Rural Development

New Approach to Empowering Communities Needs Refinement Gao ID: RCED-97-75 March 31, 1997

Congress created the Empowerment Zone/Enterprise Community Program in 1993 to help distressed communities develop comprehensive approaches for dealing with their social and economic problems. The program is unique in its reliance upon the participating communities' own approaches and strategic plans for improvement. This report (1) estimates the federal funding levels of the rural Empowerment Zone/Enterprise Community Program over the 10-year life of the program, (2) determines the status of the program's implementation, (3) identifies the difficulties that the communities have encountered in carrying out their plans, and (4) examines the Agriculture Department's oversight of the program.

GAO noted that: (1) it estimates that federal funding for the rural EZ/EC program will total more than $1 billion over the 10-year life of the program; (2) this amount includes the $208 million in EZ/EC funds from the Social Services Block Grant (SSBG) program and an estimated $428 million from tax incentives; (3) estimates for direct funding from federal, state, and local programs as well as private sources are not generally available; (4) however, one federal agency, USDA, reports that it plans to provide about $246 million to the rural EZs and ECs over the first 4 years alone and that its funding for the 10-year life of the program could reasonably be expected to reach $600 million; (5) the status of the communities' implementation of the EZ/EC program varies; (6) all 33 rural EZs and ECs have established the basic organizational structures and procedures necessary to implement their strategic plans; (7) in terms of implementing the projects contained in these plans, such as day care services, emergency 911 services, and job training, some communities have made considerable progress and some have made very little; (8) the rural EZs and ECs have experienced a number of difficulties that have slowed their initial efforts, continue to impede their progress, or both; (9) these difficulties include the short time frames provided for applying to the program and the initial misinformation provided by officials at USDA headquarters about the program's basic operations; (10) while some of these difficulties have been or are in the process of being resolved, two issues continue to be of concern; (11) these issues are a lack of clarity about which federal regulations are applicable to the construction projects funded by EZ/EC Social Services Block Grants, and the conflict between the verbal guidance and the written guidance that the Department of Health and Human Services (HHS) has provided to the states on their responsibilities for ensuring that funds are reasonably and prudently spent; (12) under the EZ/EC program, USDA is responsible for overseeing the progress of the rural EZs and ECs and USDA is to accomplish this oversight through reviews of the periodic reports submitted by the EZs and ECs and by site visits conducted by USDA field personnel, known as EZ/EC state coordinators; (13) however, USDA cannot adequately fulfill its oversight responsibilities because the EZs, the ECs, and the EZ/EC state coordinators do not provide USDA with complete and systematic progress reports; and (14) consequently, USDA lacks the basic management information for identifying problem areas.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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