Views on Senate Bills 45 and 807

Both Senate bill 45 and Senate bill 807 would achieve significant and much needed reform in our intergovernmental system. The narrow boundaries of Federal categorical programs and the mandates accompanying them have placed major strains on the accountablity and administrative capacities of the Federal, State, and local levels of government. Congressional passage of a grant reform bill is urgently needed. Grant consolidation, auditing simplifications, standardization of crosscutting requirements, joint funding, and integrated assistance will all enable public sector officials to target and manage resources more effectively. Both bills would establish a process to encourage the development and passage of grant consolidation proposals. Categorical grants are often too restrictive to meet the actual service needs. This causes problems as grantees attempt to reconcile grant programs with separate and, at times, conflicting standards and requirements. GAO has pointed out the need for a single audit of grant recipients on a government-wide basis. Auditing only the affected grant, and not the other grants of the recipient, results in duplication of effort and the performance of audits of grants too small to warrant more than an occasional audit. The audit focus is often too narrow to be effective in preventing unauthorized expenditures and the loss of public funds. The Office of Management and Budget issued a revision to Circular A-102 which requires the single audit and the use of a single audit guide. A single audit steering committee has been formed. The Intergovermental Audit Forums have projects underway to improve such areas as audit planning and coordination. The American Institute of Certified Pulic Accountants has established a committee to identify substandard audit work with regard to Federal grants. An increasing number of general Federal policy and administrative requirements have been attached to Federal assistance programs. These crosscutting requirements result in confusion, duplication of effort, and added administrative costs. Both bills would help strengthen joint funding. The integrated assistance approach would enable States and localities to reprogram some Federal dollars away from lower priority programs to augment reduced Federal programs in higher priority areas. A pilot program to encourage the use of productivity incentives in Federal assistance could be an integral step in promoting better use of dwindling Federal resources.