Community Services Block Grant Program
HHS Should Improve Oversight by Focusing Monitoring and Assistance Efforts on Areas of High Risk Gao ID: GAO-06-627 June 29, 2006The Community Services Block Grant (CSBG) provided over $600 million to states in fiscal year 2005 to support over 1,000 local antipoverty agencies. The Department of Health and Human Services's (HHS) Office of Community Services (OCS) is primarily responsible for overseeing this grant; states have oversight responsibility for local agencies. At the request of Congress, GAO is providing information on (1) HHS's compliance with federal laws and standards in overseeing states, (2) five states' efforts to monitor local agencies, and (3) federal CSBG training and technical assistance funds targeted to local agencies with problems and the results of the assistance. States were selected based on varying numbers of local agencies and grant amounts and recommendations from associations, among other criteria.
In a February 2006 letter (GAO-06-373R), GAO notified OCS that it lacked effective policies, procedures, and controls to help ensure that it fully met legal requirements for monitoring states and internal control standards. At that time, GAO also offered recommendations for improvements. OCS has responded that it intends to take actions to address each of those recommendations. In addition, GAO found that OCS did not routinely collect key information, such as results of state monitoring reports, or systematically use available information, such as state performance data, to assess the states' CSBG management risks and target monitoring efforts to states with the highest risk. All five states we visited conducted on-site monitoring of local agencies with varying frequency and performed additional oversight efforts. Two state offices visited each local agency at least once between 2003 and 2005, while the other three states visited local agencies less frequently. State officials we visited had different views on what they must do to meet the statutory requirement to visit local agencies at least once during each 3-year period, and OCS has not issued guidance interpreting this requirement. Officials in all five states also provided oversight in addition to monitoring through such activities as reviewing reports and coordinating with other federal and state programs. OCS targeted some training and technical assistance funds to local grantees with financial or management problems, but information on the results of this assistance is limited. In fiscal years 2002 through 2005, OCS designated between $666,000 and $1 million of its annual $10 million training and technical assistance funds to local agencies with problems, but had no process for strategically allocating these funds to areas of greatest need. In addition, the final reports on awarded grants indicated that some local agencies had improved, but the reports provided no information on the outcomes of assistance for nearly half of the 46 local agencies that GAO identified as being served.
RecommendationsOur 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.
Director: Team: Phone:GAO-06-627, Community Services Block Grant Program: HHS Should Improve Oversight by Focusing Monitoring and Assistance Efforts on Areas of High Risk
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
June 2006:
Community Services Block Grant Program:
HHS Should Improve Oversight by Focusing Monitoring and Assistance
Efforts on Areas of High Risk:
Community Services Block Grant Program:
GAO-06-627:
GAO Highlights:
Highlights of GAO-06-627, a report to congressional requesters
Why GAO Did This Study:
The Community Services Block Grant (CSBG) provided over $600 million to
states in fiscal year 2005 to support over 1,000 local antipoverty
agencies. The Department of Health and Human Services‘s (HHS) Office of
Community Services (OCS) is primarily responsible for overseeing this
grant; states have oversight responsibility for local agencies.
At the request of Congress, GAO is providing information on (1) HHS‘s
compliance with federal laws and standards in overseeing states, (2)
five states‘ efforts to monitor local agencies, and (3) federal CSBG
training and technical assistance funds targeted to local agencies with
problems and the results of the assistance. States were selected based
on varying numbers of local agencies and grant amounts and
recommendations from associations, among other criteria.
What GAO Found:
In a February 2006 letter (GAO-06-373R), GAO notified OCS that it
lacked effective policies, procedures, and controls to help ensure that
it fully met legal requirements for monitoring states and internal
control standards. At that time, GAO also offered recommendations for
improvements. OCS has responded that it intends to take actions to
address each of those recommendations. In addition, GAO found that OCS
did not routinely collect key information, such as results of state
monitoring reports, or systematically use available information, such
as state performance data, to assess the states‘ CSBG management risks
and target monitoring efforts to states with the highest risk.
All five states we visited conducted on-site monitoring of local
agencies with varying frequency and performed additional oversight
efforts. Two state offices visited each local agency at least once
between 2003 and 2005, while the other three states visited local
agencies less frequently. State officials we visited had different
views on what they must do to meet the statutory requirement to visit
local agencies at least once during each 3-year period, and OCS has not
issued guidance interpreting this requirement. Officials in all five
states also provided oversight in addition to monitoring through such
activities as reviewing reports and coordinating with other federal and
state programs.
OCS targeted some training and technical assistance funds to local
grantees with financial or management problems, but information on the
results of this assistance is limited. In fiscal years 2002 through
2005, OCS designated between $666,000 and $1 million of its annual $10
million training and technical assistance funds to local agencies with
problems, OCS but had no process for strategically allocating these
funds to areas of greatest need. In addition, the final reports on
awarded grants indicated that some local agencies had improved, but the
reports provided no information on the outcomes of assistance for
nearly half of the 46 local agencies that GAO identified as being
served. See figure below.
Figure: Results of Assistance to 46 Local Agencies as Reported by
Grantees, Fiscal Years 2002 through 2005:
[See PDF for Image]
Source: GAO analysis of grantee reports.
[End of Figure]
What GAO Recommends:
GAO recommends that the Assistant Secretary for Children and Families
direct OCS to conduct a risk-based assessment of state CSBG programs,
have policies and procedures to help ensure monitoring focuses on
states with the highest risk, issue guidance on state monitoring
requirements and training and technical assistance reporting, and
implement a strategic plan to guide its training and technical
assistance efforts. The agency agreed with our recommendations and has
made plans to address them.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-627].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Marnie S. Shaul at (202)
512-7215 or shaulm@gao.gov
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
OCS Lacks Internal Controls and a Risk Management Framework Needed to
Carry Out Effective Monitoring Efforts:
Frequency of State On-Site Monitoring Varied, but Selected States
Performed Other Oversight Activities:
OCS Targeted Some Training and Technical Assistance Funds to Grantees
with Problems, but Information on Results Is Limited:
Conclusions:
Recommendations for Executive Action:
Comments from the Department of Health and Human Services on Our
Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Community Services Block Grant Program HHS Needs to
Improve Monitoring of State Grantees, GAO-06-373R:
Appendix III: The Department of Health and Human Services's Response to
GAO-06-373R:
Appendix IV: Ranking of States Based on Percentage of Local CSBG
Subgrantees with Single Audit Findings:
Appendix V: Comments from the Department of Health & Human Services:
Appendix VI: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Local Agency Monitoring Visits Conducted by Select States,
2003-2005:
Table 2: Total CSBG Funds, Expenditures for Administration, and Numbers
of CSBG Staff and Local Agencies, Fiscal Year 2005:
Table 3: Office of Community Services CSBG Training and Technical
Assistance Funding, Fiscal Years 2002 to 2005:
Table 4: States Visited in Our Study:
Table 5: Single Audit Data for States Related to Findings among Local
CSBG Subgrantees Ranked by the Percentage of Agencies with Findings,
2002:
Table 6: Single Audit Data for States Related to Findings among Local
CSBG Subgrantees Ranked by the Percentage of Agencies with Findings,
2003:
Figures:
Figure 1. CSBG Network's Total Resources, Fiscal Year 2004:
Figure 2: Results of Assistance to 46 Local Agencies from Special State
Technical Assistance and Peer-to-Peer Grants as Reported by Grantees,
Fiscal Years 2002 through 2005:
Abbreviations:
ACF: Administration for Children and Families:
CAA: community action agency:
CDBG: Community Development Block Grant:
CSBG: Community Services Block Grant:
DOE: Department of Energy:
HHS: Department of Health and Human Services:
LIHEAP: Low-Income Home Energy Assistance Program:
MICA: Mid-Iowa Community Action:
NASCSP: National Association of State Community Service Programs:
OCS: Office of Community Services:
OMB: Office of Management and Budget:
ROMA: Results Oriented Management and Accountability:
SSTA: Special State Technical Assistance:
United States Government Accountability Office:
Washington, DC 20548:
June 29, 2006:
The Honorable Howard P. "Buck" McKeon:
Chairman:
Committee on Education and the Workforce:
House of Representatives:
The Honorable Michael N. Castle:
Chairman:
Subcommittee on Education Reform:
Committee on Education and the Workforce:
House of Representatives:
The Honorable John A. Boehner:
House of Representatives:
The Honorable Tom Osborne:
House of Representatives:
The Community Services Block Grant (CSBG) provided over $600 million to
states in fiscal year 2005 to support over 1,000 local antipoverty
agencies. These local agencies, predominately community action agencies
(CAA), often use CSBG to support their institutional frameworks for
providing services, including staff and facilities. They also use CSBG
dollars to leverage other public and private resources to support a
variety of activities, including Head Start programs, low-income home
energy assistance programs, and low-income housing. The Office of
Community Services (OCS) within the Department of Health and Human
Services (HHS) is primarily responsible for overseeing this block
grant, and the states are responsible for overseeing local agencies. In
our February 2006 letter to HHS (GAO-06-373R), GAO reported several
challenges that OCS faced in ensuring effective oversight of CSBG funds
and, at that time, made recommendations for improvements.
The CSBG Act requires OCS to visit several states each year to evaluate
the states' use of CSBG funds and report on its findings to the visited
states and Congress annually. The law also requires OCS to provide
training and technical assistance funds to states in order to, among
other purposes, support state monitoring efforts and improve local
programs' quality. The law requires states to visit all local agencies
at least once during each 3-year period and more often if local
agencies fail to meet state-established goals, requirements, and
standards. The Office of Management and Budget (OMB) issued guidance to
assist auditors in determining whether states are carrying out their
CSBG monitoring responsibilities to visit each local agency once every
3 years in compliance with the law. The law also requires states to
report performance data to OCS annually, such as data on the number of
people served by different antipoverty programs. Additionally, other
federal laws and standards for ensuring accountability, such as
internal control standards and the Single Audit Act, affect CSBG
management and reporting.
To better understand the efforts that OCS and states have undertaken to
oversee the use of CSBG funds, we agreed to examine (1) the extent to
which HHS's oversight of state efforts to monitor local agencies
complied with federal laws and standards, (2) the efforts selected
states have made to monitor local agencies' compliance with fiscal
requirements and performance standards, and (3) the extent to which HHS
targeted federal CSBG training and technical assistance funds to
efforts to assist local agencies with financial or management problems
and what is known about the results of the assistance.
To address the first objective, we reviewed federal laws and standards
to obtain information on OCS's requirements for providing oversight to
states, interviewed federal officials on their efforts, and obtained
available documentation on these efforts from fiscal year 2003 through
fiscal year 2005. To assess state monitoring efforts, we reviewed
federal laws and standards to obtain information on states' CSBG
oversight responsibilities and interviewed and collected documentation
from state and local officials in Illinois, Pennsylvania, Missouri,
Texas, and Washington on state oversight efforts from fiscal year 2003
through fiscal year 2005. We selected states that had, among other
characteristics, varying grant amounts and numbers of local agencies,
state administrative structures that may have allowed for collaboration
with other programs that provide funds to CAAs, varying Single Audit
results among their local agencies, and recommendations from CSBG
associations for promising oversight practices. We also obtained
information on state CSBG audit findings from auditors in the five
states. In addition, we interviewed federal and state officials in Head
Start, the Low-Income Home Energy Assistance Program (LIHEAP), and the
Community Development Block Grant Program (CDBG)--three programs from
which CAAs often receive funds--to obtain information on the degree to
which those officials collaborate with federal and state CSBG officials
with regard to oversight. Our results on selected state monitoring
efforts are not generalizable to all states. For the third objective,
we interviewed federal officials and their contractors that provide
training and technical assistance to obtain information on whether OCS
grants were targeted and how they determined that the grant-supported
efforts were effective. We also obtained and reviewed training and
technical assistance grant applications and reports for the two
programs that support efforts to assist local agencies for fiscal year
2002 through fiscal year 2005 to assess these efforts and their
results. Furthermore, we reviewed Single Audit data to assess the
extent to which states had local agencies with findings reported in
fiscal years 2002 and 2003, the most recent information available. All
50 states, the District of Columbia, and Puerto Rico were included in
our review of Single Audit findings. We assessed the reliability of
Single Audit and programmatic data by conducting electronic and manual
data testing and interviewing officials knowledgeable about the data.
