policies and 
procedures agreed upon by ONDCP and SAMHSA. However, all of these 
policies and procedures that ONDCP and SAMHSA agreed to are not 
documented in the inter-agency agreement or in other documentation. For 
example, the agreement states that ONDCP and SAMHSA shall agree on 
terms of the programmatic and budget review prior to reviewing renewal 
applications and that ONDCP shall make final funding decisions for 
these grants. However, the fiscal year 2007 agreement does not specify 
what the programmatic and budget review processes are and when they 
should be completed and by which agency. 

While efforts to clarify how the grant program is to be administered 
and the designation of the Director of ONDCP as responsible for making 
final funding decisions represents a step in the right direction, the 
Administrator's role is still not specified in the inter-agency 
agreement. As noted earlier, the Administrator's role is defined by 
statute as the entity that generally carries out the grant program. 
While the fiscal year 2007 agreement states that the Director of ONDCP 
will make final funding decisions, the role of the Administrator is not 
specifically identified, described, or defined in the inter-agency 
agreement. Leading practices for collaborating agencies state that 
agreement on roles and responsibilities is a necessary element for a 
collaborative working relationship.[Footnote 46] Because the 
Administrator is responsible for generally carrying out the grant 
program, it is particularly important that the agencies agree upon and 
document what this leadership role entails. Without doing so, confusion 
over managing the program could continue to occur. 

Despite ONDCP's Elimination of Certain Eligibility Criterion in 
Response to Reauthorizing Legislation, ONDCP Did Not Screen Renewal 
Grantees for Statutory Eligibility: 

In response to congressional concerns and complaints from renewal grant 
applicants that were not funded in fiscal year 2005, the ONDCP 
Reauthorization Act of 2006 prohibited the Director of ONDCP from 
imposing any eligibility criteria on initial applicants or renewal 
grantees not included in the statute.[Footnote 47] ONDCP officials said 
that, as a result of the prohibition in the reauthorizing act, they 
eliminated their use of the 20 percent direct services eligibility 
criterion for fiscal year 2007. Moreover, the fiscal year 2007 inter- 
agency agreement no longer contains the 20 percent direct services 
criterion, consistent with the reauthorization act. Instead, ONDCP 
officials stated that they take direct services into account as part of 
the overall evaluation of an application during the peer review 
process. 

Nonetheless, ONDCP continues to not screen renewal grant applicants for 
statutory eligibility. As stated earlier in this report, by statute, to 
be eligible to receive a renewal grant, a coalition shall meet all of 
the statutory eligibility criteria. However, ONDCP officials stated 
that they consider the initial screening they conduct to be sufficient 
for the remaining 4 years for renewal grantees.[Footnote 48] In fiscal 
year 2007, renewal grant applicants were not required to submit any 
supporting documentation (e.g., proof of eligible coalition members) to 
verify that they met all the statutory eligibility criteria nor were 
they screened for statutory eligibility. ONDCP's approach does not take 
into account that a coalition's eligibility status could change from 
one fiscal year to another if, for example, representatives from the 
different sectors in fiscal year 2006 left the coalition in fiscal year 
2007 and were not replaced. ONDCP's decision to not screen renewal 
grant applicants for eligibility in fiscal year 2007 raises questions 
about whether the agency could provide reasonable assurance that 
participating coalitions remain statutorily eligible. ONDCP officials 
told us that the eligibility criteria that were missing from the 
eligibility screening sheets (e.g., whether an applicant had described 
and documented the nature and extent of the substance abuse problem in 
the community) are not used during the eligibility process, but rather 
are considered during the peer review process. However, these criteria 
are intended to be used to determine statutory eligibility for grant 
funds. According to ONDCP's practices, peer reviewers do not typically 
determine eligibility; they examine only eligible applications for an 
application's strength. Without ensuring that all statutory eligibility 
criteria were met, ONDCP cannot be certain that all funded grant 
applicants were eligible. 

Conclusions: 

For fiscal years 2005 and 2006, ONDCP and SAMHSA did not adhere to key 
federal internal controls standards in the federal government and did 
not meet all statutory requirements in administering the Drug-Free 
Communities Support grant program. ONDCP has been unable to show that 
only eligible coalitions received grants in accordance with the Drug- 
Free Communities Support Program's statutory framework. In particular, 
because ONDCP has decided not to conduct eligibility screening each 
fiscal year for renewal grant applicants, it is unable to ensure that 
these coalitions remain eligible for their duration in the program, 
consistent with statutory requirements. Without well-functioning 
internal controls, such as maintaining grant documentation and 
conducting on-going monitoring, ONDCP cannot demonstrate consistent 
implementation of the key steps required in the grant-making process-- 
notably, the screening of grantees to determine their eligibility--to 
Congress, grant-seeking applicants, and the public at large. Such lack 
of assurance raises questions about whether public resources are 
properly safeguarded. 

