This is the accessible text file for GAO report number GAO-12-938R entitled 'The Distribution of Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment' which was released on September 14, 2012. This text file was formatted by the U.S. Government Accountability Office (GAO) to be accessible to users with visual impairments, as part of a longer term project to improve GAO products' accessibility. Every attempt has been made to maintain the structural and data integrity of the original printed product. Accessibility features, such as text descriptions of tables, consecutively numbered footnotes placed at the end of the file, and the text of agency comment letters, are provided but may not exactly duplicate the presentation or format of the printed version. The portable document format (PDF) file is an exact electronic replica of the printed version. We welcome your feedback. Please E-mail your comments regarding the contents or accessibility features of this document to Webmaster@gao.gov. This is a work of the U.S. government and is not subject to copyright protection in the United States. It may be reproduced and distributed in its entirety without further permission from GAO. Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. GAO-12-938R: United States Government Accountability Office: Washington, DC 20548: September 14, 2012: The Honorable Richard Durbin: Chairman: The Honorable Jerry Moran: Ranking Member: Subcommittee on Financial Services and General Government: Committee on Appropriations: United States Senate: The Honorable Jo Ann Emerson: Chairwoman: The Honorable José E. Serrano: Ranking Member: Subcommittee on Financial Services and General Government: Committee on Appropriations: House of Representatives: The Honorable Emanuel Cleaver, II: Chairman: Congressional Black Caucus: House of Representatives: Subject: The Distribution of Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment: For decades the nation has faced the challenge of revitalizing its most economically distressed communities, which suffer from high levels of poverty and joblessness. To help poor communities, Congress appropriated $6.2 billion in fiscal year 2010 for community and economic development programs, largely in the form of grants, loan guarantees, and direct loans. In a 2011 report, we identified 80 programs that make funding available to communities to enhance local economic activity.[Footnote 1] These activities include, but are not limited to, planning and developing strategies for job creation and retention, developing new markets for existing products, building infrastructure to attract industry to undeveloped areas, rehabilitating dilapidated housing, and establishing business incubators to provide facilities for new businesses' operations, among others. But the extent to which federal economic development grant support is aligned with local economic conditions is less clear. To assist you in your fiscal year 2013 budget deliberations you asked us to provide data that show the extent to which federal economic development grant funding is awarded to the poorest communities. In consultation with your offices, we agreed to provide data that show the distribution of community and economic development grant funds to cities and rural counties with high rates of poverty and unemployment. This letter transmits information we provided to your staff on May 5, July 23, and July 27, 2012. (See enclosure I for the presentation slides.) Specifically, these slides describe the distribution of federal community and economic development grant funding for (1) cities with high rates of poverty and unemployment and how that compares with the distribution of economic development funding to cities in general and (2) nonmetropolitan counties with high rates of poverty and unemployment and how that compares to the distribution to counties in general. The federal government supports community and economic development through grants, loans, and tax expenditures. In addition to the $6.2 billion in grants and loans, the federal government invested an even larger amount--$8.7 billion--in community and economic development through tax expenditures in fiscal year 2010.[Footnote 2] However, given your primary interest in the distribution of federal grant funds to economically distressed communities, we focused our work specifically on a selection of high dollar value community and economic development grant programs that made funding available to cities and nonmetropolitan counties. Four agencies administered these programs--the Departments of Commerce (Commerce), Housing and Urban Development (HUD), and Agriculture (USDA), and the Small Business Administration (SBA). (See enclosure II for a list of the selected economic development grant programs.) Our analysis included grant programs that use both competitive and formula award procedures to channel funds to communities with high rates of poverty or to programs that serve low and moderate income households. For example, USDA's Rural Business Opportunity grants program awards funds through a competitive process that gives priority to projects that will provide services to economically distressed communities. By contrast, HUD allocates Community Development Block Grant Program (CDBG) funds to communities by using a formula which employs several variables--poverty, population, pre-1940 housing, slow population growth and overcrowding.[Footnote 3] Although poverty is one factor in targeting funds to economically distressed communities, the CDBG program, which has the most impact on our findings, is designed to target multiple dimensions of community need. To determine the distribution of federal economic development grant funding for cities and rural counties with various rates of poverty and unemployment, we combined information from a number of sources including our previous work on community and economic development programs,[Footnote 4] agency-reported fiscal year 2010 obligation data, and economic indicator data from the U.S. Bureau of the Census' (Census) American Community Survey. Given your interest in both urban and rural communities, we examined approximately 465 cities with populations exceeding 65,000 and 2,048 nonmetro counties.[Footnote 5] To determine the amount of grant funding awarded to cities, we selected high-dollar grant programs that made federal economic development grant funds available to cities, totaling $2.3 billion in fiscal year 2010 obligations. To determine the amount of grant funding awarded to nonmetro counties, we selected grant programs that made funding available to rural locations, which totaled roughly $1.5 billion in fiscal year 2010 economic development grant obligations. [Footnote 6] To identify grant recipients in cities and related obligation amounts, we used fiscal year 2010 data from USAspending.gov (accessed Aug. 22, 2012), a publicly searchable database on government spending. To identify obligation amounts and grant recipients in nonmetro counties, we used the USDA Economic Research Service's Federal Funds data set. We assessed the reliability of these data by (1) performing electronic testing of required data elements, (2) reviewing existing information about the data and the system that produced them, and (3) interviewing agency officials knowledgeable about the data. We determined the data were sufficiently reliable for the purposes of this report. We interviewed agency officials from Commerce, HUD, SBA, and USDA about their data reliability procedures and