We determined that the data were sufficiently reliable for the purposes
of this report. (See app. I for a more detailed description of the
scope and methodology of our review.) We performed our work between
July 2005 and May 2006 in accordance with generally accepted government
auditing standards.
Results in Brief:
In its efforts to oversee states, OCS lacked effective policies,
procedures, and controls to help ensure that it fully met legal
requirements for monitoring states and federal internal control
standards. OCS also lacked a process to assess states' CSBG management
risks. Although OCS met statutory requirements by visiting nine states
in fiscal years 2003 through 2005, it did not issue reports to states
and annual reports to Congress on monitoring visits, which is also
statutorily required. In addition, OCS did not meet internal controls
standards because it sent monitoring teams without adequate financial
expertise and lost documentation from state visits it conducted in
fiscal years 2003 and 2004. We notified the Assistant Secretary for
Children and Families about OCS's lack of effective CSBG monitoring
controls and offered recommendations for improvements in a letter dated
February 7, 2006. OCS has responded that it intends to take actions to
address each of our recommendations presented in the letter. In
addition to issues previously reported, we found that OCS did not
systematically use available information, such as state performance
data and audit findings, or collect key information, such as the
results of state monitoring of local grantees. Such data would allow
OCS to assess states' risk related to managing CSBG programs and target
its limited monitoring resources to states with the highest risks.
Federal officials said that they visited states after learning from
state or local officials that some grantees had management challenges,
such as financial problems or staff turnover. However, in other
instances, OCS officials could not recall their basis for selecting
states for monitoring visits.
All five states we visited conducted on-site monitoring of local
agencies with varying frequency and performed additional oversight
efforts, such as reviewing financial and programmatic reports from
local agencies. Officials in Illinois and Texas conducted at least one
on-site visit to each local agency between 2003 and 2005. However,
officials in the other three states visited their local agencies less
frequently. Pennsylvania and Washington officials monitored over 90
percent of their local agencies between 2003 and 2005. Missouri visited
about 20 percent during this time and allowed up to 5 years between
visits to some agencies. While state offices varied in the frequency of
their monitoring visits, officials in all states told us that they
visited local agencies with identified problems more often, and three
states conducted risk assessments to determine which local agencies
should receive additional visits. State officials we visited have taken
different views on what they must do to meet the legal requirement to
visit local agencies at least once during each 3-year period, and OCS
has not issued guidance interpreting this requirement. During a 2004
audit, Pennsylvania state auditors, using OMB guidance, found the state
CSBG program to be out of compliance with federal requirements because
it did not monitor local agencies once every 3 years. In contrast,
although Missouri officials visited 4 of 19 local agencies between 2003
and 2005, the state CSBG office maintains it is in compliance with
monitoring requirements because it plans to visit all local agencies
within the 3-year periods of 2001 to 2003 and 2004 to 2006. We also
found that state offices varied in their capacity to conduct monitoring
visits. Specifically, Missouri, Pennsylvania, and Washington officials
told us that challenges, such as staff shortages, affected their
ability to monitor local agencies. Nonetheless, each of the five state
programs that we visited regularly reviewed local agencies' reports,
including their community action plans, budgets, and performance data.
State CSBG officials also reviewed Single Audit reports for local
agencies when CSBG findings were mentioned. In addition, CSBG state
programs established relationships with officials in other programs
that provided funds to the same local grantees to learn the results of
other monitoring efforts. Generally, state programs offered training
and technical assistance to local agencies with findings from on-site
monitoring visits.
OCS targeted some training and technical assistance funds to local
grantees with financial and programmatic management problems, but
information on the results of this assistance is limited. In fiscal
years 2002 through 2005, OCS designated between $666,000 and $1 million
of its annual $10 million training and technical assistance funds to
local agencies with problems, but had no process in place to
strategically allocate these funds to areas of greatest need. Without
systematically tracking which local agencies experienced problems and
what those problems were, OCS did not have adequate information to
determine whether its training and technical assistance programs and
the amounts dedicated to them were appropriate for addressing the
greatest needs of local agencies and the state agencies that oversee
them. OCS currently allocates training and technical assistance funds
based on input from some state and local agencies, but this process has
not been guided by a comprehensive assessment of state and local needs.
Additionally, there is limited information on the results of OCS's
grant programs that target local agencies with problems. The final
reports on awarded grants provided no information on the outcomes of
assistance for nearly half of the 46 local agencies that we identified
as being served.
To provide better oversight of state agencies, we recommended that the
Assistant Secretary for Children and Families direct OCS to (1) conduct
a risk-based assessment of state programs by systematically collecting
and using information, (2) establish policies and procedures to help
ensure monitoring is focused on states with the highest risks, (3)
issue guidance on state responsibilities with regard to complying with
the requirement to monitor local agencies during each 3-year period,
(4) establish reporting guidance on training and technical assistance
grants that allows OCS to obtain information on outcomes for local
agencies, and (5) implement a strategic plan that will focus its
training and technical assistance efforts on areas in which states face
the greatest needs. In its written comments on a draft of this report,
HHS officials agreed with our recommendations and stated that they have
made plans to address them.
Background:
The CSBG program provides funds to state and local agencies to support
efforts that reduce poverty, revitalize low-income communities, and
lead to self-sufficiency among low-income families and
individuals.[Footnote 1] CSBG dates back to the War on Poverty of the
1960s and 1970s, which established the Community Action program, under
which the nationwide network of local community action agencies was
developed. A key feature of Community Action was the direct involvement
of low-income people in the design and administration of antipoverty
activities through mandatory representation on local agency governing
boards. The federal government had direct oversight of local agencies
until 1981, when Congress created CSBG and designated states as the
primary recipients. States subgrant funds to over 1,000 eligible local
agencies that are primarily community action agencies.
In order to ensure accountability, both federal and state program
offices have oversight responsibilities, including on-site monitoring
of grantees and subgrantees, following-up on monitoring findings, and
providing technical assistance.
Federal Role:
OCS administers CSBG and is required by law to conduct on-site
compliance evaluations of several states in each fiscal year, report to
states on the results of these evaluations, and make recommendations
for improvements. Upon receiving an evaluation report, states must
submit a plan of action that addresses recommendations. In addition,
OCS is required to annually report to Congress on the performance of
the CSBG program, including the results of state compliance
evaluations. For states to receive CSBG funding, they must submit, at
least every 2 years, an application and plan to OCS stating their
intention that funds will be used to, among other things, support
activities to help families and individuals with the following: achieve
self-sufficiency, find and retain meaningful employment, attain an
adequate education, make better use of available income, obtain
adequate housing, and achieve greater participation in community
affairs.
The CSBG Act requires OCS to reserve 1.5 percent of annual
appropriations (about $10 million in fiscal year 2005) for training and
technical assistance for state and local agencies; planning,
evaluation, and performance measurement; assisting states with carrying
out corrective action activities; and monitoring, reporting, and data
collection activities. The fiscal year 2005 Consolidated Appropriations
Act conference report directed OCS to develop a 3-year strategic plan
to guide its training and technical assistance efforts. OCS has
provided assistance to local agencies with problems primarily through
two grant programs: Special State Technical Assistance (SSTA) Grants
and the Peer-to-Peer Technical Assistance and Crisis Aversion
Intervention (Peer-to-Peer) Grants. OCS generally awarded Special State
Technical Assistance Grants to states or state associations of
community action agencies to provide support to local agencies that
have problems. Since 2001, OCS has awarded the Peer-to-Peer Grant
solely to Mid-Iowa Community Action (MICA), a community action agency,
to offer problem assessment, interim management, and other technical
assistance services to local agencies with problems.
Standards for Internal Control in the Federal Government:
In addition to the federal requirements in law, OCS, like other federal
agencies, is required to adhere to internal control standards
established by the Office of Management and Budget and GAO in order to
help ensure efficient and effective operations, reliable financial
reporting, and compliance with federal laws.[Footnote 2] Internal
controls help government program managers achieve desired results
through effective stewardship of public resources. Such interrelated
controls comprise the plans, methods, and procedures used to meet
missions, goals, and objectives and, in doing so, support performance-
based management and should provide reasonable assurance that an
organization achieves its objectives of (1) effective and efficient
operations, (2) reliable reporting, and (3) compliance with applicable
laws and regulations.
The five components of internal controls are:
* Control environment: creating a culture of accountability within an
entire organization--program offices, financial services, and regional
offices--by establishing a positive and supportive attitude toward the
achievement of established program outcomes.
* Risk assessment: identifying and analyzing relevant risks, both
internal and external, that might prevent the program from achieving
objectives, and developing processes that can be used to form a basis
for the measuring of actual or potential effects of relevant factors
and manage their risks. During such a risk assessment process, managers
should consider their reliance on other parties to perform critical
program operations.
* Control activities: establishing and implementing oversight processes
to address risk areas and help ensure that management's directives--
especially about how to mitigate and manage risks--are carried out and
program objectives are met.
* Information and communication: using and sharing relevant, reliable,
and timely operational and financial information to determine whether
the agency is meeting its performance and accountability goals.
* Monitoring: tracking improvement initiatives over time and
identifying additional actions needed to further improve program
efficiency and effectiveness.
State Role:
The CSBG Act requires each state to designate a lead agency to
administer CSBG funds and to provide oversight of local agencies that
receive funds. States are required to award at least 90 percent of
their federal block grant allotments to eligible local agencies, but
are allowed to determine how CSBG funds are distributed among local
agencies. States may use up to $55,000 or 5 percent of their CSBG
allotment, whichever is higher, for administrative costs.[Footnote 3]
States may use remaining funds for the provision of training and
technical assistance, coordination and communication activities,
payments to ensure they target funds to areas with the greatest need,
support for innovative programs and activities conducted by local
organizations, or other activities consistent with the purposes of the
CSBG Act. In addition, state and local agencies that expend $500,000 or
more ($300,000 or more prior to 2004) in total federal awards are
required under the Single Audit Act to undergo an audit annually and
submit a report to the Federal Audit Clearinghouse. Furthermore,
individual federal funding sources may also be reviewed annually under
the Single Audit, depending on the size of these expenditures.[Footnote
4]
The CSBG Act requires states to monitor local agencies to determine
whether they meet performance goals, administrative standards and
financial management and other state requirements. States are required
to perform this monitoring through a full on-site review of each local
agency at least once during each 3-year period and to conduct follow-up
reviews, including prompt return visits, to local agencies that fail to
meet the goals, standards, and requirements established by the state.
OMB has issued Single Audit compliance review guidance for CSBG that
explicitly mentions that when auditors review state programs, they
should determine whether states are visiting each local agency once
every 3 years to assess if states comply with the law. States must also
offer training and technical assistance to failing local agencies.
Local agencies are required to submit a community action plan to states
that contains a community needs assessment, a description of the
service delivery system for services provided by or coordinated with
CSBG funds, a description of how they will partner with other local
agencies to address gaps in services they provide, a description of how
funds will be coordinated with other public and private resources, and
a description of how funds will be used to support innovative community
and neighborhood-based initiatives.
The CSBG Act requires both state and local agencies to participate in a
performance measurement system. Results Oriented Management and
Accountability (ROMA) is the OCS-sponsored performance management
system that states and local agencies use to measure their performance
in achieving their CSBG goals. State agencies report annually on ROMA
using the CSBG Information System survey, which the National
Association for State Community Services Programs (NASCSP) administers.
