STRENGTHENING THE PARTNERSHIP IN INTERGOVERNMENTAL SERVICE DELIVERY [ aagain if you want full text l

[David Farber <>]

          STRENGTHENING THE PARTNERSHIP
                         IN
         INTERGOVERNMENTAL SERVICE DELIVERY




                 ACCOMPANYING REPORT
                      OF THE
             NATIONAL PERFORMANCE REVIEW


             OFFICE OF THE VICE PRESIDENT


                  Washington, DC


                  September 1993






 *****************************
 This accompanying report, prepared by the staff of
 the National Performance Review (NPR), laid the
 groundwork for the recommendations in the NPR Report
 "From Red Tape to Results: Creating a Government that
 Works Better and Costs Less," released on September
 7, 1993. This report is based on the best information
 available at that time. The specific recommendations
 within these reports have been and will continue to
 be given priority as part of the FY95 Budget,
 legislative proposals, or other Administrative
 initiatives, as appropriate.
 *****************************




 CONTENTS


 Executive Summary                              1


 RECOMMENDATIONS AND ACTIONS


 FSL01:  Improve the Delivery of Federal Domestic
         Grant Programs                         7


 FSL02:  Reduce Red Tape Through Regulatory and
         Mandate Relief                         13


 FSL03:  Simplify Reimbursement Procedures for
         Administrative Costs of Federal Grant
         Disbursement                           15


 FSL04:  Eliminate Needless Paperwork by Simplifying
         the Compliance Certification Process   19


 FSL05:  Simplify Administration by Modifying the
         Common Grant Rules on Small Purchases  21


 FSL06:  Strengthen the Intergovernmental
         Partnership                            23






 APPENDICES


 A.  Summary of Actions by Implementation
     Category                                   29


 B.  Proposal for Federal-State Flexibility
     Grants Developed by Governors and State
     Legislatures                               31


 C.  Assurances--Non-Construction Programs      43


 D.  Accompanying Reports of the National
     Performance Review                         47




 IMPLEMENTATION CATEGORIES


 Each action is followed by a number in parentheses
 that indicates the necessary avenue for  effective
 implementation. Appendix A organizes all actions
 according to these categories.


 (1)  Agency heads can do themselves


 (2)  President, Executive Office of the President, or
      Office of Management and Budget can do


 (3)  Requires legislative action


 (4)  Good idea, but will require additional work, or
      may be better suited for future action






 ABBREVIATIONS


 ACIR  Advisory Commission on Intergovernmental
       Relations


 AFDC  Aid to Families with Dependent Children


 GAAP  Generally Accepted Accounting Principles


 GAO   General Accounting Office


 HHS   Department of Health and Human Services


 JOBS  Job Opportunity in Basic Skills


 JTPA  Job Training Partnership Act


 NCSL  National Conference of State Legislatures


 NGA   National Governors' Association


 NPR   National Performance Review


 OIRA  Office of Information and Regulatory Affairs


 OMB   Office of Management and Budget


 USCM  United States Conference of Mayors




 *************************






 EXECUTIVE SUMMARY




 To understand the state of intergovernmental
 relations today, consider the state of the U.S.
 Advisory Commission on Intergovernmental Relations
 (ACIR), a once-proud, federally funded institution
 that has fallen on hard times.


 Among the functions outlined in its charter, ACIR is
 supposed to bring together representatives of the
 federal, state, and local governments to discuss
 common problems; provide a forum to discuss how to
 coordinate grant and other programs requiring
 intergovernmental cooperation; provide technical
 assistance to determine how legislation in Washington
 would affect the federal system; recommend how best
 to allocate governmental functions, responsibilities,
 and revenues among levels of government; and suggest
 how to coordinate tax laws and administrative
 practices to achieve a more orderly, less competitive
 fiscal relationship among levels of government.


 Twenty years ago, ACIR was a prestigious institution
 that produced numerous analytical reports on the
 intergovernmental impact of federal policy. Its role
 was augmented by the establishment of
 intergovernmental offices in the Office of Management
 and Budget and the General Accounting Office.


 But in recent years, ACIR has lost stature,
 influence, and resources. In 1986, Congress cut
 ACIR's budget by 53 percent. Most recently, Congress
 considered eliminating all funding and sharply
 reduced it further. Today, ACIR sometimes has trouble
 attracting a quorum to its meetings.


 The ACIR's decline is just one reason--albeit a
 symbolically important one--why state and local
 officials view the federal government as unconcerned
 about the intergovernmental effects of its decisions.
 More important are the federal government's decisions
 about how much money to give states and localities,
 how to package that money in grants and other
 programs, and how to require that states and
 localities offer services that Washington cannot
 afford to provide itself.