obtained obligation data to verify the obligation totals. To approximate economic need in a given city or nonmetro county, we used poverty rates and unemployment rates from Census' 2010 American Community Survey and compared the distribution of economic development grant funding for cities and nonmetro counties with different rates of poverty and unemployment. Finally, to focus our analysis on populations experiencing economic hardships, we examined grant obligations relative to the number of persons in poverty and to unemployed persons in the geographic areas in our analyses. While there are other valid ways to measure the distribution of grant obligations, such as comparing obligations across geographies on a per capita basis, we chose to compare funding amounts relative to poverty populations and unemployed populations because of your interest in how communities with high rates of poverty and unemployment fare with respect to federal funding for community and economic development. In addition, many of the grant programs we examined are designed to aid populations in need. For this reason we compare funding across jurisdictions not on a per capita basis but on specific targeted populations with the greatest need to show the relationship of the federal grant funding to such populations. Although we singled out these populations for this analysis, it is important to note that the benefits of economic development grant funding may accrue to the wider population. We conducted our work from August 2011 to September 2012 in accordance with all sections of GAO's Quality Assurance Framework that are relevant to our objectives. The framework requires that we plan and perform the engagement to obtain sufficient and appropriate evidence to meet our stated objectives and to discuss any limitations in our work. We believe that the information and data obtained, and the analysis conducted, provide a reasonable basis for any findings and conclusions in this product. Summary: The distribution of grant funding per person in poverty in cities was not consistently aligned with overall poverty rates. Most cities, with the exception of those cities with the highest poverty rates, received roughly the same amount of economic development funding per person living in poverty. Further, when we examined how grant funds are distributed to cities based on their unemployment rates, we also found that some cities with higher unemployment rates received less funding per unemployed person than other cities with lower unemployment rates. However, we did find that a small number of cities (17 out of a total of 465 cities) with the highest unemployment rates received funding that was roughly 40 percent higher than the average for unemployed populations in all cities. Similarly, the distribution of grant funding per person in poverty to nonmetro counties was not consistently aligned with overall poverty rates. Nonmetro counties with the lowest poverty rates received more grant funding per person in poverty than counties with higher poverty rates. Further, when we examined how grant funds were aligned with unemployment rates in nonmetro counties, we found that counties with relatively low unemployment rates (under 5 percent) received more funding per unemployed person than counties with higher unemployment rates. Only those nonmetro counties with the highest unemployment rates (over 20 percent) received higher funding per unemployed person. When we compared the distribution of economic development funds awarded to nonmetro counties with funding awarded to metro counties, we found that while metro counties received more grant funds in total, nonmetro counties received a higher portion of grant funding relative to the percentage of their population in poverty. Specifically, 20 percent of the poverty population in this study lived in nonmetro counties, yet those counties received 29 percent of the total economic development grant funds. Thus, members of the poverty population in nonmetro counties received more grant funding per capita than their counterparts in metro counties. Finally, we identified a number of issues related to the characteristics of grant programs and the availability of data that limit what we can say about the geographic distribution and beneficiaries of the grant awards. First, the geographic information for the grant programs we reviewed in USAspending.gov (accessed Aug. 22, 2012) corresponds to the address of the primary grant recipient, which in some cases is not necessarily the location where the services funded by the grant are delivered. For example, Commerce provides grants to economic development organizations that may serve multiple cities. Therefore, the geographic information might understate the true reach of the federal funds. But in some cases, such as with the CDBG/Entitlement Communities program, the address of the primary recipient is also where the grant funds are spent on economic development activities because the funds are specifically awarded to support economic activities in that community. In addition, the data we analyzed do not allow us to identify who benefits from the economic activity supported by the grant. For example, we cannot tell who might have received a job from a newly established business that received an economic development grant designed to incubate new businesses in economically distressed communities. Finally, because this analysis did not examine the outcomes of these federal investments we are limited in what we can say about whether and how these grant programs improved local economic conditions. Agency Comments and Our Evaluation: We provided a draft of this correspondence to Commerce, HUD, USDA and SBA for review and comment. Commerce and HUD provided written comments, which are presented in enclosure III and IV, respectively. While both agencies generally agreed with our findings, Commerce provided additional information on some of the data we used, and HUD requested that we provide additional clarification on our methodology and results for analyzing the distribution of economic development grant funds to communities. USDA and SBA provided technical comments, which we have incorporated where appropriate. Commerce noted that the fiscal year obligation amounts which we included in the draft's enclosure II differed from the actual fiscal year 2010 obligation amounts that Commerce has for some programs. We agree that the numbers we had included in enclosure II may differ from Commerce's actual 2010 obligation amounts. This difference is due to the fact that we obtained obligation data as of August 2011. While these were the most recent data that provide federal grant obligations by county, agencies can later adjust the obligation amounts. Although many of the differences are generally quite small, we have removed the unadjusted award data from the table in enclosure II to prevent confusion with data that have been more recently adjusted.