CSBG Network Resources:
In fiscal year 2004, the network of local CSBG agencies received almost
$9.7 billion from all sources. About $7 billion of these funds came
from federal sources, including about $600 million from CSBG. Other
federal programs funding the CSBG network included Head Start, LIHEAP,
CDBG, Child Care and Development Fund, Temporary Assistance for Needy
Families, and the Social Services Block Grant (see fig. 1). HHS's
Administration for Children and Families contributed 90 percent of the
$4.4 billion in funds provided to local agencies through HHS.
Figure 1: Figure 1. CSBG Network's Total Resources, Fiscal Year 2004:
[See PDF for image]
Source: GAO analysis of data from NASCSP.
Note: Percentages do not sum to 100 because of rounding.
[End of figure]
HHS received about $637 million in CSBG funding for fiscal year 2005
and about $630 million for fiscal year 2006.
OCS Lacks Internal Controls and a Risk Management Framework Needed to
Carry Out Effective Monitoring Efforts:
In its efforts to oversee states, OCS did not fully comply with federal
laws related to monitoring states and internal control standards and
lacked a process to assess state CSBG management risks. OCS visited
nine states in fiscal years 2003 through 2005. However, as mentioned in
our letter to the Assistant Secretary for Children and Families, OCS
lacked the policies, procedures, and other internal controls to ensure
effective monitoring efforts. As a result, states and Congress are not
receiving required information on monitoring findings, and states may
not have made improvements to how they administer CSBG funds. We
recommended that the OCS director establish formal written policies and
procedures to improve OCS's monitoring and related reporting, and OCS
officials have made plans to address each of the recommendations
included in the letter. We also found that OCS did not systematically
use or collect available information that would allow it to assess
states' CSBG management risks. Officials told us that they considered a
variety of risk-related factors when selecting sites for monitoring
visits, including reports from state and local officials about
financial management problems and staff turnover, but they did not have
a systematic approach to assess risk or target monitoring toward states
with the greatest needs.
OCS Lacked Policies and Procedures to Help Ensure Effective Monitoring
of States but Plans Improvements:
OCS lacked policies, procedures, and internal controls to help ensure
effective on-site monitoring of state CSBG programs but has made plans
to address these issues. OCS officials told us they visited nine states
since 2003: Delaware, Louisiana, Maryland, and North Carolina in 2003;
Alabama and Montana in 2004; and Kentucky, New Jersey, and Washington
in 2005.[Footnote 5] During these visits, OCS officials told us they
used a monitoring tool to assess the administrative and financial
operations of state programs. However, OCS sent monitoring teams that
lacked required financial expertise to conduct evaluations of states
and did not issue final reports to states as required by law.
Consequently, the visited states may have been unaware of potential OCS
findings and, therefore, may not have developed corrective action plans
if needed. Furthermore, OCS officials also told us that they lost
documentation for the state visits conducted in fiscal years 2003 and
2004, leaving them unable to report to states they visited or perform
appropriate follow-up procedures. OCS officials did not include
information on their monitoring visits in their most recent CSBG report
to Congress, released in December 2005, as statutorily required. In
addition, OCS has not issued reports to Congress annually, as required
by law.
We reported on OCS's monitoring challenges to the Assistant Secretary
for Children and Families on February 7, 2006, and made recommendations
for improving these conditions (for a copy of this letter, see app.
II). Specifically, we recommended that the OCS director establish
formal written policies and procedures to (1) ensure that teams
conducting monitoring visits include staff with requisite skills, (2)
ensure the timely completion of monitoring reports to states, (3)
maintain and retain documentation of monitoring visits, and (4) ensure
the timely issuance of annual reports to Congress. In response to this
letter, OCS officials said that they plan to address each of our
recommendations by hiring additional monitoring staff with expertise in
financial oversight, training all staff on requirements that states
must meet prior to visits, establishing a triennial monitoring schedule
for visiting states, developing new guidelines for reporting to states
and maintaining monitoring documents, and issuing timely reports to
Congress, among other efforts. See appendix III for more details on
HHS's response to our letter.
OCS Did Not Use or Collect Available Information Needed to Assess
States' Risk of Mismanaging Their CSBG Programs:
OCS did not systematically use or collect key information that would
allow it to assess states' CSBG management risks and target its limited
monitoring resources toward states with the greatest risks. OCS
officials told us that they used a risk-based approach to select states
to visit, but we found the selection process to be ad hoc and often
unexplained. OCS officials explained that they used information
received from state and local officials on state CSBG management
concerns to decide in which states to conduct compliance evaluation
visits. For example, upon learning that local agencies in Louisiana
were concerned that they had not received all the funds allotted to
them, OCS decided to conduct an evaluation of that state. OCS officials
also mentioned that when selecting states to visit, they considered
such risk factors as staff turnover and having limited information
about the state in general. However, OCS officials could not provide an
explanation for why they visited six of the nine states that had
undergone evaluations since 2003 and had no formal, written criteria
for determining which states to visit.
Each state provides annual program performance information to OCS, but
OCS does not systematically use this information to assess states'
risks of not meeting program objectives. Specifically, states annually
provide OCS with information about the number of people receiving
services and the types of services local agencies provided and
categorize this information according to designated program goals,
which can provide OCS with data on whether state and local agencies are
performing as expected. OCS also did not systematically use information
on the amount of CSBG funds states have expended. OCS officials said
they reviewed state Single Audit reports when CSBG was included, but we
found state CSBG programs generally fell below thresholds to receive an
annual required audit.
OCS does not systematically collect other key information that would
allow federal officials to assess risk related to states' oversight
efforts and therefore cannot determine whether states are fulfilling
their requirement to visit local agencies. For example, although OCS
required states to certify that they will conduct statutorily required
on-site visits of local agencies in their CSBG applications, it did not
require states to submit documentation, such as reports on their
monitoring findings, to verify that they had conducted these visits.
OCS officials told us that they relied on state Single Audit reports to
learn which states did not comply with monitoring requirements.
However, we found these audits rarely, if ever, review state CSBG
programs. OCS officials told us that they were not aware of how rarely
CSBG is reviewed through the Single Audit.
OCS also does not systematically collect information on the local
agencies that experience management problems or on the extent to which
identified problems are being resolved. The federal CSBG director told
us that as a result, OCS may not be fully aware of the extent to which
states had local agencies facing challenges with managing CSBG. OCS is
aware of some local agencies with problems but has not established
regular methods for collecting this information. OCS officials told us
that it is the states' responsibility to identify and address problems
in local agencies. In our review of Single Audit data, we found that
financial management problems were common, with about 30 percent of
local agencies reporting findings in 2002 and 2003. However, less than
10 percent of all local agencies reported more severe findings that
could result in undetected financial reporting error and fraud, that
are material weaknesses, in either year (see app. IV for Single Audit
data).
Frequency of State On-Site Monitoring Varied, but Selected States
Performed Other Oversight Activities:
All five states we visited conducted on-site monitoring of local
agencies with varying frequency and performed additional oversight
efforts, such as reviewing financial and programmatic reports from
local agencies. The state programs that we visited had different views
on what they must do to meet federal requirements to monitor local
agencies at least once during each 3-year period, and OCS had not
issued guidance clarifying the time frames states should use when
conducting on-site visits. Specifically, officials in two states
conducted the on-site visits at least once between 2003 and 2005, but
officials in the other three states visited their local agencies less
frequently. While states varied in their frequency of monitoring
visits, all five states offices visited local agencies with identified
problems more often. Capacity to conduct on-site monitoring varied
among the five state offices, particularly in the areas of
administrative and financial monitoring resources. Officials in all
five states that we visited reviewed local agency reports as an
additional oversight effort and provided required training and
technical assistance to local agencies. In addition, some state offices
coordinated with other federal programs that fund local activities to
gain further insight into local agencies' management practices.
Frequency of On-site Visits Varied:
The frequency of on-site visits to local agencies varied among the five
states we visited, ranging from 1 to 5 years between site visits. State
CSBG offices in Illinois and Texas conducted visits to each local
agency between 2003 and 2005. Specifically, officials in these two
states visited at least half of their agencies each year. In contrast,
Pennsylvania, Missouri, and Washington officials monitored their local
agencies less frequently, with Missouri allowing up to 5 years to pass
between monitoring visits to some local agencies. Washington and
Pennsylvania officials had visited nearly all of their local agencies
from 2003 through 2005, leaving less than 10 percent unmonitored during
this period. Conversely, the Missouri state CSBG office visited 4 of 19
local agencies from 2003 to 2005, leaving nearly 80 percent of agencies
unmonitored since 2001 or 2002. While states varied in their frequency
of monitoring visits, officials in all five states told us they visited
local agencies with identified problems more often. Illinois, Texas,
and Washington assessed local agencies' management risks to prioritize
which local agencies they visited more frequently during a monitoring
cycle. Table 1 below shows how many local agencies these states
monitored with on-site CSBG reviews from 2003 through 2005.
Table 1: Local Agency Monitoring Visits Conducted by Select States,
2003-2005:
State: Illinois;
Number of local agencies: 36;
Total number of agencies reviewed[A]: 36;
Percentage of agencies reviewed: 100;
Number of agencies reviewed, 2003: 36;
Number of agencies reviewed, 2004: 36;
Number of agencies reviewed, 2005: 29.
State: Missouri;
Number of local agencies: 19;
Total number of agencies reviewed[A]: 4;
Percentage of agencies reviewed: 21;
Number of agencies reviewed, 2003: 1;
Number of agencies reviewed, 2004: 0;
Number of agencies reviewed, 2005: 4.
State: Pennsylvania;
Number of local agencies: 44;
Total number of agencies reviewed[A]: 40;
Percentage of agencies reviewed: 91;
Number of agencies reviewed, 2003: 5;
Number of agencies reviewed, 2004: 10;
Number of agencies reviewed, 2005: 25.
State: Texas;
Number of local agencies: 47;
Total number of agencies reviewed[A]: 49[B];
Percentage of agencies reviewed: 100[B];
Number of agencies reviewed, 2003: 39;
Number of agencies reviewed, 2004: 27;
Number of agencies reviewed, 2005: 34.
State: Washington;
Number of local agencies: 31;
Total number of agencies reviewed[A]: 29;
Percentage of agencies reviewed: 94;
Number of agencies reviewed, 2003: 10;
Number of agencies reviewed, 2004: 13;
Number of agencies reviewed, 2005: 11.
Source: GAO analysis of data provided by state CSBG programs.
[A] Number of agencies reviewed is not a sum total of reviews conducted
in each year, since some agencies were reviewed in multiple years.
[B] The number and percentage of agencies reviewed in Texas between
2003 and 2005 exceeds its totals because two of the local agencies
reviewed in 2003 subsequently closed.
[End of table]
Although the CSBG Act states that local agencies should be visited at
least once during each 3-year period, the state officials we visited
have different views on what is necessary to meet this requirement, and
OCS has not issued guidance to states to clarify how the law should be
interpreted. During the fiscal year 2004 Single Audit, Pennsylvania
state auditors, using OMB guidance stating that reviews of local
agencies must be conducted once every 3 years, found the state CSBG
program to be out of compliance with federal requirements. However, the
Missouri CSBG program manager stated that even though 15 local agencies
have not been visited between 2003 and 2005, according to the state's
interpretation of the CSBG law, the CSBG office will meet monitoring
requirements because all local agencies will be visited within the two
3-year periods of 2001 to 2003 and 2004 to 2006. For example, the
Missouri officials visited five agencies in 2001, during the first 3-
year period, and plan to visit these agencies again in 2006, during the
second 3-year period.
States' Capacity to Conduct On-site Monitoring Varied:
Administrative and financial monitoring resources varied in the five
states we visited. Specifically, administrative funding ranged from
less than 1 percent ($135,380) of CSBG funds in Missouri to 4 percent
($1.2 million) in Texas. The Missouri program manager told us that the
state CSBG office used less than 1 percent for administration because
state hiring restrictions prevented the CSBG program from hiring full-
time CSBG staff. In addition, state officials in Missouri,
Pennsylvania, and Washington told us that staff shortages prevented
them from visiting local agencies more frequently. The number of staff
available, funding for administration, and other related information
are shown in table 2.