 THE HEALTH OF THE SYSTEM IS IN QUESTION.


 The health of our intergovernmental system may strike
 some as a boring, merely philosophical matter. In
 fact, the importance of a well-functioning
 intergovernmental system can hardly be overstated. We
 cannot achieve the National Performance Review's
 (NPR) broad goals--cutting red tape, putting
 customers first, empowering employees to get results,
 and cutting back to basics--without a new approach to
 intergovernmental partnership in delivering services
 to the public.


 In addition, a well-functioning system is central to
 Americans' quality of life and Washington's ability
 to pursue a domestic policy agenda. Americans spend
 hundreds of billions of dollars each year to
 implement public policies at all levels of
 government. Hundreds of thousands of dedicated public
 employees, along with thousands of other committed
 citizens, work hard to solve human and societal
 problems, helping one another and striving to build a
 better country.


 Despite all of these efforts and money, Americans
 increasingly feel that public institutions and
 programs aren't working. In fact, serious social and
 economic problems seem to be getting worse. The
 percentage of low-birth-weight babies, the number of
 single teens having babies, and arrest rates for
 juveniles committing violent crimes are rising; the
 percentage of children graduating from high school is
 falling; welfare rolls and prison populations are
 swelling; median incomes for families with children
 are falling; more than half of children in female-
 headed households are poor; and 37 million Americans
 have no basic health care coverage or not enough.


 Why? At least part of the answer lies in an
 increasingly hidebound and paralyzed
 intergovernmental process. A significant number of
 federal domestic programs are administered through
 federal grants to state and local governments--for
 everything from wastewater treatment to well-baby
 care--or through income transfers administered
 jointly by federal and state governments. Together,
 these grant and income transfer programs will amount
 to an estimated $226.1 billion in fiscal 1994.
 Notwithstanding years of debate at all levels about
 grant consolidation and simplification, the number of
 grant programs--now more than 600--continues to
 escalate. Of these programs, 451--75 percent--are
 grants of $50 million or less.[Endnote 1]




 DUPLICATION AND OVERLAP.


 So, too, do the problems of duplication and overlap.
 Take, for instance, the case of federal programs
 designed to help children and their families. Today,
 10 departments and two independent agencies
 administer more than 140 such programs. More than 15
 percent of them are directly administered by the
 federal government, more than 40 percent by state
 governments, and another 40 percent by local,
 private, or public groups.[Endnote 2]


 Unfortunately, the myriad of federal mandates and
 regulations that accompany grant programs are
 cumbersome and very costly to administer, lack a
 coordinated implementation strategy between levels of
 government, and are not achieving the intended
 outcomes. Each separate program has its own array of
 rules and regulations that must be observed,
 regardless of their impact on the effectiveness and
 quality of customer service. States and localities
 have limited ability to customize service delivery by
 integrating programs because of competing, often
 conflicting federal rules and requirements that
 accompany each grant program.


 In Cincinnati, for instance, local officials were
 working to restore a severely blighted but historical
 area. They were using federal Community Development
 Block Grant funds in conjunction with public and
 private resources to create new and rehabilitated
 affordable housing for residents of the area. But
 when they sought to combine these activities with
 federal job training funds to hire and train
 unemployed persons in the construction industry,
 conflicting federal regulations got in the
 way.[Endnote 3]


 To the taxpayer "a tax is a tax" and "a service is a
 service" regardless of which level of government is
 responsible. Reinvention of the federal government
 must recognize this reality and must place a high
 priority on improving government management at all
 levels.




 INCREASED MANDATES.


  Meanwhile, Washington has increasingly imposed
 mandated requirements and regulations (often without
 adequate funding to cover costs) to help realize
 policy objectives. As of December 1992, at least 172
 pieces of federal legislation were imposing mandates
 on states and localities. "The federal government's
 own fiscal weakness has not made it any less eager to
 tell states and localities what to do," wrote Alice
 Rivlin. "Indeed, when its ability to make grants
 declined, the federal government turned increasingly
 to mandates as a way of controlling state and local
 activity without having to pay the bill."[Endnote 4]


 A Vision for the Future. In a perfect world, we would
 consolidate the 600 federal grant programs into broad
 funding pools, organized around major goals and
 desired outcomes--for example, safe and secure
 communities, a competitive workforce, healthy and
 self-sufficient families and children, or a clean
 environment. In addition, we would streamline
 administrative mechanisms, providing flexibility to
 account for regional differences and the diversity of
 needs; ensuring accountability by measuring
 performance and outcomes, not transactions and
 errors; and driving program design and management
 responsibility down to the point of contact between
 government and the end consumer.


