Accountability for Financial Management

The Single Audit Act of 1984 provides an important tool for ensuring that states are promoting financial accountability for block grant programs. The single audit assesses the financial integrity and internal control of the entities receiving block grant funds and implementing programs. There is no easy way to resolve this tension; rather, a continuum of trade-offs between federal objectives and state flexibility will be required. Furthermore, this approach is fraught with technical problems and could engender conflict between the federal government and the states. Under a results-oriented approach, federal policymakers would specify national goals and objectives in block grant statutes, enact a process for establishing them, or adopt some combination of the two. This will not be easy. Implications of State Involvement and Spending on Block Grant Accountability

Federal officials need to be aware of existing fiscal and programmatic state and local commitments when designing federal block grant accountability provisions.
Why GAO Did This Study

Pursuant to a congressional request, GAO provided information on the issues involved in designing accountability provisions for block grants.

What GAO Found

GAO found that: (1) building accountability into the newly proposed block grant approach is an important and difficult task, requiring trade-offs between federal and state control over program finances, activities, and administration; (2) well designed accountability provisions will help clarify the financial and programmatic relationship between the federal government and the states and is important in sustaining the maturity of the block grant approach; (3) the financial accountability provisions implemented through single audits provide a foundation for ensuring that states apply the appropriate financial management and internal controls; (4) developing and implementing guidelines for comparable data will not be easy under the results-oriented approach that states use in achieving their program objectives; and (5) it is important for federal policymakers to be aware of existing state spending and programmatic commitments in block-granted areas.