Table 2: Total CSBG Funds, Expenditures for Administration, and Numbers
of CSBG Staff and Local Agencies, Fiscal Year 2005:
State: Illinois;
Number of CSBG staff[A]: 7;
Total CSBG funds: $29,934,237;
Administrative expenditures: $1,037,843;
Percentage of total CSBG funds for administration: 3.5;
Number of local agencies: 36.
State: Missouri;
Number of CSBG staff[A]: 5;
Total CSBG funds: $17,535,155;
Administrative expenditures: $135,380;
Percentage of total CSBG funds for administration: 0.8;
Number of local agencies: 19.
State: Pennsylvania;
Number of CSBG staff[A]: 7;
Total CSBG funds: $26,828,424;
Administrative expenditures: $722,311;
Percentage of total CSBG funds for administration: 2.7;
Number of local agencies: 44.
State: Texas;
Number of CSBG staff[A]: 15;
Total CSBG funds: $30,514,311;
Administrative expenditures: $1,226,817;
Percentage of total CSBG funds for administration: 4.0;
Number of local agencies: 47.
State: Washington;
Number of CSBG staff[A]: 4;
Total CSBG funds: $7,433,155;
Administrative expenditures: $214,790;
Percentage of total CSBG funds for administration: 2.9;
Number of local agencies: 31.
Source: GAO analysis of data from states, NASCSP, and HHS.
[A] Includes part-time staff paid with CSBG funds.
[End of table]
State programs generally developed and made use of written monitoring
guides, but they varied in their ability to assess local agencies'
financial operations. The five state programs we visited all had
written guides for monitoring visits that covered such areas as
financial controls, governance, personnel, performance outcomes, and
previous monitoring findings. However, state auditors in Washington
told us that the CSBG office could not provide evidence that the guides
were consistently used during monitoring visits because available
documentation showed that the guides were often incomplete after a
visit. Illinois, Texas, and Washington offices regularly used
accountants to support their reviews of local agencies' financial
operations as part of the on-site monitoring visits. Conversely,
Missouri and Pennsylvania officials told us they did not regularly
involve accountants in their monitoring efforts but had taken steps to
improve the guides they used to review local agencies' finances.
Specifically, the Missouri CSBG office, in consultation with MICA, made
changes to its monitoring guide and provided financial training to its
staff. The state CSBG office in Pennsylvania, with input from state
budget staff, revised the financial aspects of its monitoring guide.
States Made Efforts to Provide Additional Oversight of Local Agencies:
The states that we visited provided oversight in addition to on-site
monitoring through such activities as reviewing reports, coordinating
with other federal and state programs, and providing formal training
and technical assistance. All five state programs collected regular
financial and performance reports and reviewed local expenditure
reports. In addition, officials in the five states told us that they
reviewed reports of the annual Single Audits for local agencies when
they included findings related to the CSBG program. For example, a
state audit manager in Washington reviewed the audits and regularly
notified the CSBG program office when local agency findings were
identified, and state CSBG program staff followed up with local agency
officials and worked to ensure that the findings were addressed. States
also required all local agencies to submit performance data. State
officials told us that local agencies established their own performance
goals, and the state offices reviewed these goals and sometimes
modified them in consultation with local agencies. Additionally, all
state CSBG offices reviewed local community action plans.
Illinois, Texas, and Washington officials used information from these
additional oversight activities to conduct risk assessments and select
local agencies for more frequent on-site monitoring visits. In
conducting these risk assessments, the state programs considered such
factors as the amount of funds received from the state, the time since
the last monitoring visit, and any identified concerns about an
agency's competency, integrity, or proficiency. State officials told us
that they directed local agencies to use preventive training and
technical assistance to address any issues raised by risk assessments.
Three of the five state CSBG offices that we visited also coordinated
oversight activities with other federal and state programs that fund
local agencies. For example, the Missouri, Texas, and Washington
offices performed joint monitoring visits with state LIHEAP officials,
and Missouri exchanged the results of local agency monitoring visits
with the regional Head Start office. Coordination with other federal
and state programs that provide funds to local agencies, such as
housing-related programs and Head Start, generally consisted of
occasional meetings and the sharing of some information. Also, OCS and
the Head Start Bureau entered into a memorandum of understanding to
foster collaboration and improve oversight of local agencies. While
most regional and state officials told us they were aware of the
memorandum of understanding, some told us that its intent was unclear
and that they needed additional guidance to implement it more usefully.
State associations of community action agencies played an important
role in providing formal training and technical assistance to local
agencies. CSBG officials in Illinois, Missouri, Pennsylvania, and Texas
relied on state community action associations to provide technical
assistance. For example, the Illinois Community Action Association
received state training and technical assistance funds to provide on-
line resources, peer coaching, and routine conferences on a regular
basis. Missouri's state association for community action agencies, the
Missouri Association for Community Action, also received CSBG training
and technical assistance funds, which it used to help local agencies
improve communications and management information systems and provide
additional technical assistance as needed. In addition the Missouri
association provides networking opportunities for local agencies and
has a full-time training expert on staff, supported by the state CSBG
contract, to provide one-on-one support to local agencies. In addition
to training provided by the association, the Texas CSBG staff sponsored
conferences and workshops that allowed the staff members to provide
training directly to local agencies. In Washington, the association and
state staff sponsored discussion groups for the local agencies.
Additionally, during on-site monitoring visits, state CSBG officials
provided immediate informal technical assistance and follow-up with
local agencies on monitoring findings when necessary.
OCS Targeted Some Training and Technical Assistance Funds to Grantees
with Problems, but Information on Results Is Limited:
While OCS targeted some training and technical assistance funds to
local grantees with financial and programmatic management problems, the
information on results of this assistance is limited. In fiscal years
2002 through 2005, OCS designated between $666,000 and $1 million of
its annual $10 million training and technical assistance funds to local
agencies with problems, but OCS did not have information to determine
whether its training and technical assistance programs and their
funding amounts were appropriate for addressing the areas of greatest
needs. Specifically, the federal CSBG director explained that OCS
currently allocates training and technical assistance funds based on
input from some state and local agencies, but this process was not
guided by a systematic assessment of state and local needs. Information
on the results of OCS's current grant programs that target local
agencies with problems was limited. However, information provided by
progress reports for these grants showed that some of the agencies
assisted had improved.
OCS Designated $1 Million or Less of Its Annual Training and Technical
Assistance Funding to Assist Local Agencies with Problems but Does Not
Know if These Funds Addressed the Greatest Needs:
In fiscal years 2002 through 2005, OCS designated $1 million or less of
its annual $10 million training and technical assistance funds to
assist local agencies with problems, but it had no way to determine
whether this money was allocated in a way that addressed the greatest
needs of state and local agencies. OCS divided its annual $10 million
training and technical assistance funds among program support,
contracts, and grants. The Deputy Director of OCS told us that program
support funds paid salaries and expenses for OCS officials that manage
CSBG grants, and contract funds paid for costs associated with
logistics such as outreach and meeting with grantees, costs related to
a management information system, and costs related to grant
competitions. Training and technical assistance grants may be used for
a variety of purposes, and OCS allocated these funds to support
different types of activities each year. For example, OCS frequently
funded activities such as supporting the implementation of ROMA,
encouraging agencies to share innovative ideas, and providing program
and management training opportunities for community action
professionals. OCS designated between $666,000 and $1 million of annual
training and technical assistance grants to assist local agencies with
problems through two grant programs: Special State Technical Assistance
Grants and the Peer-to-Peer Technical Assistance and Crisis Aversion
Intervention Grants. These grants were commonly used to address to
management, financial, and board governance problems at local agencies.
Table 3 shows the allocation of CSBG funding for grants, contracts, and
program support.
Table 3: Office of Community Services CSBG Training and Technical
Assistance Funding, Fiscal Years 2002 to 2005:
Thousands of dollars.
Allocation type: Grants to assist local agencies with problems;
2002: $666;
2003: $845;
2004: $1,000;
2005: $900.
Allocation type: Grants to assist local agencies with problems: Special
State Technical Assistance;
2002: 366;
2003: 545;
2004: 500;
2005: 400.
Allocation type: Grants to assist local agencies with problems: Peer-to-
Peer;
2002: 300;
2003: 300;
2004: 500;
2005: 500.
Allocation type: Other grants;
2002: 6,158;
2003: 5,303;
2004: 6,215;
2005: 6,571.
Allocation type: Contracts;
2002: 1,483;
2003: 2,436;
2004: 1,432;
2005: 1,039.
Allocation type: Program support;
2002: 1,871;
2003: 1,540;
2004: 1,469;
2005: 1,557.
Totals[A];
2002: $10,218;
2003: $10,125;
2004: $10,117;
2005: $10,066.
Source: HHS Office of Community Services and GAO analysis:
[A] Column totals may not add up because of rounding.
[End of table]
Despite a congressional recommendation, OCS officials told us there is
no process in place to strategically allocate its approximately $10
million in training and technical assistance funds among program areas.
OCS drafted a strategic plan for allocating its training and technical
assistance funds--an action directed by congressional conferees in the
fiscal year 2005 Consolidated Appropriations Act conference report--but
did not implement the plan. The federal CSBG director told us that OCS
did not implement the strategic plan because the President's recent
budget proposals did not include funding for CSBG, although Congress
has continued to provide funding for the program. The federal CSBG
director also told us that the draft plan focused resources on such
areas as financial integrity and management, leadership enhancement,
and data collection.
The federal CSBG director also told us that OCS currently allocates
training and technical assistance funds based on input from some state
and local agencies, but this process was not guided by a systematic
assessment of state and local needs and did not involve guidance or
specifications on the actual amounts that should be awarded for
activities. Specifically, OCS sought input each year from the
Monitoring and Assessment Taskforce--a group made up of some state and
local CSBG officials and national CSBG associations such as the
National Association of State Community Service Programs (NASCSP)--to
generate a list of priority activities. OCS then presented this list at
national community action conferences, such as those sponsored by
NASCSP or the Community Action Partnership, for additional comments.
However, OCS does not track which local agencies experienced problems
and what those problems were. As a result, OCS could not provide us
with information on the extent to which these current efforts are
addressing those needs.
Limited Data on the Results of the Assistance Showed That Some Local
Agencies Had Improved:
Information on the results of OCS grant programs that targeted local
agencies with problems was limited. However, the available information
showed that some local agencies have improved financial and
programmatic management as a result of the assistance they received.
Our review of all available grant applications and subsequent progress
reports for SSTA and Peer-to-Peer grants identified 68 local agencies
that these grants targeted for assistance between 2002 and 2005. Of
these 68 agencies, 22 had no results available because the assistance
was ongoing and therefore final progress reports were not yet due. We
identified outcomes for 25 of the remaining 46 agencies, as shown in
figure 2. Of these 25 agencies, 18 reported improvement, and the
remaining 7 agencies had unresolved issues, had closed, or had
undeterminable results. Results were unknown for the other 21 agencies
because their grant progress reports did not include information on
outcomes.
Figure 2: Results of Assistance to 46 Local Agencies from Special State
Technical Assistance and Peer-to-Peer Grants as Reported by Grantees,
Fiscal Years 2002 through 2005:
[See PDF for image]
Source: GAO analysis of grantee progress reports.
Notes: This figure does not include does not include the 22 of the 68
agencies identified as being targeted for assistance and for which data
on results are not available because final progress reports on the
grants awarded to assist these agencies are not yet due.
Among the 18 agencies that showed improvement, 5 agencies still had
remaining challenges to address.