ONDCP took steps following fiscal year 2006 to enhance its 
administration of the grant program, such as informing applicants of 
changes in its eligibility screening processes and revising its 
procedures to address internal control and other deficiencies. However, 
ongoing weaknesses in the monitoring and oversight of the program mean 
it may not be possible to ensure that all appropriate guidance and 
policies are being met or communicated to grant applicants. And while 
ONDCP and SAMHSA have made an effort to define roles and 
responsibilities in the fiscal year 2007 inter-agency agreement, 
important functions, such as the leadership role of the Administrator, 
remain unaddressed. Without fully defined and agreed upon roles and 
responsibilities, the agencies may not be able to avoid 
miscommunication and lack of collaboration over the grant-making 
process in the future. 

Recommendations for Executive Action: 

To strengthen its administration, oversight, and internal controls for 
the Drug-Free Communities Support Program, we recommend that the 
Director of the Office of National Drug Control Policy take the 
following three actions: 

1. Develop and document its approach to monitoring and overseeing 
SAMHSA and the program as a whole. 

2. Ensure that the coalitions receiving an initial grant or a renewal 
grant satisfy all of the statutory eligibility criteria for each fiscal 
year and that this is fully documented. 

3. Fully define the roles and responsibilities of SAMHSA and ONDCP, 
including those of the Drug-Free Communities Support Program 
Administrator, in the inter-agency agreement prepared for each fiscal 
year. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to ONDCP, HHS, and DOJ for review 
and comment. ONDCP and HHS provided written comments, which are 
summarized below and included in their entirety in appendixes III and 
IV, respectively. In addition, ONDCP and DOJ provided technical 
comments, which we incorporated as appropriate. 

In commenting on the draft report, the Director of ONDCP described the 
efforts it has underway or planned to address our recommendations. 
Although these actions are intended to strengthen the management of the 
grant review process, based on the ONDCP Director's response, 
additional efforts could help ensure that our recommendations are fully 
implemented, as discussed below. 

Regarding our first recommendation on developing and documenting an 
approach to program monitoring and oversight, the Director noted that 
ONDCP has added more detail in the inter-agency agreement on the roles 
and responsibilities of ONCDP and SAMHSA and created and implemented a 
policy manual for the program, which was implemented in 2007. However, 
our analysis of ONDCP's policy manual showed that it does not include 
information on whether and how ONDCP will conduct oversight and 
monitoring. The Director also stated that ONDCP has documentation of 
minutes and activities that take place at their monthly interagency 
management meetings. During our review, we repeatedly requested these 
minutes but ONDCP officials said that no formal minutes were developed 
or maintained and did not provide them. However, we have modified the 
report to delete the statement that minutes were not available. We 
continue to believe that this recommendation remains valid because, 
without defined oversight activities for ensuring successful completion 
of the work across all activities, ONDCP increases its risk that it 
cannot provide reasonable assurance that required tasks are being 
performed in accordance with its directives. 

Concerning our second recommendation that ONDCP ensure that the 
coalitions receiving an initial grant or a renewal grant satisfy all of 
the statutory eligibility criteria for each fiscal year and that these 
decisions are fully documented, the ONDCP Director noted that they have 
taken steps to ensure that all renewal applicants are screened for 
eligibility, consistent with our recommendation, and documentation 
related to screening applicants is maintained in grant files. However, 
the ONDCP Director took issue with our position that all statutory 
eligibility requirements should be included on the screening sheets 
used to document application reviews. The Director said that the 
initial joint review by ONDCP and SAMHSA staff, combined with the 
application review and scoring process conducted during peer reviews, 
effectively ensure that applications recommended for funding meet 
statutory eligibility requirements. However, we continue to maintain 
that including all statutory eligibility requirements on the screening 
sheets could increase ONDCP's assurance that all funded applicants are 
statutorily eligible and that these decisions are fully documented. 

Regarding the third recommendation on clearly defining roles and 
responsibilities, the ONDCP Director noted that ONDCP plans to add 
additional details to the inter-agency agreement on the role of the 
Drug-Free Communities Support Program Administrator. 

