Summary: The tremendous growth in scope and number of Federal assistance programs in recent years has defined federalism in a new context. Issues once considered the exclusive domain of State and local governments have increasingly become national concerns. The interrelationship among Federal, State, and local governments has become more intricate as Federal funds have grown to account for about 24 percent of total State and local expenditures. The bulk of Federal assistance is provided to States and localities under about 500 programs. In addition, there are five block grant programs and general revenue sharing. Increasingly critical scrutiny is being given to the structure of Federal assistance and its impacts on State and local finances, management, and program performance and priorities. The President's recent proposals for budget cuts and block grants represent a marked departure from the way in which the Federal role has been defined in domestic policy in recent times. There are many Federal programs which could or should be turned over to State and local governments. The Federal Government can no longer afford to be involved in activities which are primarily matters of State and local government concern. However, there will always be a need for an intergovernmental approach to the solution of certain domestic problems which transcend State boundaries and resource capacities. Because intergovernmental programs will continue to exist, efforts to reform the way assistance programs are managed need to be intensified. The former Comptroller General believes that grant consolidation, Federal mandates, accountability and management control, and standardization and simplification of assistance requirements are the four major areas in need of attention. GAO has urged that the Federal asistance system be changed to correct its tendency to discourage oversight by State legislatures. The single audit concept would go far in eliminating needless duplication of audits as well as gaps in audit coverage that arise through uncoordinated audits carried out by each Federal agency. The former Comptroller General believes that legislation is needed to give a statutory base to the important reforms initiated by the Office of Management and Budget and GAO to administratively implement the single audit process. He also believes that proposals for a Convocation on Federalism or the creation of a temporary commission to examine the governance processes have merit.