[End of figure]
OCS officials told us that they hold grantees accountable for
conducting activities under the proposed scope of training and
technical assistance grants, not whether these activities result in
successful outcomes for the local agencies they assist. OCS's guidance
to training and technical assistance grantees recommends that the
grantees report whether activities are completed but does not include a
requirement to report on outcomes. Further, HHS's guidance on
discretionary grant reporting, which covers CSBG training and technical
assistance grants, does not specify what information program offices
should collect on performance and outcomes. We also spoke with
officials in HHS's Office of Inspector General who mentioned that on
the basis of prior reviews the office had some concerns about the
administration of CSBG discretionary grants. Specifically, these
officials had concerns about the completeness and accuracy of progress
reports and whether grantees were meeting their goals.
Officials involved in efforts to use grants to assist agencies gave
mixed reviews on the effectiveness of activities funded by these
grants. State and local officials in Texas and Missouri spoke highly of
their interaction with MICA to assist agencies with problems. State
officials in Texas said they had used an SSTA grant to assist two local
agencies and had hired MICA as the contractor to provide the
assistance. Texas officials were pleased with the assistance that MICA
provided and said that the state did not have the resources to provide
the kind of long-term, on-site assistance that MICA offered. Missouri
officials told us that all five local agencies that the state had
contracted with MICA to work with had benefited from MICA's expertise,
particularly with regard to financial matters. Like Texas, the Missouri
office also used SSTA grants to provide assistance to four of these
agencies. In contrast, we also spoke to national, regional, and state
community action association officials who said they had worked with
local agencies that received assistance from MICA and had concerns
about MICA's work. Specifically, they told us that MICA was not always
effective in resolving local agencies' problems, did not use money
efficiently, and had an apparent conflict of interest stemming from its
practice of conducting agency assessments and offering services to
correct problems those assessments identify. For example, an Ohio
official who managed a local agency's contract told us that even with 6
months of paid assistance from MICA, the local agency had closed. In
response to these criticisms, a MICA official said that some problems
at local agencies were too severe for them to address and that MICA
tries to be transparent about its costs by issuing a detailed proposal
before starting work with an agency. Additionally, the MICA official
said that MICA and OCS officials had discussed the conflict of interest
issue, and OCS had encouraged MICA to continue efforts to assess
agencies and address their problems.
Conclusions:
Under the CSBG program, federal, state, and local agencies work
together to help low-income people achieve self-sufficiency. The
federal government's role is to oversee states' efforts to ensure that
local agencies properly and effectively use CSBG funds. OCS currently
lacks the procedures, information, and guidance to grantees that it
needs to effectively carry out its role. Specifically, OCS does not
fully use the data it collects and does not collect other key
information on state oversight efforts and the outcomes of training and
technical assistance grants that could enhance its oversight
capabilities. Additionally, OCS has not issued guidance for how often
states should visit local agencies. Thus, OCS cannot determine where
program risks exist or effectively target its limited resources to
where they would be most useful. Consequently, OCS may have missed
opportunities to monitor states facing the greatest oversight
challenges and to identify common problem areas where it could target
training and technical assistance.
Recommendations for Executive Action:
In order to provide better oversight of state agencies, we recommend
that the Assistant Secretary for Children and Families direct OCS to
take the following actions:
* Conduct a risk-based assessment of state CSBG programs by
systematically collecting and using information. This information may
include programmatic and performance data, state and local Single Audit
findings, information on state monitoring efforts and local agencies
with problems, and monitoring results from other related federal
programs that may be obtained by effectively using the memorandum of
understanding with the Head Start program and other collaborative
efforts.
* Establish policies and procedures to help ensure that its on-site
monitoring is focused on states with highest risk.
* Issue guidance on state responsibilities with regard to complying
with the requirement to monitor local agencies at least once during
each 3-year time period.
* Establish reporting guidance for training and technical grants that
would allow OCS to obtain information on the outcomes of grant-funded
activities for local agencies.
* Implement a strategic plan that will focus its training and technical
assistance efforts on the areas in which states face the greatest
needs. OCS should make use of risk assessments and its reviews of past
training and technical assistance efforts to inform the strategic plan.
Comments from the Department of Health and Human Services on Our
Evaluation:
We provided a draft of this report to the Department of Health and
Human Services and received written comments from the agency. In its
comments, HHS officials agreed with our recommendations and, in
response, have planned several changes to improve CSBG oversight.
Specifically, HHS officials stated that OCS is finalizing a risk-based
strategy to identify state and local agencies most in need of oversight
and technical assistance based on characteristics identified in state
plans, audit reports, previous monitoring and performance reports, and
reports from other programs administered by local agencies that receive
CSBG funds. HHS officials said that this strategy will result in OCS
implementing a triennial monitoring schedule they plan to have fully
operational by fiscal year 2008. HHS officials also said that by
October 1, 2006, OCS will issue guidance to state CSBG lead agencies to
clarify the states' statutory obligation to monitor all local entities
receiving CSBG funding within a 3-year period, as well as requirements
for states to execute their monitoring programs. Additionally, HHS
officials said that OCS has worked with a group of local and state CSBG
officials and national CSBG associations to develop a comprehensive
training and technical assistance strategic plan focused on issues such
as leadership, administration, fiscal controls, and data collection and
reporting. See appendix V for HHS's comments.
As agreed with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after its issue date. At that time, we will send copies of this report
to the Assistant Secretary for Children and Families, relevant
congressional committees, and other interested parties. We will also
make copies available to others upon request. In addition, the report
will be available at no charge on GAO's Web site at [Hyperlink,
http://www.gao.gov].
Please contact me at (202) 512-7215 if you or your staff have any
questions about this report. Other major contributors to this report
are listed in appendix VI.
Signed by:
Marnie S. Shaul:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To gain a better understanding of oversight efforts undertaken by state
and federal program offices to monitor the Community Services Block
Grant (CSBG) program and ensure the accountability of funds, we
examined (1) the extent to which the Department of Health and Human
(HHS) oversight of states efforts to monitor local agencies complied
with federal laws and standards, (2) the efforts selected states have
made to monitor local agencies' compliance with fiscal requirements and
performance standards, and (3) the extent to which HHS targeted federal
CSBG training and technical assistance funds to efforts to assist local
agencies with financial or management problems and what is known about
the results of the assistance.
To address the first objective, we reviewed federal laws and standards
to obtain information on the Office of Community Services's (OCS)
requirements and responsibilities for the oversight of states and
interviewed federal officials about their oversight efforts. In
addition, we obtained and reviewed available information on OCS
monitoring policies and procedures; documentation of federal monitoring
visits of states conducted during fiscal years 2003 through 2005; other
information OCS collects from states, including state applications and
performance data; and guidance issued by OCS to communicate program-
related information, concerns, and priorities to grantees to assess
OCS's compliance with laws and standards. We also reviewed available
Single Audit data for local agencies and grouped them by state to
assess the percentage of local agencies with Single Audit findings at
both the national and state levels reported in fiscal years 2002 and
2003, the most recent years for which information was available. The
scope of this review included the District of Columbia and Puerto Rico
as well as the 50 states. We assessed the reliability of Single Audit
data by performing electronic and manual data testing to assess whether
the data were complete and accurate. We also assessed the reliability
of CSBG statistical data by interviewing officials knowledgeable about
data collection and maintenance. We determined that the data were
sufficiently reliable for the purposes of this report. In addition, we
interviewed federal officials with Head Start, the Low-Income Home
Energy Assistance Program, and the Community Development Block Grant
program, which also distribute funds to local agencies, to learn
whether officials from these programs shared information with CSBG
officials to support oversight efforts.
To address the second objective, we reviewed federal laws and standards
to obtain information on states' CSBG oversight responsibilities and
conducted site visits.
We visited five states, Illinois, Missouri, Pennsylvania, Texas, and
Washington, that were selected using several criteria including grant
amounts, number of local agencies, state administrative structure, and
analysis of Single Audit results among local agencies. CSBG association
officials recommended some of these states based on promising efforts
to monitor local agencies. Table 4 provides characteristics we
considered for each state.
Table 4: States Visited in Our Study:
Criteria: Recommendations from CSBG associations;
Illinois: [Empty];
Missouri: [Empty];
Pennsylvania: [Empty];
Texas: [Empty];
Washington: [Empty].
Criteria: Size of grant (range $2.5 million - 56.5 million);
Illinois: $29,934,237;
Missouri: $17,535,155;
Pennsylvania: $26,828,424;
Texas: $30,514,311;
Washington: $7,433,155.
Criteria: Number of local agencies (Range 1-63);
Illinois: 36;
Missouri: 19;
Pennsylvania: 44;
Texas: 47;
Washington: 31.
Criteria: State administrative structure; (few: fewer than five
programs providing funds to CAAs are in the same state agency; many:
five or more);
Illinois: Few;
Missouri: Few;
Pennsylvania: Many;
Texas: Few;
Washington: Many.
Criteria: Occurrences of financial findings (above or below average
national percentage of subgrantees reporting 2003 Single Audit data);
Illinois: Below;
Missouri: Above;
Pennsylvania: Above;
Texas: Above;
Washington: Below.
Criteria: Recently monitored by HHS;
Illinois: [Empty];
Missouri: [Empty];
Pennsylvania: [Empty];
Texas: [Empty];
Washington: Yes; (FY 2005).
Criteria: Percentage of people in poverty (National Average = 12.1%);
Illinois: 11.8;
Missouri: 10.1;
Pennsylvania: 9.9;
Texas: 15.8;
Washington: 11.4.
Criteria: Census region;
Illinois: Midwest;
Missouri: Midwest;
Pennsylvania: Northeast;
Texas: South;
Washington: West.
Source: GAO analysis of data from the U.S. Census Bureau, Federal Audit
Clearinghouse, NASCSP, and the Community Action Partnership.
[End of table]
During our state site visits, we interviewed and collected information
from state and local officials in Illinois, Missouri, Pennsylvania,
Texas, and Washington about state oversight efforts from fiscal year
2003 through fiscal year 2005. Specifically, we interviewed state
program officials and reviewed related documentation including state
guidance and directives to local agencies, application instructions,
state on-site monitoring schedules, on-site monitoring guides, sample
contracts, and reporting forms for local agencies. We also visited
three local agencies in each state and interviewed staff to learn more
about state oversight and monitoring efforts, including application
processes, fiscal and performance reporting, on-site monitoring, and
training and technical assistance. In each state we visited, we
reviewed program files for six local agencies, including files for the
three we visited and three others, that included community action plans
and applications, financial and performance reports, and state
monitoring reports and follow-up correspondence. In addition, we
obtained information on state audit findings related to CSBG and met
with state auditors during site visits to learn more about additional
state oversight of CSBG and related programs and local agencies. We
also interviewed state officials in the Low-Income Home Energy
Assistance Program and the Community Development Block Grant programs,
as well as regional HHS officials, to learn whether any coordination
occurred between the programs to support state oversight efforts. Our
results on the five states that we visited are not generalizable to all
state CSBG programs.
To address the third objective, we interviewed federal officials and
contractors that provide training and technical assistance to obtain
information on the extent to which OCS grants were targeted to assist
agencies with problems and how they determined whether these efforts
were effective. We obtained and reviewed training and technical
assistance grant applications and progress reports for Special State
Technical Assistance (SSTA) Grants and Peer-to-Peer Technical
Assistance and Crisis Intervention (Peer-to-Peer) Grants for fiscal
year 2002 through fiscal year 2005 to assess efforts to assist local
agencies with problems and the results of these efforts. This review
included applications for all 39 SSTA Grants awarded during this
period, progress reports issued in 6-month intervals for the Peer-to-
Peer Grant, and available final progress reports for the SSTA Grants.
We were not able to obtain some SSTA Grant progress reports because the
assistance was still ongoing, particularly for grants issued recently.
We also interviewed a national association representative and state and
local officials to learn about the results of training and technical
assistance efforts.
We conducted our work from July 2005 through May 2006 in accordance
with generally accepted government auditing standards.