The ONDCP Director commented on some of the data we presented in this 
report. Specifically, the Director expressed concern that we were 
unable to accurately identify the number of applications for fiscal 
years 2005 and fiscal years 2006, noting that ONDCP had provided us 
with spreadsheets that identified the number of applications received 
and their disposition. During our review, we worked continuously with 
ONDCP officials in an effort to obtain accurate data on the number of 
applications received. Nonetheless, we were unable to do so because, 
despite our numerous attempts, we could not resolve inconsistencies in 
the information ONDCP provided over the course of our review, causing 
us to question its accuracy. However, we believe that the numbers we 
present on grant applications are sufficient to illustrate orders of 
magnitude. We revised our scope and methodology discussion in appendix 
I to explain the efforts we took to obtain the most accurate 
information available from ONDCP. 

Moreover, the Director took issue with our presentation of ONDCP's data 
in figure 4, which showed that ONDCP excluded approximately 190 initial 
applicants in fiscal year 2005 from the possibility of being funded 
without being screened for statutory eligibility. He indicated that by 
doing so ONDCP would have incurred an unnecessary expenditure of 
taxpayer dollars to review applications which fell below the funding 
threshold (range of peer review scores for which applicants are awarded 
funding). We agree that taxpayer dollars should not be expended 
unnecessarily. However, we disagree that figure 4 conveys the point the 
director is asserting; rather, our analysis of ONDCP's data shows that 
some of these approximately 190 initial applicants had peer review 
scores above the funding threshold and were excluded on the basis of 
one or more of the other criteria in the separate screening process. 

The Assistant Secretary for Legislation at HHS also commented on a 
draft of this report. Specifically, he described actions that SAMSHA 
has taken, in partnership with ONDCP, to strengthen internal controls 
and management of the DFC grant program. For example, the Assistant 
Secretary said that program information has been consolidated into the 
SAMHSA Drug-Free Communities Support Program Operations Manual, SAMHSA 
and ONDCP officials are meeting monthly to enhance inter-agency 
coordination, and SAMHSA and ONDCP are currently jointly screening 
applications for statutory eligibility and SAMHSA retains the screening 
checklists. 

As agreed with your offices, unless you publicly announce its contents 
earlier, we plan no further distribution of this report until 30 days 
from the date of this report. At that time, we will send copies of this 
report to the Director of the Office of National Drug Control Policy, 
the Secretary of the Department of Health and Human Services, the 
Attorney General of the Department of Justice, and interested 
congressional committees. We will also make copies to others upon 
request. In addition, the report is available at no charge on GAO's Web 
site at [hyperlink, http://www.gao.gov]. 

If you or your staff members have any questions regarding this report 
or would like to discuss it further, please contact me at (202) 512- 
6806 or by email at [email protected]. Contact points for our Office 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. Key contributors to this report are listed in 
appendix V. 

Signed by: 

Robert N. Goldenkoff: 
Director, Strategic Issues: 

[End of section] 

Appendix I: Scope and Methodology: 

To examine the extent to which Office of National Drug Control Policy 
(ONDCP) and the Substance Abuse and Mental Health Services 
Administration (SAMHSA) conducted its screening and grant-related 
activities for the Drug-Free Communities Support Program in accordance 
with standards for internal control in the federal government,[Footnote 
49] established laws, and leading practices for collaborating agencies, 
we reviewed available program documents, including, but not limited to, 
the Request for Applications funding announcements; the inter-agency 
agreements between ONDCP and SAMHSA, and the documented outcomes of 
specific review activities and recommendations for grant funding 
decisions. We compared ONDCP's and SAMHSA's grant-related activities in 
fiscal years 2005 through 2007 with criteria in GAO's Standards for 
Internal Control in the Federal Government. These standards, issued 
pursuant to the requirements of the Federal Managers' Financial 
Integrity Act of 1982 (FMFIA), provide the overall framework for 
establishing and maintaining internal control in the federal 
government. Also pursuant to FMFIA, the Office of Management and Budget 
(OMB) issued Circular A-123, revised December 21, 2004, to provide the 
specific requirements for assessing the reporting on internal controls. 
Internal controls and the definition of internal control in OMB 
Circular A-123 are based on GAO's Standards for Internal Control in the 
Federal Government. We also considered our prior work on results- 
oriented government related to leading practices for federal 
collaboration as well as leading practices for awarding grants. 
[Footnote 50] In addition, we compared ONDCP and SAMHSA's grant related 
activities in fiscal years 2005 through 2007 with statutory criteria 
included in the Drug-Free Communities Act of 1997,[Footnote 51] the 
Drug-Free Communities Support Program Reauthorization Act of 2001, 
[Footnote 52] and the Office of National Drug Control Policy 
Reauthorization Act of 2006.[Footnote 53] Further, to determine whether 
ONDCP and SAMHSA had documented eligibility screening, we reviewed 
grant applications for fiscal years 2005 and 2006. We did not review 
all available applications because this was not practical. Instead, we 
attempted to select probability samples of applications to review; this 
would have allowed us to generalize the results to all of the fiscal 
year 2005 and 2006 applications (about 990 and over 700, respectively, 
for a total of about 1,690). However, because ONDCP and SAMHSA were 
unable to provide accurate counts of the total numbers of applications 
in either year, we were unable to do so. We made numerous attempts to 
resolve inconsistencies in the information ONDCP provided over the 
course of our review, which caused us to question its accuracy. 
Consequently, we reviewed systematic random samples of available funded 
and unfunded applications for these years.[Footnote 54] For fiscal year 
2005, we reviewed 20 funded, initial applications and 21 funded, 
renewal applications, 30 unfunded, initial applications, and 20 
unfunded, renewal applications.[Footnote 55] For fiscal year 2006, we 
reviewed 25 funded, initial applications and 10 unfunded, initial 
applications. Although the applications we reviewed for both fiscal 
years were randomly selected, because the applications were not 
representative of all applications in either year we cannot generalize 
the results to the larger populations of fiscal year 2005 or 2006 
applicants. Even so, our review of these 126 grant applications 
provided us with perspective on how ONDCP and SAMHSA handled these 
applications. Additionally, because accurate counts of the total 
numbers of applications in fiscal years 2005 and 2006 were not 
available, we provide approximate numbers of applications to illustrate 
orders of magnitude. 