[Footnote 7] HUD commented that we should provide more information on the method of allocation for each program so that readers understand variables that influence the allocation of funds to economically distressed communities. Although we provide information about the methods programs used to allocate funds to economically distressed communities, we agree that additional information, particularly in regards to the CDBG program which has a major impact on our analysis, could be beneficial. Accordingly, we have provided additional detail about the CDBG program to clarify that poverty is one of several variables used to target CDBG funds to economically distressed communities. HUD also noted that, because our analysis focused on specific populations within communities rather than on the entire community population, it was misleading to conclude that the distribution of grant funding to communities was not consistently aligned with poverty and unemployment rates. We agree and have clarified our language and added more detailed information to make it clearer that, given congressional interest in the distribution of federal funds to populations experiencing the greatest need, our findings reflect a per capita comparison based on the populations in poverty and the unemployed as opposed to an overall per capita basis. We are sending copies of this report to the appropriate congressional committees and the Secretaries of Commerce, HUD and USDA, and the Administrator of SBA. 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 has questions regarding this report, please contact me at (202) 512-6806 or czerwinskis@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. Individuals making key contributions to this report include Laurel E. Beedon, Amy R. Bowser, Kathleen M. Drennan, Gregory O. Dybalski, Luann M. Moy, Keith C. O'Brien, Carol L. Patey, Rebecca K. Rose, Tind S. Ryen, Albert C. Sim and Michael Springer. Signed by: Stanley J. Czerwinski: Director: Strategic Issues: Enclosures--5: [End of section] Enclosure I: Briefing Slides: Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment: Results of GAO's Review of Selected Economic Development Grant Programs: City and Nonmetropolitan County Analysis: Key Question: What is the distribution of federal economic development grant funding for: 1. cities with high rates of poverty and unemployment and how does that compare with the distribution to cities in general and; 2. nonmetropolitan (nonmetro) counties with high rates of poverty and unemployment and how does that compare with the distribution to counties in genera1?[Footnote 1] Footnote: [1] Nonmetro counties are all areas outside metro counties. Metro counties, as defined by the Office of Management and Budget, include central counties containing one or more urbanized area (i.e., areas with an urban center with a population of 50,000 or more); outlying counties are included if economically tied to the core counties as measured by work commuting. Scope and Methodology: Indicators of Economic Distress and Measures of Funding: Poverty: Poverty rate: The share of population whose household before-tax income is below a threshold identified by Office of Management and Budget. Excludes noncash benefits such as public housing. Medicaid, and food stamps. Source: U.S. Census Bureau. Per capita grant funding for the population in poverty: The amount of economic development grant obligations divided by the number of people in poverty. Unemployment: Unemployment rate: The number of people unemployed as a share of the labor force. Source: U.S. Census Bureau. Per capita grant funding for the unemployed population The amount of economic development grant obligations divided by the number of people unemployed. Scope and Methodology: City Analysis: Identified i.5.7 billion in economic development grant appropriations in FY 2010: Focused on the $3.7 billion made available to cities ($2.0 billion was for rural areas); Analyzed $3.2 billion of the highest dollar, non-rural grant programs where sufficiently reliable financial data were available. Source: GAO. To estimate Calculated in economic Grouped grant funding, we: Calculated obligations by city for the grant programs: USAspending.gov fiscal year 2010; Grouped cities by their poverty rates and unemployment rates: American Community Survey 2010 1-year estimates; Compared per capita funding amounts for poverty populations and unemployed populations for groups of cities based on poverty and unemployment rates. Note: For this analysis we focused on the distribution of economic development grant funding to cities with populations of at least 65,000 as reported by the 1-year estimates of the U.S. Census Bureau’s American Community Survey.  Scope and Methodology: Nonmetro County Analysis: Identified $5.7 billion in economic development grant appropriations in FY 2010 (64 programs); Analyzed $5.2 billion of these grant programs where sufficiently reliable financial data were available (40 programs). Source: GAO. To nonmetro development in and economic grant funding, we: Calculated obligations by nonmetro county for economic development grant programs: United States Department of Agriculture (USDA) Economic Research Service Federal Funds Data and Department of Housing and Urban Development Program Data, 2010; Grouped nonmetro counties by poverty and unemployment rate: American Community Survey 2010 5-year estimates[A] and Office of Management and Budget definitions for metro counties; Compared per capita funding amounts for poverty populations and unemployed populations for nonmetro counties based on poverty and unemployment rates. [A] The U.S. Census Bureau’s American Community Survey (ACS) 2010 5- year estimates are period estimates, meaning that the survey data were collected over a period of 5 years between 2006 and 2010. Therefore, the poverty and unemployment figures represent the period of 2006 through 2010. We used the 5-year estimates because they provide survey data for all counties, whereas other estimates such as the ACS 1-year estimates for 2010, would not include data for counties with very small populations. City Analysis: Per Capita Grant Funding Distribution for Population in Poverty Is Relatively Similar Among All Cities Except Cities with the Highest Poverty Rates: Figure 1: Per Capita Economic Development Grant Funding for Population in Poverty by City Poverty Rates in 2010: [Refer to PDF for image: vertical bar graph] Average per capita funding for population in poverty for all 467 cities was $122. City poverty rate in 2010: Less than 10%; N=81 cities; 686,000 in poverty. Per capita funding for population in poverty: $109. City poverty rate in 2010: 10% to 19.9%; N=189 cities; 5.5 million in poverty; Per capita funding for population in poverty: $117. City poverty rate in 2010: 20% to 29.9%; N=154 cities; 10.5 million in poverty; Per capita funding for population in poverty: $119. City poverty rate in 2010: 30% or higher; N=43 cities; 2.4 million in poverty; Per capita funding for population in poverty: $147. Sources: USAspending.gov and U.S. Census Bureau. Note: These poverty and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed, with one exception. For cities with a poverty rate of less than 10 percent, we are 95 percent confident that the estimates are within plus or minus 4.4 percentage points of what we would have obtained if the entire population had been surveyed. [End of figure] Cities With the Highest Rate of Unemployment Received the Most Per Capita Grant Funding for Unemployed Populations; Funding Levels Varied for Other Cities: Figure 2: Per Capita Economic Development Grant Funding for Unemployed Population by City Unemployment Rate in 2010: [Refer to PDF for image: vertical bar graph] Average per capita funding for unemployed population across 465 cities was $377. City unemployment rate in 2010: Less than 5%; N=5 cities; 16,000 unemployed; Per capita funding for unemployed population: $372. City unemployment rate in 2010: 5% to 9.9%; N=146 cities; 974,000 unemployed; Per capita funding for unemployed population: $438. City