[End of section]
Appendix II: Community Services Block Grant Program: HHS Needs to
Improve Monitoring of State Grantees, GAO-06-373R:
Accountability - Integrity - Reliability:
United States Government Accountability Office:
Washington, DC 20648:
February 7, 2006:
The Honorable Wade F. Horn:
Assistant Secretary for Children and Families:
U.S. Department of Health and Human Services:
Subject: Community Services Block Grant Program: HHS Needs to Improve
Monitoring of State Grantees:
Dear Mr. Horn:
As you know, the House Committee on Education and the Workforce has
asked GAO to review the administration of the Community Services Block
Grant (CSBG) program. As part of this review, we are examining the
Department of Health and Human Services' (HHS) efforts to monitor
states' use of CSBG funds. Specifically, we have been reviewing efforts
undertaken by HHS's Office of Community Services (OCS), which has
primary responsibility for administering the CSBG program. The purpose
of this letter is to bring to your attention concerns that we have
about OCS' ability to effectively fulfill its CSBG monitoring
responsibilities.
Under the Community Services Block Grant Act, as amended, OCS is
required to evaluate several states' use of CSBG funds annually and
issue reports on the results of those evaluations to the states and
Congress. In addition, the standards pursuant to 31 U.S.C. section
3512(c), (d), commonly referred to as the Federal Managers' Financial
Integrity Act of 1982, require federal agencies to establish and
maintain internal controls to provide reasonable assurance that
agencies achieve the objectives of effective and efficient operations,
reliable financial reporting, and compliance with applicable laws and
regulations.[Footnote 6] In order to have sufficient internal controls,
managers should have policies and procedures in place that, among other
things, ensure that statutory responsibilities are fulfilled; agency
information and communications are available, reliable, and timely; and
staff have adequate training and skills.
In the course of our work to date, we found that OCS does not have the
policies, procedures, and internal controls in place needed to carry
out its monitoring efforts. Specifically, we found that:
* OCS staff that conduct monitoring visits told us they lacked the full
range of necessary skills to perform these visits, and procedures are
not in place to ensure that monitoring teams collectively have
requisite skills. Specifically, CSBG staff told us they lacked the
expertise needed to assess the financial operations of state CSBG
programs-a key component of the CSBG monitoring process.
* OCS did not issue mandatory reports on monitoring results to any of
the six states it visited during fiscal years 2003 and 2004. OCS
officials informed us that they intend to issue reports for fiscal year
2005 visits. However, 6 months after completing these visits, OCS has
yet to issue a final report to any state. Although OCS monitoring
procedures direct staff to write reports after visits and send draft
reports on their findings to state agencies for review and comment
before final issuance, the procedures do not include instructions with
regard to specific time frames for completing these steps.
* OCS cannot locate key documents pertaining to its monitoring visits
of states conducted in 2003 and 2004. Although OCS officials stated
that program files should include documentation of its monitoring
visits, we found that GCS's file management policies do not include
directions on retaining these monitoring documents. Additionally,
officials told us that staff responsible for carrying out monitoring
activities had retired and their files could not be located.
* OCS's most recent CSBG report to Congress, which covers fiscal years
2000 to 2003, did not include information on the results of its state
evaluations, as required by statute. In its previous report to
Congress, which covered fiscal year 1999, OCS provided information on
these results and acknowledged that it is statutorily obligated to do
so. Additionally, OCS has not been timely in issuing these reports and
has not submitted them annually to Congress, as required. For example,
OCS issued a consolidated report for fiscal years 2000 to 2003 in
December 2005. Officials in OCS and the Administration for Children and
Families' (ACF) Office of Legislative Affairs and Budget said that the
report was issued just recently because of time lags in receiving data
from states and the length of the agency's internal review process.
In conclusion, OCS's procedures and controls are not adequate to ensure
that it performs its monitoring responsibilities in a timely and
effective manner. As a result, states and congressional oversight
committees are not receiving information that is required under law.
States may not have made improvements to how they administer CSBG funds
because they were not made aware of findings from OCS's evaluations.
Furthermore, GCS's failure to provide timely reports that include the
results of these evaluations hinders Congress' ability to carry out its
oversight responsibilities. Also troubling is that OCS will not be able
to produce this information for the years for which monitoring
documentation has been lost. Finally, by sending staff without
sufficient expertise in financial management on monitoring visits, OCS
failed to ensure that states spent federal dollars appropriately.
In order to ensure that OCS has the internal controls to fulfill its
CSBG monitoring responsibilities, we recommend that you instruct the
director of OCS to establish formal written policies and procedures
for:
* ensuring that teams conducting monitoring visits include staff with
requisite skills,
* ensuring the timely completion of monitoring reports to states,
* maintaining and retaining documentation of monitoring visits, and
* ensuring the timely issuance of annual reports to Congress.
We met with OCS and other ACF staff on February 2, 2006 and presented
these findings. These staff had no comments on the findings but stated
that they are beginning to undertake actions intended to address issues
we raised with their monitoring efforts. In the meantime, we are
continuing our review of the CSBG program. We will include the issues
raised in this letter, and any actions that your agency has taken to
resolve them, along with the other findings in our final report. If you
or your staff have any questions about this correspondence, please
contact me at (202) 512-7215.
Sincerely yours,
Signed by:
Marnie S. Shaul:
Director, Education, Workforce, and Income Security Issues:
[End of section]
Appendix III: The Department of Health and Human Services's Response to
GAO-06-373R:
The Secretary Of Health And Human Services:
Washington, D.C. 20201:
APR 24 2006:
The Honorable David M. Walker:
Comptroller General of the United States:
Washington, DC 20548:
Dear Mr. Walker:
In accordance with the requirements of OMB Circular A-50, I acknowledge
this Department's receipt of the GAO final correspondence entitled,
"Community Services Block Grant Program: HHS Needs to Improve
Monitoring of State Grantees" (GAO-06-373R), dated February 7, 2006. I
am enclosing a copy of our comments.
Sincerely,
Signed by:
Michael O. Leavitt:
Enclosure:
Statement Of Actions Taken By The Department Of Health And Human
Services on the U.S. Government Accountability Office's Final
Correspondence Entitled. "Community Services Block Grant Program: HHS
Needs To Improve Monitoring Of State Grantees" (GAO-06-37311):
The Department of Health and Human Services (HHS) appreciates the
opportunity to update the U.S. Government Accountability Office (GAO)
on actions taken by the Administration for Children and Families since
receiving GAO's February 7, 2006, correspondence.
GAO Recommendations:
In order to ensure that the Office of Community Services (OCS) has the
internal controls to fulfill its Community Services Block Grant (CSBG)
monitoring responsibilities, we recommend that you instruct the
Director of OCS to establish formal written policies and procedures
for:
* ensuring that teams conducting monitoring visits include staff with
requisite skills,
* ensuring the timely completion of monitoring reports to states,
* maintaining and retaining documentation of monitoring visits, and:
* ensuring the timely issuance of annual reports to Congress.
HHS Comment:
Over the past year, a new Director for OCS was appointed (Josephine
Bias Robinson). She has focused considerable attention on strengthening
the administration of the CSBG program. Ms. Robinson has taken actions
to put organizational controls in place to ensure proper oversight of
the program, including clarifying staff structure and responsibilities
for program oversight and developing enhanced program management
policies and procedures to guide OCS program stewardship.
In terms of strengthening the capacity of OCS to monitor and oversee
State administration and fiscal controls for CSBG:
* OCS has been granted the authority to hire additional staff with
appropriate skills and expertise in financial management to conduct
monitoring of State authorities and to provide training and technical
assistance to improve State financial management oversight of local
agencies receiving CSBG funds. In addition, OCS has been given approval
to use additional contract support to assist in increasing the number
of on-site monitoring visits conducted this year.
* Prior to conducting monitoring reviews, staff will be trained on
Office of Management and Budget (OMB) circular requirements,
appropriations law, and CSBG program requirements.
* Through the continued use of CSBG funds available for technical
assistance, OCS will assist States in strengthening their knowledge and
use of basic financial management principles to improve their
allocation and control of funds, oversight of local agencies and
compliance with OMB and Internal Revenue Service requirements.
* We are establishing a triennial monitoring review schedule. The
monitoring reviews will be augmented through analyses of OMB Circular A-
133 audits, number and frequency of crisis agency visits, joint agency
interest with the Low Income Home Energy Assistance Program, and
regional representation.
* We are presently developing guidelines outlining the process for
conducting the monitoring reviews, for communicating the results of the
reviews to States, and for working with States to ensure corrective
action. We expect to finalize these documents no later than May 30,
2006.
* We are also developing guidelines for record maintenance and
retention of documentation of monitoring visits. We expect to complete
the guidelines no later than April 30, 2006.
* We are working on the current CSBG Report to Congress and expect that
it will be provided in a timely manner.
[End of section]
Appendix IV: Ranking of States Based on Percentage of Local CSBG
Subgrantees with Single Audit Findings:
Tables 5 and 6 present Single Audit data by state for local CSBG
agencies (i.e., community action agencies) for 2002 and 2003,
respectively. For each state, we report (1) the number of local
agencies for which Single Audit data were available, (2) the percentage
of local agencies in the state that had any type of Single Audit
finding, (3) the percentage of local agencies that had material
weakness findings,[Footnote 7] and (4) the percentage of local agencies
that had material noncompliance findings.[Footnote 8] States are ranked
in decreasing order by the percentage of local agencies in the state
that had any type of Single Audit finding.
Table 5: Single Audit Data for States Related to Findings among Local
CSBG Subgrantees Ranked by the Percentage of Agencies with Findings,
2002:
Rank: 1;
State: Puerto Rico;
Number of local agencies reporting Single Audits: 3;
Percentage of local agencies with Single Audit findings: 100;
Percentage of local agencies with material weakness findings: 33;
Percentage of local agencies with material noncompliance findings: 33.
Rank: 2;
State: New Mexico;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 75;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 3;
State: West Virginia;
Number of local agencies reporting Single Audits: 14;
Percentage of local agencies with Single Audit findings: 64;
Percentage of local agencies with material weakness findings: 36;
Percentage of local agencies with material noncompliance findings: 14.
Rank: 4;
State: Missouri;
Number of local agencies reporting Single Audits: 19;
Percentage of local agencies with Single Audit findings: 58;
Percentage of local agencies with material weakness findings: 5;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 5;
State: Wyoming;
Number of local agencies reporting Single Audits: 9;
Percentage of local agencies with Single Audit findings: 56;
Percentage of local agencies with material weakness findings: 44;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 6;
State: Maryland;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 53;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 7;
State: Connecticut;
Number of local agencies reporting Single Audits: 12;
Percentage of local agencies with Single Audit findings: 50;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 25.
Rank: 7;
State: South Dakota;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 50;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 9;
State: Louisiana;
Number of local agencies reporting Single Audits: 36;
Percentage of local agencies with Single Audit findings: 47;
Percentage of local agencies with material weakness findings: 14;
Percentage of local agencies with material noncompliance findings: 14.
Rank: 10;
State: Arizona;
Number of local agencies reporting Single Audits: 11;
Percentage of local agencies with Single Audit findings: 45;
Percentage of local agencies with material weakness findings: 9;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 10;
State: Maine;
Number of local agencies reporting Single Audits: 11;
Percentage of local agencies with Single Audit findings: 45;
Percentage of local agencies with material weakness findings: 9;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 12;
State: New Jersey;
Number of local agencies reporting Single Audits: 20;
Percentage of local agencies with Single Audit findings: 45;
Percentage of local agencies with material weakness findings: 5;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 13;
State: Pennsylvania;
Number of local agencies reporting Single Audits: 43;
Percentage of local agencies with Single Audit findings: 44;
Percentage of local agencies with material weakness findings: 9;
Percentage of local agencies with material noncompliance findings: 7.
Rank: 14;
State: Minnesota;
Number of local agencies reporting Single Audits: 36;
Percentage of local agencies with Single Audit findings: 42;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 15;
State: Indiana;
Number of local agencies reporting Single Audits: 22;
Percentage of local agencies with Single Audit findings: 41;
Percentage of local agencies with material weakness findings: 14;
Percentage of local agencies with material noncompliance findings: 14.
