Education Block Grant Alters State Role and Provides Greater Local Discretion

GAO reviewed states' implementation of the education block grant.

The education block grant merged 38 categorical programs, gave states greater administrative responsibilities for education programs, and altered funding levels for education programs. In addition, the block grant legislation requires states to pass at least 80 percent of their block grant funds to local education agencies. GAO found that: (1) states use various formulas to distribute funds to local agencies; (2) almost all of the states reviewed by GAO are retaining the maximum permissible percentage of block grant funds for discretionary use; and (3) some states are returning a portion of discretionary funds to local agencies. GAO also found that: (1) local agencies support a wide variety of activities with federal funds; (2) the percentage of local agencies using federal funds to support their activities has increased under the block grant; and (3) local agencies use most block grant funds for instructional materials. In addition, GAO found that: (1) states have made few organizational changes because they had a high level of administrative involvement under prior categorical programs; (2) there are numerous indications of administrative simplification under the block grant; (3) state officials state that governors and legislatures have become more involved with federal education funds under the block grant; and (4) while local agency officials view the block grant as more desirable than previous categorical programs, the views of state officials and interest groups vary as to the desirability of the block grant as a funding mechanism.