In addition to our review of documents and grant files described above, 
we interviewed key staff at ONDCP and SAMHSA about how they conducted 
and documented grant-related activities since 2006. While our 
discussions with the agency officials from ONDCP and SAMHSA focused on 
the agencies' review methods and funding decisions implemented in 
fiscal years 2005 and 2006, we also obtained information for fiscal 
year 2007 wherever possible to provide the most current information on 
the program. We did not review the fiscal year 2008 grant-making 
process because the process was underway during our review and the 
results of the process were not yet available. 

We conducted this performance audit from July 2006 through July 2008 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings and conclusions based on our audit objectives. We believe that 
the evidence obtained provides a reasonable basis for our findings and 
conclusions based on our audit objectives. 

[End of section] 

Appendix II: Timeline of Key Events for Drug-Free Communities Support 
Program, Fiscal Year 2005: 

This appendix presents a timeline of key events for the Drug-Free 
Communities Support Program in fiscal year 2005. 

Figure 5: Timeline of Key Events for Drug-Free Communities Support 
Program, Fiscal Year 2005: 

[See PDF for image] 

Fiscal year: 2004; 
October: ONDCP transfers Drug-Free Communities Support Program from 
OJJDP to SAMHSA. 

Fiscal year: 2005; 
March-April: Initial and renewal applications due. 

April-May: SAMHSA sends initial and renewal applications to peer 
review. 

May-July: SAMHSA receives peer review scores for all applications. 

May: SAMHSA hires contractor to calculate 20 percent direct services 
scores for renewal applications. ONDCP asks contractor to also 
calculate scores for initial applications. 

August: SAMHSA delivers to ONDCP 20 percent direct services scores for 
all applications. 

August: ONDCP has concerns about SAMHSAï¿½s screening process and whether 
all applicants were screened for eligibility prior to SAMHSA sending 
nearly all applications to peer review. ONDCP said SAMHSA could not 
provide its screening sheets. 

August: ONDCP implements its own screening process. ONDCP screens some 
applications for statutory eligibility. 

August: ONDCP announces its fiscal year 2005 grantees. More renewal 
applicants were denied funding than in past years. 

Fiscal year: 2006; 
January: Renewal applicants that were denied funding raise concerns to 
Congress about the fiscal year 2005 application review process and 
funding decisions. 

February-March: In response to applicantsï¿½ concerns, ONDCP rechecks its 
decisions for renewal applications that were denied funding. ONDCP 
funds several of these applications. 

Legend: 
ONDCP: Office of National Drug Control Policy. 
OJJDP: Office of Juvenile Justice and Delinquency Prevention. 
SAMHSA: Substance Abuse and Mental Health Services Administration. 

Source: Based on information provided to GAO by ONDCP and SAMHSA. 