 To create this perfect world, we would have to
 massively reform the existing system of
 intergovernmental grantmaking. Such a reform would
 touch every federal department and agency, every
 congressional committee and subcommittee, every
 special interest and advocacy group, and each and
 every one of the thousands of states, counties,
 cities, townships, and special purpose districts
 across the country.




 Opportunity for Change.


 Previous reform efforts, mainly designed to
 consolidate grants and reduce administrative red
 tape, have largely flopped. President Reagan achieved
 limited success in his early efforts to create a
 system of block grants, but subsequent efforts to
 expand the model to other categorical programs have
 almost universally failed.


 While the political obstacles to enacting such
 proposals continue to seem almost insurmountable, an
 opportunity for change may be at hand. Even Congress
 itself is becoming exasperated with the micromanaged
 nature of grantmaking.[Endnote 5] As one
 congressional staffer noted, "There is a tremendous
 pent-up legion of followers in Congress [and
 elsewhere] if forceful leadership is provided . . ."
 Recent actions, such as passage of the 1991
 Intermodal Surface Transportation Efficiency Act,
 demonstrate some willingness by major congressional
 committees to approach grantmaking more rationally.
 In addition, the National Governors' Association and
 the National Conference of State Legislatures have
 developed a proposed grant consolidation plan, the
 spirit of which many see as feasible to provide
 increased flexibility to states and localities.


 Even with an enthusiasm for change that breaks
 sharply with history, the federal government will not
 achieve its goals easily or quickly. We cannot
 achieve improvements solely, even primarily, through
 federal action. As a result, each partner in the
 system must work collaboratively with the others--
 federal, state, and local--to refine the concepts and
 recommendations outlined in this report. Such
 collaboration has already begun; in mid-1993,
 President Clinton and Vice President Gore held
 discussions with the nation's governors and mayors.




 Goals of Change.


 Specific solutions can be perfected and refined over
 time, but the basic needs are, and have been, clear
 for more than a decade:


 1. The number of categorical grants must be reduced;


 2. Governments at all levels (but especially the
 federal government) must reduce the degree to which
 unfunded mandates are imposed on other levels of
 government;


 3. Program rules and regulations must be
 fundamentally rethought and their focus changed from
 compliance to outcomes, from sanctions to incentives;
 and


 4. Federal interdepartmental and intergovernmental
 collaboration must be actively facilitated if any
 real improvement in government's credibility is to be
 successful.


 The federal government will have to work with states
 and localities to define a more viable federal
 partnership, find the optimal balance between
 flexibility and accountability, while simultaneously
 addressing the budget constraints imposed by the
 federal deficit.


 Federal, state, and local government attention should
 focus on mutually agreed-upon measurable outcomes for
 public service delivery. The intergovernmental
 relationship should be a partnership, not an
 adversarial or competitive system. Federal financial
 support should be provided to achieve broad goals,
 but also should provide latitude and flexibility in
 how to accomplish them and be tailored to real local
 needs. Rather than defining accountability by inputs,
 transactions, error rates, and failure to progress,
 the federal government should hold state and local
 governments accountable for performance. The system
 should support and reward what works, rather than
 imposing rules and sanctions on the majority because
 of errors or omissions by the minority.




 Recommendations.


 In this report, we offer the following five broad
 recommendations on how to improve the system:


 --improve federal grant administration through
 simultaneous bottom-up and top-down initiatives;


 --cut red tape and eliminate roadblocks by allowing
 waivers of regulations that detract from
 accomplishing program objectives or interfere with
 effective service delivery;


 --simplify cost reimbursement procedures, saving time
 and money;


 --eliminate needless paperwork by simplifying the
 compliance certification process and the common grant
 rule on small purchases; and


 --reinvent ACIR and promote collaboration between the
 federal government and its state and local partners
 across federal policymaking and administration.


 If implemented, our recommendations will result in:


 --savings in overhead and administrative costs at all
 levels;


 --much greater flexibility up and down the line to
 design solutions that work;


 --more effective concentration of limited resources;
 and most importantly


 --a much greater likelihood that federal, state, and
 local objectives will be achieved.


 ************************
 Endnotes


 1. U.S. General Accounting Office, Federal Aid
 Programs Available to State and Local Governments,
 GAO/HRD-91-93FS (Washington, D.C.: U.S. General
 Accounting Office, May 1991).


 2. Library of Congress, Congressional Research
 Service, Federal Programs for Children and Their
 Families (Washington, D.C., December 15, 1992)


 3. This occurred in the city's Betts-Longworth area.


 4. Rivlin, Alice, Reviving the American Dream
 (Washington, D.C.: The Brookings Institution, 1992),
 p. 107.


 5. See, for example, Institute for Educational
 Leadership, Solving the Maze of Federal Programs for
 Children and Families: Perspectives from Key
 Congressional Staff  (May 1993).


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