unemployment rate in 2010: 10% to 14.9%; N=227 3.9 million unemployed; Per capita funding for unemployed population: $42. City unemployment rate in 2010: 15% to 19.9%; N=70 cities; 944,000 unemployed; Per capita funding for unemployed population: $413. City unemployment rate in 2010: 20% or higher; N=17 cities; 283,000 unemployed; Per capita funding for unemployed population: $531. Sources: USAspending.gov and U.S. Census Bureau data. Note: These unemployment and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed, with one exception. For cities with an unemployment rate of less than 5 percent, we are 95 percent confident that the estimates are within plus or minus 15 percentage points of what we would have obtained if the entire population had been surveyed. [End of figure] Nonmetro County Analysis: Per Capita Grant Funding Distribution for Populations in Poverty in Nonmetro Counties Was Not Consistent with County Poverty Rates: Figure 3: Per Capita Economic Development Grant Funding for Population in Poverty by Poverty Rate in Nonmetro Counties: [Refer to PDF for image: vertical bar graph] Average funding for population in poverty for 2,048 nonmetro counties was $184. County poverty rate in 2006-2010: Less than 10%; 265 nonmetro counties, 500,000 in poverty; Per capita funding for population in poverty: $286. County poverty rate in 2006-2010: 10 to 19.9%; 1,245 nonmetro counties, 4.7 million in poverty; Per capita funding for population in poverty: $181. County poverty rate in 2006-2010: 20 to 29.9%; 455 nonmetro counties, 2.4 million in poverty; Per capita funding for population in poverty: $161. County poverty rate in 2006-2010: 30% or higher; 83 nonmetro counties, 500,000 in poverty; Per capita funding for population in poverty: $223. Sources: U.S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development. Note: These poverty and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed. [End of figure] Nonmetro Counties With the Highest Rate of Unemployment Received the Most Per Capita Grant Funding for Unemployed Populations; Funding Levels Varied for Other Counties: Figure 4: Per Counties Capita Economic Development Grant Funding for Unemployed Population by Unemployment Rate in Nonmetro Counties: [Refer to PDF for image: vertical bar graph] Average funding for unemployed population for 2,048 nonmetro counties was $771. County unemployment rate in 2006-2010: Less than 5%; 524 nonmetro counties, 100,000 unemployed; Per capita funding for unemployed population: $1,507. County unemployment rate in 2006-2010: 5% to 9.9%; 1,085 nonmetro counties, 1.2 million unemployed; Per capita funding for unemployed population: $713. County unemployment rate in 2006-2010: 10% to 14.9%; 360 nonmetro counties, 500,000 unemployed; Per capita funding for unemployed population: $639. County unemployment rate in 2006-2010: 15% to 19.9%; 60 nonmetro counties, 70,000 unemployed; Per capita funding for unemployed population: $1,094. County unemployment rate in 2006-2010: 20% or higher; 19 nonmetro counties, 20,000 unemployed; Per capita funding for unemployed population: $2,678. Sources: U. S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development. Note: These unemployment and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed, with one exception. For counties with an unemployment rate of 20 percent or higher, we are 95 percent confident that the estimates are within plus or minus 6.2 percentage points of what we would have obtained if the entire population had been surveyed. The counties with an unemployment rate of 20 percent or higher include several counties in states including, for example, Alaska, South Dakota, and Mississippi. [End of figure] Nonmetro Counties Received a Higher Portion of Grant Funding Relative to the Percentage of People in Poverty: Figure 5: Poverty Population and Economic Development Grant Obligations for Metro and Nonmetro Counties in 2010: Metro counties: (=1,088. Nonmetro counties: N=2,048. Population in poverty[A]: (N=40,811,086): Metro counties: 80%; Nonmetro counties: 20%. Economic development grant obligations: Metro counties: 71%; Nonmetro counties: 29%. Sources: U.S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development. Note: Nonmetro counties are all areas outside metro counties. Metro counties as defined by the Office of Management and Budget, include central counties containing one or more urbanized area (i.e., areas with an urban center with a population of 50,000 or more); outlying counties are included if economically tied to the core counties as measured by work commuting. a American Community Survey 2010 5-year estimates are period estimates, meaning that the survey data were collected over a period of 5 years between 2006 and 2010. Therefore, the poverty figures represent the period of 2006 through 2010. We used the 5-year estimates because they provide survey data for all counties, whereas other estimates such as the 1-year estimates for 2010 would not include data for counties with very small populations. The economic development grant obligations are for fiscal year 2010. [End of figure] Data Limitations: Data do not provide information on: * where grant funded services are delivered; * who benefits from grant funded services; * whether the grant was effective in improving economic conditions for the county or city, or; * what other resources (i.e., federal tax expenditures or loans, state or local revenues, or private investments, etc.) also contribute to economic development in communities.[A] [A] Tax expenditures are preferential provisions in the tax code, such as exemptions and exclusions from taxation, deductions, credits, deferral of tax liability, and preferential tax rates that result in forgone revenue for the federal government. The revenue that the government forgoes is viewed by many analysts as spending channeled through the tax system. See GAO, Community Development: Limited Information on the Use and Effectiveness of Tax Expenditures Could Be Mitigated by Congressional Attention. GAO-12-262 (Washington, D.C.: Feb. 29, 2012). Economic Development Grant Obligations and Poverty Rates for cities, 2010: Table 1: Economic Development Grant Obligations and Poverty by City, Fiscal Year 2010: City poverty rate: Less than 10 percent; Poverty rate: 7.5%; Per capita funding for population in poverty: $109; Total obligations: $74,945,364; Total population:9,291,621; Total population in poverty: 686,445; Number of cities: 81. City poverty rate: 10 to 19.9 percent; Poverty rate: 16.1%; Per capita funding for population in poverty: $117; Total obligations: $639,977,744; Total population:34,795,899; Total population in poverty: 5,454,829; Number of cities: 189; City poverty rate: 20 to 29.9 percent; Poverty rate: 22.6%; Per capita funding for population in poverty: $119; Total obligations: $1,241,993,980; Total population:47,432,663; Total population in poverty: 10,450,089; Number of cities: 154; City poverty rate: 30 and higher; Poverty rate: 34.6%; Per capita funding for population in poverty: $147; Total obligations: $350,974,018; Total population:7,164,949; Total population in poverty: 2,381,280; Number of cities: 43; City poverty rate: For all 467 cities; Poverty rate: 19.7%; Per capita funding for population in poverty: $122; Total obligations: $2,307,891,106[A]; Total population:98,685,132; Total population in poverty: 18,972,643; Number of cities: 4,671[B]. Sources: USAspending.gov and U.S. Census Bureau data. Sources: USAspending.gov and U.S. Census Bureau