Summary: In response to a congressional request, GAO reviewed previous experience with block grants and analyzed the requirements for their effective evaluation. GAO outlined four issues raised by consolidating categorical programs into block grants and discussed early block grants, as well as 1981 block grants, in light of each issue.
In pre-1981 block grants, grantees' accountability for federal monies was insured by planning, spending, recordkeeping and reporting, and auditing requirements as specified in legislative provisions and regulations. However, the amount of flexibility grantees had under the early grants differed from block to block, and requirements increased in number and complexity over time. The block grants enacted in 1981 differ from the earlier grants by more consistently imposing certain generic categories of accountability requirements. The new grants are more detailed in their reporting and auditing provisions, but they have fewer planning and spending restrictions than earlier block grants. They also greatly limit the roles federal agencies play in program operations. The GAO review showed that block grants which were designed to serve the economically needy did in fact target services to their designated groups. There is no evidence that targeting to the poor declined over time. GAO found that consolidating the categorical programs into block grants had mixed effects on administrative costs, and the cost of administering three of the five original block grants were within the range of costs of administering categorical grants generally. The pre-1981 block grants gave Congress mixed evaluation information because the agencies' views of accountability differed under the block grant mechanism. The 1981 block grants give a less explicit role for program evaluation to the federal agencies and a greater role to the states.