Rank: 16;
State: South Carolina;
Number of local agencies reporting Single Audits: 16;
Percentage of local agencies with Single Audit findings: 38;
Percentage of local agencies with material weakness findings: 19;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 17;
State: Texas;
Number of local agencies reporting Single Audits: 43;
Percentage of local agencies with Single Audit findings: 37;
Percentage of local agencies with material weakness findings: 12;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 18;
State: Alabama;
Number of local agencies reporting Single Audits: 19;
Percentage of local agencies with Single Audit findings: 37;
Percentage of local agencies with material weakness findings: 26;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 18;
State: Oklahoma;
Number of local agencies reporting Single Audits: 19;
Percentage of local agencies with Single Audit findings: 37;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 20;
State: Nevada;
Number of local agencies reporting Single Audits: 11;
Percentage of local agencies with Single Audit findings: 36;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 21;
State: Ohio;
Number of local agencies reporting Single Audits: 50;
Percentage of local agencies with Single Audit findings: 36;
Percentage of local agencies with material weakness findings: 10;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 22;
State: Arkansas;
Number of local agencies reporting Single Audits: 14;
Percentage of local agencies with Single Audit findings: 36;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 22;
State: Florida;
Number of local agencies reporting Single Audits: 28;
Percentage of local agencies with Single Audit findings: 36;
Percentage of local agencies with material weakness findings: 7;
Percentage of local agencies with material noncompliance findings: 7.
Rank: 24;
State: Georgia;
Number of local agencies reporting Single Audits: 24;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 24;
State: Iowa;
Number of local agencies reporting Single Audits: 18;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 22;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 24;
State: New Hampshire;
Number of local agencies reporting Single Audits: 6;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 17;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 24;
State: North Dakota;
Number of local agencies reporting Single Audits: 6;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 28;
State: California;
Number of local agencies reporting Single Audits: 56;
Percentage of local agencies with Single Audit findings: 32;
Percentage of local agencies with material weakness findings: 2;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 29;
State: Virginia;
Number of local agencies reporting Single Audits: 26;
Percentage of local agencies with Single Audit findings: 31;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 30;
State: Michigan;
Number of local agencies reporting Single Audits: 27;
Percentage of local agencies with Single Audit findings: 30;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 31;
State: Wisconsin;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 29;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 32;
State: Tennessee;
Number of local agencies reporting Single Audits: 18;
Percentage of local agencies with Single Audit findings: 28;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 33;
State: Illinois;
Number of local agencies reporting Single Audits: 33;
Percentage of local agencies with Single Audit findings: 27;
Percentage of local agencies with material weakness findings: 3;
Percentage of local agencies with material noncompliance findings: 3.
Rank: 34;
State: Colorado;
Number of local agencies reporting Single Audits: 35;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 35;
State: New York;
Number of local agencies reporting Single Audits: 47;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 36;
State: North Carolina;
Number of local agencies reporting Single Audits: 29;
Percentage of local agencies with Single Audit findings: 24;
Percentage of local agencies with material weakness findings: 14;
Percentage of local agencies with material noncompliance findings: 7.
Rank: 37;
State: Washington;
Number of local agencies reporting Single Audits: 25;
Percentage of local agencies with Single Audit findings: 24;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 38;
State: Mississippi;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 24;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 38;
State: Oregon;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 24;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 40;
State: Nebraska;
Number of local agencies reporting Single Audits: 9;
Percentage of local agencies with Single Audit findings: 22;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 41;
State: Montana;
Number of local agencies reporting Single Audits: 10;
Percentage of local agencies with Single Audit findings: 20;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 42;
State: Massachusetts;
Number of local agencies reporting Single Audits: 23;
Percentage of local agencies with Single Audit findings: 17;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 43;
State: Kentucky;
Number of local agencies reporting Single Audits: 21;
Percentage of local agencies with Single Audit findings: 14;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 43;
State: Utah;
Number of local agencies reporting Single Audits: 7;
Percentage of local agencies with Single Audit findings: 14;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 45;
State: Kansas;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 13;
Percentage of local agencies with material weakness findings: 13;
Percentage of local agencies with material noncompliance findings: 13.
Rank: 46;
State: Alaska;
Number of local agencies reporting Single Audits: 1;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 46;
State: Delaware;
Number of local agencies reporting Single Audits: 1;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 46;
State: Hawaii;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 46;
State: Idaho;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 46;
State: Rhode Island;
Number of local agencies reporting Single Audits: 7;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 46;
State: Vermont;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: N/A;
State: District of Columbia[A];
Number of local agencies reporting Single Audits: 0;
Percentage of local agencies with Single Audit findings: N/A;
Percentage of local agencies with material weakness findings: N/A;
Percentage of local agencies with material noncompliance findings: N/A.
State: National totals;
Number of local agencies reporting Single Audits: 969;
Percentage of local agencies with Single Audit findings: 34;
Percentage of local agencies with material weakness findings: 7;
Percentage of local agencies with material noncompliance findings: 4.
Source: GAO analysis of data from the Federal Audit Clearinghouse.
Note: Ties are noted with some states sharing ranks. Ranking was based
on percentages rounded to 1/100th, therefore the table may show other
apparent but not actual ties.
[A] Single Audit data for the local agency in the District of Columbia
were not available for fiscal year 2002.
[End of table]
Table 6: Single Audit Data for States Related to Findings among Local
CSBG Subgrantees Ranked by the Percentage of Agencies with Findings,
2003:
Rank: 1;
State: Delaware;
Number of local agencies reporting Single Audits: 1;
Percentage of local agencies with Single Audit findings: 100;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 1;
State: District of Columbia;
Number of local agencies reporting Single Audits: 1;
Percentage of local agencies with Single Audit findings: 100;
Percentage of local agencies with material weakness findings: 100;
Percentage of local agencies with material noncompliance findings: 100.
Rank: 3;
State: Puerto Rico;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 75;
Percentage of local agencies with material weakness findings: 25;
Percentage of local agencies with material noncompliance findings: 25.
Rank: 4;
State: Wyoming;
Number of local agencies reporting Single Audits: 9;
Percentage of local agencies with Single Audit findings: 67;
Percentage of local agencies with material weakness findings: 44;
Percentage of local agencies with material noncompliance findings: 22.
Rank: 5;
State: West Virginia;
Number of local agencies reporting Single Audits: 13;
Percentage of local agencies with Single Audit findings: 54;
Percentage of local agencies with material weakness findings: 31;
Percentage of local agencies with material noncompliance findings: 8.
Rank: 6;
State: Maryland;
Number of local agencies reporting Single Audits: 15;
Percentage of local agencies with Single Audit findings: 53;
Percentage of local agencies with material weakness findings: 13;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 7;
State: New Hampshire;
Number of local agencies reporting Single Audits: 6;
Percentage of local agencies with Single Audit findings: 50;
Percentage of local agencies with material weakness findings: 17;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 7;
State: South Dakota;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 50;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 9;
State: Texas;
Number of local agencies reporting Single Audits: 42;
Percentage of local agencies with Single Audit findings: 48;
Percentage of local agencies with material weakness findings: 17;
Percentage of local agencies with material noncompliance findings: 2.
Rank: 10;
State: Mississippi;
Number of local agencies reporting Single Audits: 13;
Percentage of local agencies with Single Audit findings: 46;
Percentage of local agencies with material weakness findings: 8;
Percentage of local agencies with material noncompliance findings: 15.
Rank: 11;
State: Nevada;
Number of local agencies reporting Single Audits: 11;
Percentage of local agencies with Single Audit findings: 45;
Percentage of local agencies with material weakness findings: 9;
Percentage of local agencies with material noncompliance findings: 18.
Rank: 12;
State: Louisiana;
Number of local agencies reporting Single Audits: 36;
Percentage of local agencies with Single Audit findings: 44;
Percentage of local agencies with material weakness findings: 17;
Percentage of local agencies with material noncompliance findings: 14.
Rank: 12;
State: Missouri;
Number of local agencies reporting Single Audits: 18;
Percentage of local agencies with Single Audit findings: 44;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 14;
State: New Jersey;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 41;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 15;
State: Pennsylvania;
Number of local agencies reporting Single Audits: 42;
Percentage of local agencies with Single Audit findings: 38;
Percentage of local agencies with material weakness findings: 10;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 16;
State: Virginia;
Number of local agencies reporting Single Audits: 27;
Percentage of local agencies with Single Audit findings: 37;
Percentage of local agencies with material weakness findings: 7;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 17;
State: Oklahoma;
Number of local agencies reporting Single Audits: 19;
Percentage of local agencies with Single Audit findings: 37;
Percentage of local agencies with material weakness findings: 5;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 18;
State: South Carolina;
Number of local agencies reporting Single Audits: 14;
Percentage of local agencies with Single Audit findings: 36;
Percentage of local agencies with material weakness findings: 14;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 19;
State: Alabama;
Number of local agencies reporting Single Audits: 18;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 11;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 19;
State: Arkansas;
Number of local agencies reporting Single Audits: 15;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 7;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 19;
State: New Mexico;
Number of local agencies reporting Single Audits: 6;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 19;
State: North Dakota;
Number of local agencies reporting Single Audits: 6;
Percentage of local agencies with Single Audit findings: 33;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 23;
State: Florida;
Number of local agencies reporting Single Audits: 28;
Percentage of local agencies with Single Audit findings: 32;
Percentage of local agencies with material weakness findings: 11;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 24;
State: Indiana;
Number of local agencies reporting Single Audits: 22;
Percentage of local agencies with Single Audit findings: 32;
Percentage of local agencies with material weakness findings: 14;
Percentage of local agencies with material noncompliance findings: 14.
Rank: 25;
State: Minnesota;
Number of local agencies reporting Single Audits: 35;
Percentage of local agencies with Single Audit findings: 31;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 3.
Rank: 26;
State: Ohio;
Number of local agencies reporting Single Audits: 48;
Percentage of local agencies with Single Audit findings: 31;
Percentage of local agencies with material weakness findings: 10;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 27;
State: Colorado;
Number of local agencies reporting Single Audits: 37;
Percentage of local agencies with Single Audit findings: 30;
Percentage of local agencies with material weakness findings: 8;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 28;
State: Iowa;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 29;
Percentage of local agencies with material weakness findings: 18;
Percentage of local agencies with material noncompliance findings: 6.
Rank: 29;
State: Georgia;
Number of local agencies reporting Single Audits: 22;
Percentage of local agencies with Single Audit findings: 27;
Percentage of local agencies with material weakness findings: 5;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 29;
State: Maine;
Number of local agencies reporting Single Audits: 11;
Percentage of local agencies with Single Audit findings: 27;
Percentage of local agencies with material weakness findings: 9;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 31;
State: New York;
Number of local agencies reporting Single Audits: 50;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 2.
Rank: 32;
State: Washington;
Number of local agencies reporting Single Audits: 27;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 33;
State: California;
Number of local agencies reporting Single Audits: 58;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 2;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 34;
State: Illinois;
Number of local agencies reporting Single Audits: 31;
Percentage of local agencies with Single Audit findings: 26;
Percentage of local agencies with material weakness findings: 3;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 35;
State: Arizona;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 25;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 35;
State: Connecticut;
Number of local agencies reporting Single Audits: 12;
Percentage of local agencies with Single Audit findings: 25;
Percentage of local agencies with material weakness findings: 8;
Percentage of local agencies with material noncompliance findings: 8.
Rank: 35;
State: Hawaii;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 25;
Percentage of local agencies with material weakness findings: 25;
Percentage of local agencies with material noncompliance findings: 25.
Rank: 35;
State: Michigan;
Number of local agencies reporting Single Audits: 28;
Percentage of local agencies with Single Audit findings: 25;
Percentage of local agencies with material weakness findings: 4;
Percentage of local agencies with material noncompliance findings: 4.