data. Note: These poverty and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed with one exception. For cities with a poverty rate of less than 10 percent, we are 95 percent confident that the estimates are within plus or minus 4.4 percentage points of what we would have obtained if the entire population had been surveyed. [A] The total for this column—approximately $2.3 billion for nonrural, high-dollar economic development grants—does not match the amount on slide 4 of $3.2 billion for these grants. The $3.2 billion amount is the fiscal year 2010 appropriation amount for the programs in this analysis, and the $2.3 billion is the obligation total in fiscal year 2010 for those programs. [B] The 467 cities represent those cities with both obligation data in the USAspending.gov fiscal year 2010 grants data and poverty data available in the American Community Survey 1-year estimates. The American Community Survey 1-year estimates include cities with populations of at least 65,000. [End of table] Economic Development Grant Obligations and Unemployment Rates for Cities, 2010: Table 2: Economic Development Grant Obligations and Unemployment by City, Fiscal Year 2010: City unemployment rate: Less than 5 percent; Unemployment rate: 4.4%; Per capita funding for unemployed population: $372; Total obligations: $6,068,710; Total population: 616,888; Total unemployed population: 16,299; Number of cities: 5. City unemployment rate: 5 to 9.9 percent; Unemployment rate: 8.2%; Per capita funding for unemployed population: $438; Total obligations: $426,734,820; Total population: 22,149,304; Total unemployed population: 973,926; Number of cities: 146. City unemployment rate: 10 to 14.9 percent; Unemployment rate: 12.3%; Per capita funding for unemployed population: $342; Total obligations: $1,334,217,145; Total population: 61,164,361; Total unemployed population: 3,898,825; Number of cities: 227. City unemployment rate: 15 to 19.9 percent; Unemployment rate: 16.3%; Per capita funding for unemployed population: $413; Total obligations: $390,446,887; Total population: 12,020,698; Total unemployed population: 944,375; Number of cities: 70. City unemployment rate: 20 percent or higher; Unemployment rate: 24.8%; Per capita funding for unemployed population: $531; Total obligations: $149,940,006; Total population: 2,582,755; Total unemployed population: 282,518; Number of cities: 17. City unemployment rate: For all 465 cities; Unemployment rate: 12.0%; Per capita funding for unemployed population: $377; Total obligations: $2,307,407,568[A]; Total population: 98,534,006; Total unemployed population: 6,115,943; Number of cities: 465[B]. Sources: USAspending.gov and U.S. Census Bureau data. Note: These unemployment and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed, with one exception. For cities with an unemployment rate of less than 5 percent, we are 95 percent confident that the estimates are within plus or minus 15 percentage points of what we would have obtained if the entire population had been surveyed. The 2010 unemployment rate is a period estimate based on data collected over 12 months. [A] The total for this column—approximately $2.3 billion for nonrural, high-dollar economic development grants—does not match the amount on slide 4 of $3.2 billion for these grants. The $3.2 billion amount is the fiscal year 2010 appropriation amount for the programs in this analysis, and the $2.3 billion is the obligation total in fiscal year 2010 for those programs. [B] The 465 cities represent those cities with both obligation data in the USAspending.gov fiscal year 2010 grants data and unemployment data available in the American Community Survey 1-year estimates. The American Community Survey 1-year estimates include cities with populations of at least 65,000. Though the total number of cities listed on page 15 is 467, 2 fewer cities had unemployment data available in the American Community Survey 1-year estimates. [End of table] Economic Development Grant Obligations and Poverty Rates for Nonmetro Counties: Table 3: Economic Development Grant Obligations and Poverty Rates by Nonmetro County: Nonmetro county poverty rate: Less than 10 percent; Poverty rate: 8.4%; Per capita funding for population in poverty: $286; Total obligations in FY 2010: $129,135,079; Total population 2006-2010: 5,527,800; Total population in poverty 2006-2010: 452,147; Number of counties 2006-2010: 265. Nonmetro county poverty rate: 10 to 19.9 percent; Poverty rate: 14.9%; Per capita funding for population in poverty: $181; Total obligations in FY 2010: $850,695,596; Total population 2006-2010: 32,817,637; Total population in poverty 2006-2010: 4,704,250; Number of counties 2006-2010: 1,245. Nonmetro county poverty rate: 20 to 29.9 percent; Poverty rate: 23.3%; Per capita funding for population in poverty: $161; Total obligations in FY 2010: $386,700,574; Total population 2006-2010: 10,756,721; Total population in poverty 2006-2010: 2,394,825; Number of counties 2006-2010: 455. Nonmetro county poverty rate: 30 and higher; Poverty rate: 34.2%; Per capita funding for population in poverty: $223; Total obligations in FY 2010: $115,949,407; Total population 2006-2010: 1,591,369; Total population in poverty 2006-2010: 519,652; Number of counties 2006-2010: 83. Nonmetro county poverty rate: For all nonmetro; Poverty rate: 16.5%; Per capita funding for population in poverty: $184; Total obligations in FY 2010: $1,482,480,656[A]; Total population 2006-2010: 50,693,527; Total population in poverty 2006-2010: 8,070,874; Number of counties 2006-2010: 2,048[B]. Sources: U.S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development data. Note: These poverty and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed. [A] The total for this column—approximately $1.5 billion for economic development grants for nonmetro counties—does not match the amount on slide 6 of $5.2 billion for these grants. The $5.2 billion amount is the fiscal year 2010 appropriation amount for the programs in this analysis for all counties, and the $1.5 billion is the obligation total in fiscal year 2010 for those programs going to recipients in nonmetro counties. [B] The 2,048 nonmetro counties represent the counties for which we were able to match poverty and unemployment data from the 2010 American Community Survey 5-year estimates. Of the 2,048 nonmetro counties, there were 423 with no record of fiscal year 2010 obligations for our selected economic development grant programs in the U.S. Department of Agriculture (USDA) Economic Research Service Federal Funds data. [End of table] Economic Development Grant Obligations and Unemployment Rates for Nonmetro Counties: Table 4: Economic Development Grant Obligations and Unemployment Rates by Nonmetro County: Nonmetro county unemployment rate: Less than 5 percent; Unemployment rate 2006-2010: 3.8%; Per capita funding for unemployed population: $1,507; Total obligations in FY 2010: $170,460,785; Total population 2006-2010: 5,726,752; Total unemployed population 2006-2010: 113,138; Number of counties: 524. Nonmetro county unemployment rate: 5 to 9.9 percent; Unemployment rate 2006-2010: 7.5%; Per capita funding for unemployed population: $713; Total obligations in FY 2010: $849,883,448; Total population 2006-2010: 33,432,195; Total unemployed population 2006-2010: 1,191,540; Number of counties: 1,085. Nonmetro county unemployment rate: 10 to 14.9 percent; Unemployment rate 2006-2010: 11.5%; Per capita funding for unemployed population: $639; Total obligations in FY 