[End of figure] 

[End of section] 

Appendix III: Comments from the Office of National Drug Control Policy: 

Executive Office Of The President: 
Office Of National Drug Control Policy: 
Washington, D.C. 20503: 

July 11, 2008: 

Mr. Gene L. Dodaro: 
Acting Comptroller General: 
Government Accountability Office: 
411 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Dodaro: 

I have received and reviewed your draft report of the Drug Free 
Communities (DFC) Support Program. While I appreciate the time and 
energy your staff has put forth examining DFC, much has changed about 
our oversight and management of this Program since GAO initiated its 
inquiry two years ago. In reading the draft findings, I find that many 
of the issues GAO identified that led to the challenges faced in FY2005 
have long ago been corrected in our partnership with the Substance 
Abuse and Mental Health Services Administration (SAMHSA). 

GAO's draft document identifies three primary recommendations that the 
examiners feel will help improve the internal controls and management 
of the DFC program. I am pleased to share with you, as my staff has 
done during frequent interaction with GAO staff over the last several 
years, that ONDCP and SAMHSA have fully implemented changes that 
resolve GAO's concerns as outlined in the report. Our responses to your 
recommendations are as follows: 

1. Monitor and Oversight Documentation - in the time since GAO began 
its review of DFC, we have added extensive details about the roles and 
responsibilities of both ONDCP and SAMHSA to our annual Interagency 
Agreement (IAA) as a result of the lessons learned in the FY2005 
process. Those details include specific job duties for Government 
Project Officers and Grants Management Officers at SAMHSA as well as 
more clearly defining the authority of the DFC Administrator at ONDCP. 
Additionally, in partnership with SAMHSA we have created and 
implemented a policy manual for the management of the program which was 
implemented in FY2007 and provided to you during your review of DFC. 
Additionally, we have documentation of the minutes and activities that 
take place at our monthly interagency management meeting for DFC, and 
can document changes to policy and practice that have resulted from 
this increased collaboration. 

2. Eligibility Requirements - as GAO learned during its review of DFC, 
the start of the problems that occurred in the FY2005 process are 
traced back to our inability to ensure that grant applications had been 
screened for eligibility. It was for that reason that ONDCP conducted 
the screening in FY05. 

Since that time, ONDCP has taken progressive steps each year to ensure 
that applicants are screened for eligibility and that screening 
documentation remains in the SAMHSA master grant file, with a copy kept 
in the control of the DFC Administrator at ONDCP. In addition to being 
able to document the eligibility screening process used for FY2007 and 
FY2008 new applicants, we are, consistent with your findings, now also 
screening all Renewal Grant Applicants (non-competing in years 2-5 and 
7-10 of the program) for eligibility. SAMHSA is maintaining 
documentation of this screening in the SAMHSA master grant file. 

3. Roles and Responsibilities - because we believe the role of 
Administrator for DFC is clearly defined in the statute, we had not 
previously restated that information or descriptive details in our 
management documents with SAMHSA. As the result of your input, we will 
add additional details as to the role of the Administrator to the 
already expanded IAA descriptions for other key staff and for our two 
agencies as a whole. 

While I believe that ONDCP and SAMHSA have effectively addressed each 
of the three recommendations GAO made in the report, we will continue 
to look for ways to use this document to help strengthen those 
oversights and management tools. Additionally, I need to correct and 
clarify for the record several of the points you made in your document. 

First, I am disturbed that you report in your findings that you were 
unable to accurately identify the number of applications received by 
the program in FY2005 and FY2006. ONDCP has provided GAO spreadsheets 
from both of those years (and FY2007 as well) that clearly identify the 
number of applications received and the disposition of each. We concur 
with your finding that the FY2005 master grant files do not contain 
evidence of the statutory eligibility screening process, which is why 
ONDCP stepped in to take a more hands-on approach that year. While 
ONDCP now provides clear and explicit instructions to SAMHSA with 
regards to the management of the grant files, we began to manage 
parallel documentation related to the new applicant eligibility 
screening process at ONDCP beginning in FY2007 and each succeeding 
cycle to ensure that the program complies with Congressional intent on 
the issue of eligibility assurance. Consistent with GAO's findings, 
ONDCP and SAMHSA have also begun screening all Renewal Grant 
Applications (non-competing) beginning with the FY2008 cycle, and 
SAMHSA is maintaining documentation of that effort in the master grant 
files. 

GAO also indicated in the report concerns about the eligibility sheets 
used by ONDCP and SAMHSA to screen initial applicants for statutory 
eligibility. As ONDCP staff outlined for GAO during the interview 
process, ONDCP and SAMHSA have created a two-stage process that 
combines the involvement of ONDCP and SAMHSA staff in the eligibility 
review process, along with that of independent peer reviewers who are 
doing drug prevention work in community coalitions across the country. 
We believe that the initial joint review by ONDCP and SAMHSA staff, 
combined with the application review and scoring process conducted 
during the field review, effectively ensure that applications 
recommended for funding meet the eligibility standards defined in the 
Drug Free Communities Act. 

