How can the Act take account of the federal goal of supporting state or local efforts and objectives and the limited agency role that accompanies this goal in traditional block grant design? When design features limit the federal agency’s ability to collect information through grantee reports, what performance measures can broadly flexible programs reasonably be expected to provide under the Act, and by what means? Variation Reflects Key Design Features

In addition to varying in the ways just described, the programs in our study differed greatly from each other in terms of a few key design features—national objectives, nature of operations, and diversity of activities—each representing an important policy choice. When objectives are purely fiscal, accountability to the federal agency focuses on fiscal matters. Nature of Operation: As a Program or a Funding Stream

A second critical feature concerns whether national objectives are to be achieved through a grant-specific operating program or simply through adding to the stream of funds supporting ongoing state or local programs. One final example of an approach to serving national objectives through state or local activities relies on the techniques embodied in the Government Performance and Results Act—that is, requiring states or localities to set performance objectives for the activities or projects they choose to support with federal funds and to report to the federal funding agency on progress toward meeting those objectives. However, collecting reliable uniform data at the national program level requires conditions—such as uniformity of activities, objectives, and measures—that are unlikely to exist under many flexible grant program designs. Even where overall performance can be measured, the amount attributable to federal funding often cannot be separated out. We have found that Congress is also likely to need descriptive information that goes beyond the general summary level to convey a sense of the variety of conditions under which the program operates and how federal funds are actually being used—for flexible grants, information that shows how grant funds fit into the context of other programs is of particular interest; information about program implementation, including whether feasibility or management problems are evident and whether the methods used to deliver services are of known or likely effectiveness; information concerning positive or negative side effects of the program; and information that will help determine whether this program’s strategy is more effective in relation to its cost than others that serve the same purpose. Although these evaluations are potentially useful for state and local program managers and providers, we found they were limited in their ability to provide information on program performance on a national level. Concluding Observations and Design Framework

Our study was prompted by interest in determining how existing flexible programs obtain information about performance as envisioned under the Results Act and what guidance we might offer with respect to (1) the treatment of such programs under the Results Act and (2) the design of future flexible programs—or redesign of existing programs—to help ensure that adequate information about performance is available. A Framework for Grant Design

Our findings suggest that the design of a flexible grant program involves choosing among policy options that, in combination, establish the degree of flexibility afforded to states or localities; the relevance of performance objectives for grantee accountability; whether accountability for performance rests at the federal, state, or local level; and prospects for measuring performance through grantee reporting. Considering design features and their implications can help policymakers ensure that accountability and information are adequately provided for, whatever type of design is selected. 2). Data on community mental health services, treatment options, and resources are also included. Nature

Provides funds to support local activities and projects. Other Sources of Information

These programs have been the subject of several nationwide and state-level evaluations. Both focused on program implementation.
Why GAO Did This Study

Pursuant to a congressional request, GAO conducted a comparative study of block grants and similar programs that give state or local governments substantial flexibility in determining how funds are to be used, focusing on: (1) examining the design characteristics of these programs that have implications for flexibility, accountability, and programs' ability to collect information about performance as envisioned in the Government Performance and Results Act; (2) identifying the kinds and sources of performance information that programs with various characteristics have utilized and the strengths and weaknesses of this information; and (3) providing guidance to legislators and agency officials concerning the information collection options available for programs with various designs.

What GAO Found

GAO noted that: (1) flexible grants are an adaptable policy tool and are found in fields from urban transit to community mental health; (2) flexible grant programs vary greatly in the kind and degree of flexibility afforded to state or local entities, distribution of accountability across levels of government, and availability of direct measures of program performance; (3) program variation reflects differences in three key design features: (a) whether national objectives for the grant are primarily performance-oriented or primarily fiscal; (b) whether the grant funds a distinct program with its own operating structure or contributes to the stream of funds supporting state or local activities; and (c) whether it supports a single major activity or diverse activities; (4) flexibility is narrowest, but accountability to the federal level clearest, in programs that focus on a single major activity and pursue national performance objectives through a distinct operating structure; (5) flexibility is broadest in programs designed with the fiscal objective of adding to the stream of funds supporting diverse state or local activities; (6) in these broadly flexible programs, the federal agency's role is limited to providing funds; (7) program direction and accountability are assigned to the state level; (8) design features also have implications for the availability of performance information; (9) although most reported simple activity or client counts, relatively few flexibility programs collected uniform data on the outcomes of state or local service activities; (10) collecting such data requires conditions that do not exist under many flexible program designs, and even where overall performance of a state or local program can be measured, the amount attributable to federal funding often cannot be separated out; (11) accordingly, flexible programs drew on other sources to obtain an overall picture of performance; (12) understanding grant design features and their implications can assist policymakers in applying the Results Act and in designing or redesigning grant programs; and (13) considering a particular program's national purpose, the federal agency role, and prospects for measuring performance attributable to the program can help agency officials and policy makers understand what program-generated information on results they can realistically expect and when alternative sources of information will be needed.