2010: $338,177,440; Total population 2006-2010: 10,346,565; Total unemployed population 2006-2010: 528,904; Number of counties: 360. Nonmetro county unemployment rate: 15 to 19.9 percent; Unemployment rate 2006-2010: 16.5%; Per capita funding for unemployed population: $1,094; Total obligations in FY 2010: $80,181,606; Total population 2006-2010: 1,091,439; Total unemployed population 2006-2010: 73,280; Number of counties: 60. Nonmetro county unemployment rate: 20 percent or higher; Unemployment rate 2006-2010: 22.2%; Per capita funding for unemployed population: $2,678; Total obligations in FY 2010: $43,777,378; Total population 2006-2010: 186,576; Total unemployed population 2006-2010: 16,345; Number of counties: 19. Nonmetro county unemployment rate: For all nonmetro counties; Unemployment rate 2006-2010: 8.0%; Per capita funding for unemployed population: $771; Total obligations in FY 2010: $1,482,480,656[A]; Total population 2006-2010: 50,693,527; Total unemployed population 2006-2010: 1,923,207; Number of counties: 2,048[B]. Sources: U.S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development data. Note: These unemployment and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed, with one exception. For counties with an unemployment rate of 20 percent or higher, we are 95 percent confident that the estimates are within plus or minus 6.4 percentage points of what we would have obtained if the entire population had been surveyed. The 2010 unemployment rate is a period estimate based on data collected from 2006 to 2010. The counties with an unemployment rate of 20 or higher include several counties in states including, for example, Alaska, South Dakota, and Mississippi. [A] The total for this column—approximately $1.5 billion for economic development grants for nonmetro counties—does not match the amount on slide 6 of $5.2 billion for these grants. The $5.42 billion amount is the fiscal year 2010 appropriation amount for the programs in this analysis for all counties, and the $1.5 billion is the obligation total in fiscal year 2010 for those programs going to recipients in nonmetro counties. [B] The 2,048 nonmetro counties represent the counties for which we were able to match poverty and unemployment data from the 2010 American Community Survey 5-year estimates. Of the 2,048 nonmetro counties, there were 423 with no record of fiscal year 2010 obligations for our selected economic development grant programs in the U.S. Department of Agriculture Economic Research Service Federal Funds data. [End of table] Economic Development Grant Obligations, Poverty Rates, and County Metro Status: Table 5: Economic Development Grant Obligations, Poverty Rates, and Metro Status by County: Metro counties: Poverty rate 2006-2010: 13.3; Per capita funding for population in poverty: $112; Total obligations in FY 2010: $3,674,601,062; Total population 2006-2010:252,619,618; Total population in poverty 2006-2010: 32,740,212; Number of counties: 1,088. Nonmetro counties: Poverty rate 2006-2010: 16.5; Per capita funding for population in poverty: $184; Total obligations in FY 2010: $1,482,480,656; Total population 2006-2010:50,693,527; Total population in poverty 2006-2010: 8,070,874; Number of counties: 2,048. All counties: Poverty rate 2006-2010: 13.8%; Per capita funding for population in poverty: $126; Total obligations in FY 2010: $5,157,081,718[A]; Total population 2006-2010: 303,313,145; Total population in poverty 2006-2010: 40,811,086; Number of counties: 3,136[B]. Sources: U.S. Department of Agriculture, U.S. Census Bureau, and U.S. Department of Housing and Urban Development data. Note: These poverty and population estimates are obtained from a sample survey of respondents and are thus subject to sampling error. We are 95 percent confident that these estimates are within plus or minus 4 percentage points of what we would have obtained if the entire population had been surveyed. [A] The total for this column—approximately $5.2 billion for economic development grants—is not from the same source as the amount on slide 6 of $5.2 billion for these grants. The amount on page 3 is the fiscal year 2010 appropriation amount for the programs in this analysis, and the amount on this page is the obligation total in fiscal year 2010 for those programs. [B] The 3,136 counties represent counties for which we were able to match poverty and unemployment data with the 2010 American Community Survey 5-year estimates. Of the 3,136 counties, there were 423 nonmetro counties and 160 metro counties with no record of fiscal year 2010 obligations for our selected economic development grant programs in the U.S. Department of Agriculture (USDA) Economic Research Service Federal Funds data. [End of table] [End of enclosure] Enclosure II: Selected Economic Development Programs: Agency: Commerce; Program: Economic Adjustment Assistance; Included in nonmetro county analysis; Included in city analysis. Program: Grants for Public Works & Economic Development Facilities; Included in nonmetro county analysis; Included in city analysis. Program: Trade Adjustment Assistance; Included in nonmetro county analysis; Included in city analysis. Program: Community Trade Adjustment Assistance; Program: Economic Development - Support for Planning Organizations; Included in nonmetro county analysis. Program: Economic Development - Technical Assistance; Included in nonmetro county analysis; Included in city analysis. Program: Minority Business Development Centers; Included in nonmetro county analysis. Program: Research and Evaluation Program; Included in nonmetro county analysis. Program: Minority Business Opportunity Committee; Included in nonmetro county analysis. Agency: HUD; Program: Community Development Block Grants (CDBG) /Entitlement Grants; Included in nonmetro county analysis; Included in city analysis. Program: CDBG/State's Program; Included in nonmetro county analysis. Program: Alaska Native/Native Hawaiian Institutions Assisting Communities; Included in nonmetro county analysis. Program: CDBG/Insular Area; Included in nonmetro county analysis. Program: Sustainable Communities Regional Planning Grant Program; Included in nonmetro county analysis. Agency: SBA; Program: Small Business Development Center; Included in city analysis. Program: Microloan Demonstration Program; Included in nonmetro county analysis; Included in city analysis. Program: Women's Business Ownership Assistance; Included in nonmetro county analysis; Included in city analysis. Program: Microenterprise Development Grants; Included in nonmetro county analysis. Program: Veterans Entrepreneurial Training and Counseling; Included in nonmetro county analysis. Program: SCORE; Included in nonmetro county analysis. Agency: USDA; Program: Water and Waste Disposal System for Rural Communities; Included in nonmetro county analysis. Program: Community Facilities Loans and Grants; Included in nonmetro county analysis. Program: Rural Energy for America Program; Included in nonmetro county analysis. Program: Water and Waste Disposal Loans and Grants (Section 306C); Included in nonmetro county analysis. Program: Rural Business Enterprise Grants; Included in nonmetro county analysis. Program: Rural Cooperative Development Grants; Included in nonmetro county analysis. Program: Small Business Innovation Research; Included in nonmetro county analysis; Included in city analysis. Program: Technical Assistance and Training Grants; Included in nonmetro county analysis. Program: Rural Economic Development Loans and