Three federal program design features appear critical: (1) objectives—whether the national objectives involved are performance-related or fiscal, (2) nature of operations—whether the grant operates as a program or a funding stream, and (3) diversity of activities—whether the grant supports a single activity or diverse activities. In combination, these features are associated with differences in flexibility, accountability, level of government that is accountable for performance, availability of performance information, and the need to draw from additional sources in order to obtain the information needed to support program decisions at the national level. Considering design features and their implications can help policymakers ensure that accountability and information needs are met. Background

Flexible grants are an adaptable policy tool and are used in fields from urban transit to community mental health. They are alike in that each addresses a national purpose but gives state or local grantees the flexibility to adapt funded activities to fit the state or local context. However, there are vast differences among them as well. Some offer flexibility within a narrow range, as do many so-called ’categorical’ programs, while others offer choice so broad that they come close to resembling revenue sharing. The “programs” supported are state or local programs. Statement  Balancing Flexibility and Accountability: Grant Program Design in Education and Other Areas programs?
Why GAO Did This Study

Pursuant to a congressional request, GAO discussed balancing flexibility and accountability in federal grant programs, focusing on education programs.

What GAO Found

GAO noted that: (1) flexible grants are an adaptable policy tool and are used in fields from urban transit to community mental health; (2) they are alike in that each addresses a national purpose but gives state or local grantees the flexibility to adapt funded activities to fit the state or local context; (3) however, there are vast differences among them as well; (4) some offer flexibility within a narrow range, as do many so-called categorical programs, while others offer choices so broad that they come close to resembling revenue sharing; (5) these differences reflect three critical design features on whether: (a) the national objectives involved are performance-related or fiscal; (b) the grant funds a distinct program or contributes to the stream of funds supporting state and local activities; and (c) it supports a single activity or diverse activities; (6) in combination, these features are associated with differences in flexibility, accountability, and the level of government that is accountable for performance; (7) combinations that produce greater flexibility lodge accountability at the state or local level and complicate the task of obtaining program-wide measures of performance through grantee reporting; (8) additional sources of information may be needed to support program decisions at the national level; and (9) considering design features and their implications can help policymakers ensure that accountability and information needs are met, whatever type of design is selected.