Finally, as pertaining to the statutory eligibility process, GAO 
appears to advocate in Figure 4 of the report that GAO believes ONDCP 
and SAMHSA should have spent government resources reviewing the 190 
grants that were not reviewed for statutory eligibility despite the 
fact they fell well below the fundable score range for FY2005. I do not 
believe it is prudent to expend tax dollars reviewing grants for 
eligibility that have scored below the funding threshold and will not 
receive a grant regardless of statutory eligibility. 

I am very pleased with the progress we have made in the three funding 
cycles since FY2005. We have not only improved our oversight of DFC, we 
have also improved our support of our grantees' efforts to push back 
against youth drug use in their communities. We have increased the 
level of detail in our Interagency Agreements to assist both SAMHSA and 
ONDCP in managing expectations and improving our management of the 
program. Through our interagency workgroup we have developed and 
implemented new policies and procedures to strengthen oversight and 
improve effectiveness. While we have already implemented changes that 
address the concerns outlined in this document, we will continue to 
look for ways to reduce the government's risk while improving our 
grantees' effectiveness, and will use your guidance in these efforts. 

Sincerely, 

Signed by: 
John P. Walters: 
Director: 

[End of section] 

Appendix IV: Comments from the Department of Health and Human Services: 

Department Of Health And Human Services Office Of The Secretary: 
Assistant Secretary for Legislation: 
Washington, DC 20201: 

July 17, 2008: 

Robert N. Goldenkoff: 
Director, Strategic Issues: 
Government Accountability Office: 
411 G Street, NW: 
Washington, DC 20548: 

Dear Mr. Goldenkoff: 

Enclosed are the Department's comments on the U.S. Government 
Accountability Office's (GAO) draft report entitled, "Drug-Free 
Communities Support Program: Stronger Internal Controls and Other 
Actions Needed to Better Manage the Grant-Making Process" (GAO 08-57). 

The Department appreciates the opportunity to review and comment on 
this report before its publication. 

Sincerely, 

Signed by: 

Jennifer R. Luong, for: 

Vincent J. Ventimiglia, Jr. 
Assistant Secretary for Legislation: 

Attachment: 

General Comments For The Department Of Health And Human Services (HHS) 
On The U.S. Government Accountability Office's (GAO) Draft Report 
Entitled: "Drug-Free Communities Support Program: Stronger Internal 
Controls And Other Actions Needed To Better Manage The Grant-Making 
Process" (GAO 08-57): 

The Department supports the Executive Office of the President, Office 
of National Drug Control Policy (ONDCP) in their role as Drug Free 
Communities (DFC) Program Administrator. DFC aligns with the clear 
vision and mission that Substance Abuse and Mental Health Services 
(SAMHSA) has established in supporting States, local agencies, and 
individuals in building resilience and capacity for communities at risk 
of substance abuse. DFC has become a cornerstone in our work in 
communities across the nation. Both ONDCP and SAMHSA have worked 
together to tightly manage the DFC grant program. 

In responding to the GAO report, the Department is pleased to report 
that significant progress continues to be made in cooperation with 
ONDCP. SAMHSA has historically maintained internal controls that 
include detailed policies and procedures for managing large grant 
programs. This information was adapted to meet the special needs of the 
DFC Program. 

* Internal Controls for DFC Management: The DFC information is now 
consolidated into the SAMHSA DFC Operations Manual. Content is updated 
as ONDCP and SAMHSA work closely on key policy and program tools and 
resources in order to effectively manage the DFC grant program. The 
manual consists of a base document of roles and responsibilities for 
ONDCP and across SAMHSA; a detailed annual grant work plan with 
timelines; Inter-Agency Agreement and amendments; grant management 
policy materials and tools; grant review materials and peer review 
processes; program site visit and technical assistance protocols; and 
Freedom of Information procedures for coordination with ONDCP. 

* Inter-Agency Coordination: SAMHSA holds DFC policy management 
meetings weekly in order to plan across SAMHSA, track Inter-Agency 
Agreement deliverables for ONDCP, and address any barriers in 
successfully completing the work. Participants are from key leadership 
across SAMHSA. As the DFC Administrator, ONDCP participates in an 
official joint meeting the first Monday of each month, makes 
recommendations for agenda topics, and approves the meeting summary, an 
official record of the meeting. ONDCP and SAMHSA's Center for Substance 
Abuse Prevention also hold monthly program meetings with DFC program 
managers and project officers and grant specialists. 