Grants; Included in nonmetro county analysis. Program: Assistance to High Energy Cost Rural Communities; Included in nonmetro county analysis. Program: Rural Business Opportunity Grants; Included in nonmetro county analysis. Program: Public Television Station Digital Transition Grant Program; Included in nonmetro county analysis. Program: Schools and Roads Grants to States; Included in nonmetro county analysis. Program: Solid Waste Management Grants; Included in nonmetro county analysis. Program: Emergency Community Water Assistance Grants; Included in nonmetro county analysis. Program: State Bulk Fuel Revolving Fund Grants; Included in nonmetro county analysis. Program: Rural Microentreprenuer Assistance Program; Included in nonmetro county analysis. Program: Grant Program to Establish a Fund for Financing Water and Wastewater Projects; Included in nonmetro county analysis. Program: Schools and Roads Grants to Counties; Included in nonmetro county analysis. Program: Empowerment Zones Program; Included in nonmetro county analysis. Program: Distant Learning and Telemedicine Loans and Grants; Included in nonmetro county analysis. Total: Included in nonmetro county analysis: 40; 9. Sources: U.S. Department of Agriculture and U.S. Department of Housing and Urban Development data and GAO-11-477R; Note: Appropriation data for these programs, which gives an indication of relative size of each program, is provided in GAO-11-477R, 43-50. [End of table] [End of enclosure] Enclosure III: Comments from the Department of Commerce: United States Department of Commerce: The Secretary of Commerce: Washington, D.C. 20230: August 30, 2012: Mr. Stanley J. Czerwinski: Director, Strategic Issues: U.S. Government Accountability Office: 441 G Street NW: Washington, DC 20548: Dear Mr. Czerwinski: The Department of Commerce appreciates the opportunity to review and comment on the U.S. Government Accountability Office (GAO) draft report entitled Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment (GAO-12-938R). Our comments are enclosed. Thank you for your work on this report. If you have any questions, please contact Jim Stowers, Acting Assistant Secretary for Legislative and Intergovernmental Affairs, at (202) 482-3663. Sincerely, Signed by: Rebecca M. Blank: Acting Secretary of Commerce: Enclosure: Department of Commerce: Economic Development Administration (EDA): Comments on Draft GAO Report Entitled: 'Federal Economic Development Grants to Communities with High Rates of Poverty and Unemployment' (GAO-12-938R): The U.S. Department of Commerce provides the following comments: In "Enclosure II: Selected Economic Development Programs, Fiscal Year 2010 Obligations," which appears on page 27, the amounts shown for EDA programs are from the Catalog of Federal Domestic Assistance (CFDA). The actual amounts for EDA obligations in FY 2010 are shown in Attachment A. Staff of the U.S. Minority Business Development Administration have reviewed the obligations for their programs-—Minority Business Development Centers and Minority Business Opportunity Committee—-on page 27 of the draft report and find the data accurate. Attachment A: CFDA #: 11.307; CFDA Program Title: Economic Adjustment Assistance; CFDA Reported (Also reported in GAO-12-938R): 352,529,191; EDA Actuals: 266,294,199. CFDA #: 11.300; CFDA Program Title: Grants for Public Works & Economic Development Facilities; CFDA Reported (Also reported in GAO-12-938R): 133,709,716; EDA Actuals: 149,103,803. CFDA #: 11.313; CFDA Program Title: Trade Adjustment Assistance for Firms; CFDA Reported (Also reported in GAO-12-938R): 40,674,738; EDA Actuals: 17,105,374. CFDA #: 11.010; CFDA Program Title: Community Trade Adjustment Assistance; CFDA Reported (Also reported in GAO-12-938R): 38,568,000; EDA Actuals: 36,768,000. CFDA #: 11.302; CFDA Program Title: Economic Development - Support for Planning Organizations; CFDA Reported (Also reported in GAO-12-938R): 31,843,916; EDA Actuals: 31,823,408. CFDA #: 11.303; CFDA Program Title: Economic Development - Technical Assistance; CFDA Reported (Also reported in GAO-12-938R): 12,463,804; EDA Actuals: 10,727,082. CFDA #: 11.312; CFDA Program Title: Research and Evaluation Program; CFDA Reported (Also reported in GAO-12-938R): 2,393,689; EDA Actuals: 2,239,909. CFDA #: 11.399; CFDA Program Title: Global Climate Change Mitigation Incentive Fund; CFDA Reported (Also reported in GAO-12-938R): [Empty]; EDA Actuals: 26,905,820. [End of enclosure] Enclosure IV: Comments from the Department of Housing and Urban Development: U.S. Department of Housing and Urban Development: Office of Community Planning and Development: Washington, DC 20410-7000: August 30, 2012: Mr. Stanley J. Czerwinski: Director, Strategic Issues: U.S. Government Accountability Office: 441 G Street, NW: Washington, DC 20548: Dear Mr. Czerwinski: Thank you for the opportunity to comment on GAO's draft report entitled "The Distribution of Federal Economic Development Grant Funds to Communities with High Rates of Poverty and Unemployment." The Department notes that much of the information in the draft report has already been conveyed to Congressional staff through a series of briefings conducted in May and July of this year. Nonetheless, HUD does provide the following comments on the draft report. Comment 1: GAO should provide more information on the method of allocation for each program so that readers understand variables that influence the allocation. For example, the program that most impacts the analysis is the Community Development Block Grant (CDBG) program. Under the CDBG program, by statute, there are two formulas for both the Entitlement and State programs and those formulas employ several variables - poverty, population, pre-1940 housing, slow population growth, and overcrowding - in different combinations and with different weighting. It is reasonable to expect that these formulas would target some toward poverty but it will not perfectly target toward poverty because it is designed to target multiple dimension of community need, not just poverty. Since unemployment is not one of the variables, it is only likely to target to unemployment if unemployment is correlated with one of the formula variables. Comment 2: GAO's conclusion that "the distribution of grant funding to cities was not consistently aligned with poverty and unemployment rates" is misleading. Analyzing the same data in a different way demonstrates that communities with higher poverty rates and high unemployment rates receive considerably more on a per capita basis than communities with low unemployment rates and low poverty rates. The tables below compare the GAO approach of using "per unemployed person" and "per person in poverty" to a per capita approach. For this report, HUD recommends that GAO present both of these approaches because they answer slightly different questions. Unemployment Rate: Less than 5 percent; Cities: Per Unemployed Person: $372; Cities: Per Capita: $10; Non-Metropolitan Counties: Per Unemployed Person: $1,507; Non-Metropolitan Counties: Per Capita: $30. Unemployment Rate: 5 to 9.9 percent; Cities: Per Unemployed Person: $438; Cities: Per Capita: $19; Non-Metropolitan Counties: Per Unemployed Person: $713; Non-Metropolitan Counties: Per Capita: $25. Unemployment Rate: 10 to 14.9 percent; Cities: Per Unemployed Person: $342; Cities: Per Capita: $22; Non-Metropolitan Counties: Per Unemployed Person: $639; Non-Metropolitan Counties: Per Capita: $33. Unemployment Rate: 15 to 19.9 percent; Cities: Per Unemployed