Summary: The Economic Development Administration's (EDA) rules and regulations governing the allocation of funds and selection of projects for the first round of funding under the Local Public Works Capital Development and Investment Act of 1976 (LPW) were reviewed. The purpose of the review was to determine whether: regulations and procedures followed by EDA were in accordance with congressional intent, overall policies and procedures followed in selecting projects were adequate, computer methodology used in processing and scoring project applications was adequate, and unemployment data used in allocating funds to the States and in scoring and ranking the projects were reliable.
EDA rules and regulations governing the allocation of funds and selection of projects generally reflected the intent of Congress in passing the LPW Act. However, the lack of adequate data for unemployment and underemployment in the construction and construction-related industries prevented EDA from complying fully. The LPW Act imposed strict timeframes on EDA to develop and implement the program in order to generate employment opportunities quickly. In light of the time constraints, the selection process developed by EDA was reasonable, but problems were experienced in implementation, and selection errors were made. Data received from applicants were accepted with little more than a cursory review, errors were made in the data used in ranking and selecting projects, and inconsistent policies and procedures were followed in selecting projects. The reliability of some unemployment estimates was questionable, but the Bureau of Labor Statistics has taken and is proposing action to increase the reliability of unemployment data.