Rank: 35;
State: North Carolina;
Number of local agencies reporting Single Audits: 28;
Percentage of local agencies with Single Audit findings: 25;
Percentage of local agencies with material weakness findings: 11;
Percentage of local agencies with material noncompliance findings: 11.
Rank: 40;
State: Nebraska;
Number of local agencies reporting Single Audits: 9;
Percentage of local agencies with Single Audit findings: 22;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 41;
State: Montana;
Number of local agencies reporting Single Audits: 10;
Percentage of local agencies with Single Audit findings: 20;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 42;
State: Kentucky;
Number of local agencies reporting Single Audits: 21;
Percentage of local agencies with Single Audit findings: 19;
Percentage of local agencies with material weakness findings: 10;
Percentage of local agencies with material noncompliance findings: 5.
Rank: 43;
State: Wisconsin;
Number of local agencies reporting Single Audits: 17;
Percentage of local agencies with Single Audit findings: 18;
Percentage of local agencies with material weakness findings: 6;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 44;
State: Massachusetts;
Number of local agencies reporting Single Audits: 23;
Percentage of local agencies with Single Audit findings: 13;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 45;
State: Kansas;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 13;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 45;
State: Tennessee;
Number of local agencies reporting Single Audits: 16;
Percentage of local agencies with Single Audit findings: 13;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 47;
State: Oregon;
Number of local agencies reporting Single Audits: 18;
Percentage of local agencies with Single Audit findings: 11;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 48;
State: Alaska;
Number of local agencies reporting Single Audits: 1;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 48;
State: Idaho;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 48;
State: Rhode Island;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 48;
State: Utah;
Number of local agencies reporting Single Audits: 8;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
Rank: 48;
State: Vermont;
Number of local agencies reporting Single Audits: 4;
Percentage of local agencies with Single Audit findings: 0;
Percentage of local agencies with material weakness findings: 0;
Percentage of local agencies with material noncompliance findings: 0.
State: National totals;
Number of local agencies reporting Single Audits: 954;
Percentage of local agencies with Single Audit findings: 31;
Percentage of local agencies with material weakness findings: 8;
Percentage of local agencies with material noncompliance findings: 4.
Source: GAO analysis of data from the Federal Audit Clearinghouse.
Note: Ties are noted with some states sharing ranks. Ranking was based
on percentages rounded to 1/100th, therefore the table may show other
apparent but not actual ties.
[End of table]
[End of section]
Appendix V: Comments from the Department of Health & Human Services:
Department Of Health & Human Services:
Office of Inspector General:
Ms. Marnie S. Shaul:
Director, Education, Workforce and Income Security Issues:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Shaul:
Enclosed are the Department's comments on the U.S. Government
Accountability Office's (GAO) draft report entitled, "Community
Services Block Grant Program: HHS Should Improve Oversight by Focusing
Monitoring and Assistance Efforts on Areas of High Risk" (GAO-06-627).
These comments represent the tentative position of the Department and
are subject to reevaluation when the final version of this report is
received.
The Department provided several technical comments directly to your
staff.
The Department appreciates the opportunity to comment on this draft
report before its publication.
Sincerely,
Signed by:
Daniel R. Levinson:
Inspector General:
Enclosure:
The Office of Inspector General (OIG) is transmitting the Department's
response to this draft report in our capacity as the Department's
designated focal point and coordinator for U.S. Government
Accountability Office reports. OIG has not conducted an independent
assessment of these comments and therefore expresses no opinion on
them.
Comments Of The Department Of Health And Human Services On The U.S.
Government Accountability Office Draft Report Entitled, "Community
Services Block Grant Program: HHS Should Improve Oversight By Focusing
Monitoring And Assistance Efforts On Areas Of High Risk" (GAO-06-627):
The Department of Health and Human Services (HHS) appreciates the
opportunity to comment on the U.S. Government Accountability Office
(GAO) draft report.
GAO Recommendations:
In order to provide better oversight of state agencies, we recommend
that the Assistant Secretary for Children and Families direct OCS to
take the following actions:
* Conduct a risk-based assessment of state CSBG programs by
systematically collecting and using information. This information may
include programmatic and performance data, state and local Single Audit
findings, information on state monitoring efforts and local agencies
with problems; and monitoring results from other related federal
programs that may be obtained by effectively using the memorandum of
understanding with the Head Start Program and other collaborative
efforts,
* Establish policies and procedures to help ensure that its on -site
monitoring is focused on states with highest risk,
* Issue guidance on state responsibilities with regard to complying
with the requirement to monitor local agencies at least once during
each 3 - year time period;
* Establish reporting guidance for training and technical grants that
would allow OCS to obtain information on the outcomes of grant funded
activities for local agencies, and:
* Implement a strategic plan that will focus its training and technical
assistance efforts on the areas in which states face the greatest
needs. OCS should make use of risk assessments and its reviews of past
training and technical assistance efforts to inform the strategic plan.
HHS Response:
The Assistant Secretary for Children and Families, Wade F. Horn, Ph.D.,
and the Director of the Office of Community Services (OCS), Josephine
Bias Robinson, have worked diligently over the past year to strengthen
the Community Service Block Grant (CSBG) program oversight. The
Administration for Children and Families (ACF) has made great gains in
restructuring the monitoring component of the program in a way that
will improve administration, accountability and outcomes of State and
local agencies in the provision of CSBG-funded services.
In addition to the actions ACF identified in its response to the GAO
preliminary report in April 2006, (i.e., to build the capacity of the
Federal agency to better monitor State and local agencies), OCS has
initiated the following management improvements:
* A Risk-Based Triennial Schedule for OCS Monitoring of State Lead
Agencies:
OCS is finalizing a strategy to identify States and local agencies most
in need of Federal oversight and technical assistance, and to establish
a triennial schedule for monitoring State and local agencies formed by
the risk assessment characteristics. OCS is prepared to institute a
trial year of the procedure in fiscal year (FY) 2007 and to establish a
fully operational triennial schedule and methodology by FY 2008. While
the goal is for each State to receive a review within each triennial
monitoring cycle, OCS is working to focus and time the most immediate
reviews for the next 3 years based on a risk assessment of the need for
Federal oversight in the States' programs.
The characteristics that determine "risk," in State and local programs
are being culled from the State plans, audit reports, previous CSBG
monitoring and performance reports, and reports from other programs
administered by CSBG-funded local agencies (e.g., Head Start, the Low
Income Home Energy Assistance Program, etc.) and will be used to select
States for review. OCS is also communicating with CSBG State-lead
agency officials, ACF regional liaisons, and the on-going OCS-sponsored
Monitoring and Assessment Task Force. This task force is a consortium
composed of representatives from OCS, national community action
organizations, State CSBG lead-agency officials, State association
directors, and selected local agency executive directors.
* Guidance to States on Statutory Monitoring Responsibilities:
On January 13, 2006, OCS issued Information Memorandum Transmittal No.
94, which advises State CSBG authorities of their statutory obligation
to monitor local agencies and encourages them to make special efforts
to conduct monitoring and technical assistance among those agencies
that are scheduled for initial or follow-up Head Start Performance and
Registration Information Systems Management Reviews.
[Hyperlink,
http://www.acf.dhhs.gov/programs/ocs/csbg/docments/im94.html].
OCS will issue, by October 1, 2006, follow-up guidance pursuant to this
transmittal that will further clarify to State CSBG-lead agencies their
statutory obligation to monitor all local entities receiving CSBG
funding within a 3-year period, and clarify the requirements for
executing their monitoring program.
* Improved OCS Training and Technical Assistance:
OCS has worked with the Monitoring and Assessment Task Force to develop
a comprehensive strategic plan for providing training and technical
assistance to State and local CSBG-funded entities that focuses on:
* Program Leadership,
* Program Integrity-Administration and Fiscal Controls, and:
* Program Accountability-Data Collection and Reporting.
The plan has been disseminated for review and comment by all State and
local CSBG agencies.
OCS is in the process of hiring three Federal staff and two contractors
with appropriate skills and expertise in financial management to
conduct monitoring of State programs. Fiscal management staff also will
provide training and technical assistance to improve State financial
oversight of local agencies receiving CSBG funds.
OCS expects to make approximately eight grant awards by September 30,
2006, to intermediary organizations who provide technical assistance to
State and local entities in need of management, fiscal, or
administrative assistance. Awards will be made to organizations with
experience in financial management principles to help troubled CSBG
grantees improve their allocation and control o^ funds, oversight of
local agencies, and compliance with the Office of Management and Budget
and Internal Revenue Service requirements.
As indicated, ACF officials agree that there should be improvements to
Federal and State monitoring of the CSBG program. We believe that as
these modifications to improve upon the Federal and State monitoring
and oversight of the CSBG program are implemented in full, we will
strengthen the capacity and improve the management of the program to
better serve children and families in communities across the nation.
[End of section]
Appendix VI: GAO Contact and Staff Acknowledgments:
GAO Contact:
Marnie S. Shaul, (202) 512-7215, shaulm@gao.gov:
Staff Acknowledgments:
In addition to the contact named above, Bryon Gordon (Assistant
Director), Danielle Giese (Analyst-in-Charge), Janice Ceperich, Tim
Hall, and Andrew Huddleston made significant contributions to this
report. Curtis Groves, Matt Michaels, and Luann Moy provided assistance
with research methodology and data analysis. Jim Rebbe provided legal
counsel, and Jonathan McMurray and Lise Levie assisted with report
development.
[End of section]
Related GAO Products:
Community Services Block Grant Program: HHS Needs to Improve Monitoring
of State Grantees. GAO-06-373R. Washington, D.C.: February 7, 2006.
Head Start: Comprehensive Approach to Identifying and Addressing Risks
Could Help Prevent Grantee Financial Management Weaknesses. GAO-05-
465T. Washington, D.C.: April 5, 2005.
Head Start: Comprehensive Approach to Identifying and Addressing Risks
Could Help Prevent Grantee Financial Management Weaknesses. GAO-05-176.
Washington, D.C: February 28, 2005.
Internal Control Management and Evaluation Tool. GAO-01-1008G.
Washington, D.C.: August 2001.
Standards for Internal Control in the Federal Government. GAO/AIMD-00-
21.3.1. Washington: D.C.: November 1999.
Grant Programs: Design Features Shape Flexibility, Accountability, and
Performance Information. GAO/GGD-98-137. Washington, D.C.: June 22,
1998.
FOOTNOTES
[1] Territories and tribes also receive CSBG funds but were not
included in the scope of our work.
[2] For more information on internal control standards, see GAO,
Standards for Internal Control in the Federal Government, GAO/ AIMD-00-
21.3.1 (Washington: D.C.: November 1999), and Office of Management and
Budget, Circular No. A-123, Management's Responsibility for Internal
Control, (Washington: D.C.: Dec. 21, 2004).
[3] Administrative costs are not directly associated with providing
services and can include staff salaries and costs related to reporting
program data.
[4] For a specific funding source to be reviewed under a Single Audit
annually, its expenditures would have to represent between 0.15 percent
and 3 percent of the total amount of federal funds expended by a state
or local agency. The threshold varies depending on total expenditures
of federal awards.
[5] OCS also visited the Navajo Nation in 2003.
[6] For more information on internal control standards, see GAO,
Standards for Internal Control in the Federal Government, GAO/AIMD-00-
21.3.1 (Washington: D.C.: November 1999), and Office of Management and
Budget, Circular No. A-123, Management's Responsibility for Internal
Control, (Washington: D.C.: December 21, 2004).
[7] The American Institute of Certified Public Accountants (AICPA)
standards define "material weakness" as a reportable condition in which
the design or operation of one or more of the internal control
components does not reduce to a relatively low level the risk that
misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions.
[8] The Financial Audit Manual published by GAO and the President's
Council on Integrity and Efficiency (GAO-01-765G) defines "material
noncompliance" as reportable noncompliance in which a failure to comply
with laws or regulations results in misstatements that are material to
the financial statements.
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