Person: $413; Cities: Per Capita: $32; Non-Metropolitan Counties: Per Unemployed Person: $1,094; Non-Metropolitan Counties: Per Capita: $73. Unemployment Rate: 20 percent or higher; Cities: Per Unemployed Person: $531; Cities: Per Capita: $58; Non-Metropolitan Counties: Per Unemployed Person: $2,678; Non-Metropolitan Counties: Per Capita: $235. Unemployment Rate: All; Cities: Per Unemployed Person: $377; Cities: Per Capita: $23; Non-Metropolitan Counties: Per Unemployed Person: $771; Non-Metropolitan Counties: Per Capita: $29. [End of table] The Per Unemployed Person Approach answers the question, for the programs reviewed, of how much funding went per unemployed person to a community with high unemployment rate versus a community with low unemployment rate. If the policy goal is to target economic development funds evenly per unemployed person, this amount should be the same in each category. HUD's conclusion from the data provided would be that in cities, the amount per unemployed person is similar. There is more divergence for the non-metropolitan counties and this divergence may be worth exploring. However, in both cases, the jurisdictions with the highest unemployment rates receive considerably more per unemployed person than places with lower unemployment rates. In contrast, the Per Capita Approach answers the question of whether communities with high unemployment rates receive more relative to communities with low unemployment rates. This answer is very clear, for both cities and non-metropolitan counties, the places with higher unemployment rates get significantly more resources per capita than the cities and counties with lower unemployment rates. That is, places with higher unemployment rates get more money when controlling for size. Since the goal of most of the programs studied is to get funds to the most distressed places, the policy conclusion should be that overall the programs do appear to achieve that objective. A similar analysis can be done with the poverty data (presented below) and reach the same observations. Poverty Rate: Less than 10 percent; Cities: Per Unemployed Person: $109; Cities: Per Capita: $8; Non-Metropolitan Counties: Per Unemployed Person: $286; Non-Metropolitan Counties: Per Capita: $23. Poverty Rate: 10 to 19.9 percent; Cities: Per Unemployed Person: $117; Cities: Per Capita: $18; Non-Metropolitan Counties: Per Unemployed Person: $181; Non-Metropolitan Counties: Per Capita: $26. Poverty Rate: 20 to 29.9 percent; Cities: Per Unemployed Person: $119; Cities: Per Capita: $26; Non-Metropolitan Counties: Per Unemployed Person: $161; Non-Metropolitan Counties: Per Capita: $36. Poverty Rate: 30 percent or higher; Cities: Per Unemployed Person: $147; Cities: Per Capita: $49; Non-Metropolitan Counties: Per Unemployed Person: $223; Non-Metropolitan Counties: Per Capita: $73. Poverty Rate: All; Cities: Per Unemployed Person: $122; Cities: Per Capita: $23; Non-Metropolitan Counties: Per Unemployed Person: $184; Non-Metropolitan Counties: Per Capita: $29. [End of table] In sum, HUD suggests that GAO provide both analyses to provide a more complete picture of program fund targeting. Again, thank you for the opportunity to comment on this draft report. Sincerely, Signed by: Yolanda Chavez: Deputy Assistant Secretary for Grant Programs: [End of enclosure] Enclosure V: Related GAO Products: Entrepreneurial Assistance: Opportunities Exist to Improve Program Collaboration, Data-Tracking, and Performance Management. [hyperlink, http://www.gao.gov/products/GAO-12-819]. Washington, D.C.: August 23, 2012: Limited Information on the Use and Effectiveness of Tax Expenditures Could Be Mitigated through Congressional Attention. [hyperlink, http://www.gao.gov/products/GAO-12-262]. Washington, D.C.: February 29, 2012. Efficiency and Effectiveness of Fragmented Economic Development Programs Are Unclear. [hyperlink, http://www.gao.gov/products/GAO-11-477R]. Washington, D.C.: May 19, 2011. Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue. [hyperlink, http://www.gao.gov/products/GAO-11-318SP]. Washington, D.C.: March 1, 2011. Revitalization Programs: Empowerment Zones, Enterprise Communities, and Renewal Communities. [hyperlink, http://www.gao.gov/products/GAO-10-464R]. Washington, D.C.: March 12, 2010. Community Development: Federal Revitalization Programs Are Being Implemented, but Data on the Use of Tax Benefits Are Limited. [hyperlink, http://www.gao.gov/products/GAO-04-306]. Washington, D.C.: March 5, 2004: Rural Economic Development: More Assurance Is Needed That Grant Funding: Information Is Accurately Reported. [hyperlink, http://www.gao.gov/products/GAO-06-294]. Washington, D.C.: February 24, 2006. Economic Development: Multiple Federal Programs Fund Similar Economic Development Activities. [hyperlink, http://www.gao.gov/products/GAO/RCED/GGD-00-220]. Washington, D.C.: September 29, 2000. [End of enclosure] Footnotes: [1] GAO, Economic Development Programs: Efficiency and Effectiveness of Fragmented Economic Development Programs Are Unclear, [hyperlink, http://www.gao.gov/products/GAO-11-477R] (Washington, D.C.: May 19, 2011). See enclosure IV for a list of related GAO reports. [2] Tax expenditures are preferential provisions in the tax code, such as exemptions and exclusions from taxation, deductions, credits, deferral of tax liability, and preferential tax rates that result in forgone revenue for the federal government. The revenue that the government forgoes is viewed by many analysts as spending channeled through the tax system. See GAO, Limited Information on the Use and Effectiveness of Tax Expenditures Could Be Mitigated through Congressional Attention. (Washington, D.C.: Feb. 29, 2012). [3] Our analyses include $2.8 billion in CDBG/Entitlement Communities grants and $1.2 billion in CDBG/States Program grants. Recipients of both programs may undertake a wide range of activities including economic development, and improvements to community services and facilities. [4] [hyperlink, http://www.gao.gov/products/GAO-11-477R] and GAO, Economic Development: Multiple Federal Programs Fund Similar Economic Development Activities, [hyperlink, http://www.gao.gov/products/GAO/RCED/GGD-00-220] (Washington, D.C.: Sept. 29, 2000). [5] The $2.3 billion amount represents economic development grant obligations for cities with populations over 65,000 and with both poverty and unemployment data available in the U.S. Census' American Community Survey 2010 1-year estimates. The $1.5 billion amount represents economic development grant obligations for nonmetro counties with poverty and unemployment data available in the American Community Survey 5-year estimates. [6] Nonmetro counties are all areas outside metro counties. In this analysis, we use "rural" and "nonmetro" interchangeably to refer to people and places outside of metro areas. Metro counties, as defined by the Office of Management and Budget, include central counties containing one or more urbanized areas (i.e., areas with an urban center with a population of 50,000 or more); outlying counties are included if economically tied to the core counties as measured by work commuting. [7] Appropriation data for these programs, which gives an indication of relative size of each program, is provided in [hyperlink, http://www.gao.gov/products/GAO-11-477R], 43-50. [End of section] GAO’s Mission: The Government Accountability Office, the audit, evaluation, and investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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