* Statutory Eligibility Screening: SAMHSA and ONDCP now jointly screens 
DFC standard applications for statutory eligibility and SAMHSA retains 
the screening checklists in an agreed upon location. If an application 
is funded, then the checklist is retained in their official grant file. 
Unfunded applicant screening sheets are retained for 1 year by SAMHSA's 
Office of Grant Review. 

* Appeals Process for Grantee: ONDCP and SAMHSA have developed and 
implemented a "Progressive Discipline and Appeals Process" that is 
being widely disseminated to grant recipients. Through a Memorandum of 
Understanding with the HHS Departmental Appeals Board, grant recipients 
have appeals right for both grant suspensions and terminations, a 
change in SAMHSA policy. 

These steps are illustrative of strategies that have improved internal 
controls and management of the DFC program within SAMHSA and in our 
partnership with ONDCP. 

[End of section] 

Appendix V: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Robert N. Goldenkoff, (202) 512-6806 or [email protected]: 

Staff Acknowledgments: 

In addition to the contact named above, key contributors to this report 
were Glenn G. Davis, Assistant Director, Lisa G. Shibata, David P. 
Alexander, Duren Banks, Amy Bernstein, Randall J. Cole, Willie Commons 
III, Daniel S. Kaneshiro, Alison Martin, Linda S. Miller, Jan B. 
Montgomery, Raymond J. Rodriguez, and Adam Vogt. 

[End of section] 

Footnotes: 

[1] National Institute on Drug Abuse, Monitoring the Future 
(Washington, D.C.: 2007). 

[2] Pub. L. No. 105-20, 111 Stat. 224, codified at 21 U.S.C. ï¿½ 1521 et 
seq. 

[3] For purposes of this report, "initial" grant applicants refer to 
those applying for year 1 or year 6 of funding or who have had a lapse 
in their funding in the previous fiscal year. "Renewal" grant 
applicants received funding in the previous year and are applying for 1 
fiscal year of funding, either year 2-5 or year 7-10. 

[4] The Office of National Drug Control Policy Reauthorization Act of 
2006, Pub. L. No. 109-469, ï¿½ 803, 120 Stat. 3502, 3535, authorized an 
increase in the maximum amount of the grant award to $125,000 per 
fiscal year; the maximum was previously $100,000. In fiscal year 2008, 
ONDCP will begin awarding grants up to $125,000. 

[5] 21 U.S.C. ï¿½ 1532. 

[6] 21 U.S.C. ï¿½ 1531(d). 

[7] The Advisory Commission is comprised of 11 members appointed by the 
President. 

[8] Given the growth of the program, the Advisory Commission 
recommended the review. 

[9] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-00-21.3.1] 
(Washington, D.C.: Nov. 1999). 

[10] GAO, Results Oriented Government Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-06-15] (Washington, D.C.: Oct. 
21, 2005). 

[11] A systematic random sample is when the population is listed in 
some order and every 10th grant application, for example, is selected 
for the sample. A random start is used to select the initial element, 
or starting point, for the sample. 

[12] Pub. L. No. 97-255, 96 Stat. 814. 

[13] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15]. 

[14] Pub. L. No. 105-20, 111 Stat. 224. 

[15] Pub. L. No. 107-82, 115 Stat. 814. 

[16] Pub. L. No. 109-469, 120 Stat. 3502. 

[17] See fig. 2 for a summary of the program's statutory eligibility 
criteria. 

[18] An "eligible coalition" is defined as a coalition that meets the 
applicable statutory eligibility criteria. 

[19] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15]. 

[20] The other two criteria are described later in this report; see 
table 1. 

[21] For renewal grant applicants, 40 percent or more of funds could 
not be used for direct services, whereas for initial grant applicants, 
20 percent or more of funds could not be used for direct services. 

[22] Since the Drug-Free Communities Support Program was established by 
the Drug-Free Communities Act of 1997, Pub. L. No. 105-20, 111 Stat. 
224, the program has been reauthorized by the Drug-Free Communities 
Support Program Reauthorization Act of 2001, Pub. L. No. 107-82, 115 
Stat. 814, and by the Office of National Drug Control Policy 
Reauthorization Act of 2006, Pub. L. No. 109-469, 120 Stat. 3502. 

[23] 21 U.S.C. ï¿½ 1531(d). 

[24] 21 U.S.C. ï¿½ï¿½ 1531(c), 1532(a). 

