In  November 2002 the Corporation suspended enrollments in AmeriCorps. Trust Database and Participant Documentation Discrepancies Could Affect Estimates of Probable Education Award Expenditures

Discrepancies between the information in the Trust database and  participant documentation indicate that not all AmeriCorps enrollment  and exit information has been accurately recorded in the Trust database. We estimate that about 5 percent (8,300  enrollments) have a discrepancy between the Trust database and  participant documentation. Of these, about 3 percent  (4,400 enrollments)  could affect estimates of future probable expenditures of the Trust. The New Model Increased Funding Estimates and Does Not Consider External Factors

In 2003, the Corporation began using a new model to estimate the funding  needed to provide future education awards through the Trust. This new  model used conservative values that increased the Trust’s funding  estimates as compared with the previous model. However, they chose to use more conservative values  because the AmeriCorps program does not have a long history and they  wanted to regain credibility after having had to suspend enrollments in  2002. According to Corporation officials, the SAL model was used from 1996 to  2003. However, the Corporation has formed a Management  Improvement Team to examine the potential costs and benefits of  upgrading the model to account for some external factors. Operational Changes Should Reduce the Risk of Enrollment Suspensions, but Two New Policies May Hinder Service Delivery and May Contribute to Higher Balances in the Trust

The Corporation has implemented and planned substantive changes that  should minimize the risk of an enrollment suspension in the future, and it  has met or plans to meet the requirements established by the Strengthen  AmeriCorps Program Act. The Corporation has made changes to address these factors. Some Changes Have Not Been Fully Implemented

Corporation officials stated that they are planning to improve oversight of  grantees’ performance. As previously mentioned, since the passage of the  Strengthen AmeriCorps Program Act, the Corporation obligates funds for  all AmeriCorps positions when the grants are approved and prior to  participants actually enrolling. Additionally, as previously stated, we found that the Corporation has not  fully implemented its efforts to improve oversight of grantees’  performance, its procedures do not ensure accurate data in the Trust  database, and the Corporation’s ability to fully use the data on its  participants may be limited because the users’ manual for the database has  not been kept current. To enhance the accuracy of Trust budget estimates and ensure the Trust  does not accumulate large balances,     create a means to take into account the possible impact that external  factors may have on participant behavior in its funding estimates and  budget requests,    establish and execute a periodic deobligation schedule for unused Trust  review the assumptions being used in the new funding model after the  Corporation gains more experience with the new model and current  participant behavior. The act redefined what an  obligation is for purposes of the AmeriCorps program by authorizing the  Corporation to “record as an obligation an estimate of the net present  value of the national service educational award associated with the  position, based on a formula that takes into consideration historical rates  of enrollment in such a program, and of earning and using national service  educational awards for such a program.” With regard to when the  Corporation incurs a liability, the act requires the Corporation to change  its obligation practices by specifying that the Corporation obligate funds  from the Trust at the time it awards a grant approving a new participant  slot, rather than at time of enrollment.
Why GAO Did This Study

The Corporation for National and Community Service (the Corporation) was created to help meet community needs and expand educational opportunity by providing education awards to participants. The Corporation oversees and funds the AmeriCorps program as well as the National Service Trust (the Trust), which pays the education awards. From November 2002 to March 2003 the Corporation suspended AmeriCorps enrollments because there would not have been sufficient funds in the Trust to pay education awards. GAO was asked to determine (1) if all AmeriCorps enrollments were accurately recorded, (2) how the Corporation estimated its funding needs, and (3) if the Corporation made changes to prevent another enrollment suspension and to address requirements established in the Strengthen AmeriCorps Program Act. GAO analyzed laws, reviewed documents, interviewed officials, assessed the reliability of the Trust database, examined the model used to estimate funding needs, and surveyed Americorps grantees.

What GAO Found

Discrepancies between information in the Trust database and participant documentation indicate that not all AmeriCorps participant information was accurately reflected in the Trust database. An estimated 5 percent (8,300) of about 158,000 enrollments from program years 2000 to 2002 have discrepancies, and about 3 percent (4,400) have discrepancies that could affect estimates of future probable expenditures of the Trust. Further, the users' manual for the Trust database system had not been updated. In 2003 the Corporation began using a new model with conservative assumptions of participant behavior to develop its funding estimates. Corporation officials explained that they used conservative assumptions because the AmeriCorps program does not have a long history from which to extrapolate participant behavior, and the Corporation wanted to regain credibility after the enrollment suspension in 2002. Using the new model may be prudent until the Corporation gains more experience. However, because the new model increased the Trust's funding estimates, the Corporation will need to monitor actual experience compared with the model's assumptions and may need to deobligate unused Trust funds. Further, the new model does not incorporate external factors, such as downturns in the economy, which may affect funding estimates or the Trust's balances. The Corporation recently formed a team to assess the costs and benefits of adding external factors in its model. The Corporation has made some changes to its operations that minimize the likelihood it will need to suspend enrollments in the future. Corporation officials have been obligating Trust funds when positions are approved since June 2003, and the communication and coordination among officials have greatly improved. Changes have also been implemented and planned to address the Strengthen AmeriCorps Program Act requirements. However, changes to improve oversight of grantees have not been fully implemented, and policies related to refilling vacated positions and converting unfilled positions may limit enrollments, hinder service delivery, and contribute to the accumulation of a larger Trust balance.