Early Observations on Block Grant Implementation

GAO examined the transition progress of 13 States to the new block grants administration as authorized by the Omnibus Budget Reconciliation Act of 1981.

The states' considerable involvement with the predecessor programs helped ease the transition to most block grants. During early implementation, a major concern was coping with budget reductions. The block grant legislation and regulations place great reliance on state oversight procedures. Early developments regarding State legislative and public involvement in block grant planning were limited by the short timeframe preceding implementation, and plans were being developed for performing audits of block grant expenditures. Thus, definite assessments of these areas cannot yet be made, but certain trends did emerge during early block grant implementation. Federal agencies have adhered to a policy of minimal involvement in block grant implementation. In several cases federal authority is limited by statute but, even where agencies have discretion, they often have passed it on to the states. Federal agencies have not prescribed standard block grant report formats or uniform data collection. GAO believes that it would be helpful in minimizing potential problems if the Office of Management and Budget, in coordination with the responsible federal agencies, assesses whether or not the crosscutting requirements apply to the block grant programs.