[25] Prior to fiscal year 2008, grantees were eligible to receive up to 
$100,000 per fiscal year. The Office of National Drug Control Policy 
Reauthorization Act of 2006, Pub. L. No. 109-469, ï¿½ 803, 120 Stat. 
3502, 3535, authorized an increase in the maximum amount of the grant 
award up to $125,000 per fiscal year. In fiscal year 2008, ONDCP will 
begin awarding grants up to $125,000. 

[26] The program's fiscal year 2007 funding announcement defines "in- 
kind contributions" as the value of goods and services donated to the 
operations of the coalition such as office space, volunteer secretarial 
services, pro bono accounting services, or other personnel serving in a 
volunteer capacity. 

[27] For fiscal year 2005, ONDCP designated the applicants slightly 
differently. "Initial grant applicants" were those applicants that 
were: (1) not current Drug-Free Communities Support Program grantees, 
(2) former grantees that had a lapse in funding in the previous year, 
or (3) grantees applying for their sixth year of funding. ONDCP defined 
those grant applicants that had received grants in the previous year, 
but were not applying for their sixth year of funding as "competing 
renewal" grant applicants. ONDCP also referred to "competing renewal" 
grant applicants as "continuing" grant applicants. For purposes of this 
report, we refer to grant applicants as "initial" or "renewal." 

[28] ONDCP uses peer reviewers' ratings and any resulting 
recommendations for advisory purposes. 

[29] For fiscal year 2005, SAMHSA forwarded all but one grant 
application to peer review without documenting that renewal grant 
applicants were screened for statutory eligibility. After peer review, 
ONDCP developed a screening process to determine which applications 
would be screened for statutory eligibility and funded. 

[30] GAO, Homeland Security: Contract Management and Oversight for 
Visitor and Immigrant Status Program Need to Be Strengthened, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-404] (Washington, 
D.C.: July 10, 2006). 

[31] H.R. Rep. No. 105-105, pt. 1, at 18 (1997). 

[32] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-00-21.3.1]. 

[33] Four of the five remaining project officers said that they 
screened initial grant applicants for eligibility. The fifth project 
officer did not recall whether she screened initial or renewal grant 
applicants for eligibility. 

[34] While ONDCP officials could not provide the eligibility screening 
sheets, they did provide documentation on the results of their fiscal 
year 2006 eligibility screening process. 

[35] 21 U.S.C. ï¿½1532(a). 

[36] We reviewed a total of 20 initial grantee applications for fiscal 
year 2005, 1 of which did not contain an eligibility screening sheet. 

[37] 21 U.S.C. ï¿½ 1532(a)(4). 

[38] 21 U.S.C. ï¿½ 1532(a)(6)(A). 

[39] 21 U.S.C. ï¿½ 1532(a). 

[40] We attempted to select probability samples of grant applications 
to review; this would have allowed us to generalize the results to all 
fiscal year 2005 and fiscal year 2006 grant applications. However, 
because ONDCP and SAMHSA lacked documentation to provide accurate 
counts of the total numbers of applications in either year, we were 
unable to do so. 

[41] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15]. 

[42] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15]. 

[43] H.R. Rep. No. 105-105, pt. 1, at 18 (1997). 

[44] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-404]. 

[45] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-00-21.3.1]. 

[46] [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-15]. 

[47] Pub. L. No. 109-469, ï¿½ 804, 102 Stat. 3502, 3535. 

[48] According to ONDCP, all initial grant applicants were screened for 
statutory eligibility in fiscal year 2007. However, it is beyond the 
scope of our work to independently verify whether this has occurred and 
been documented. 

[49] GAO, Standards for Internal Control in the Federal Government, 
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-00-21.3.1] 
(Washington, D.C.: Nov. 1999). 

[50] GAO, Results-Oriented Government: Practices That Can Help Enhance 
and Sustain Collaboration among Federal Agencies, [hyperlink, 
http://www.gao.gov/cgi-bin/getrpt?GAO-06-15] (Washington, D.C.: Oct. 
21, 2005). 

[51] Pub. L. No. 105-20, 111 Stat. 224. 

[52] Pub. L. No. 107-82, 115 Stat. 814. 

[53] Pub. L. No. 109-469, 120 Stat. 3502. 

[54] A systematic random sample is when the population is listed in 
some order and every kth element is selected for the sample (e.g., 
every 10th grant application). A random start is used to select the 
initial element, or starting point, for the sample. 

[55] Our methodology involved reviewing a minimum number of grant 
application files. We reviewed additional files to enhance our sample. 

[End of section] 

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