Flexibility in Managing Federal Financial Assistance Programs

Federal assistance programs are an integral part of the intergovernmental partnership used to address national policy goals. However, the regulatory restrictions and administrative requirements attached to many federal grant and entitlement programs often needlessly consume money, restrict local flexibility, and impede the effective delivery of services. State and local governments are dealing with increasingly complex problems that require innovative and efficient delivery of services. The individual needs and growing diversity of our nation’s communities and the increase in demand for public services calls for greater flexibility in the design of federal policies and programs.

The current system of federal financial assistance impedes the ability of governments at all levels to address people’s needs in an integrated manner due to the multiplicity of programs dealing with single-issue areas. This fragmentation requires separate staff, offices and other additional supporting costs. Furthermore, federal laws and regulations attached to federal assistance programs often inhibit state and local governments from implementing federal programs because of costly and inappropriate requirements. Consolidation of programs and waivers of duplicative and unnecessary red tape would benefit the recipients of assistance, taxpayers, and federal, state and local governments. While the federal government should assure the fiscal and programmatic integrity of federal grants and contracts, in all cases, maximum state and local flexibility and authority should be preserved.

GFOA Position

The Government Finance Officers Association (GFOA) believes state and local governments should be afforded flexibility in spending and regulatory requirements in order to maximize the effectiveness and efficiency of federal financial assistance and supports legislative and regulatory initiatives that would:

• facilitate the consolidation of federal grant programs and applications for grants;
• promote more efficient use of federal, state and local resources through program flexibility and coordination between and among federal programs;
• enable state and local governments to integrate federal grant programs to increase their effectiveness and adapt federal assistance to fit the particular circumstances of their communities where consolidation has not occurred;
• eliminate duplication across federal programs;
• authorize the waiver of statutory and regulatory program requirements that inhibit state and local governments from efficiently and effectively implementing federal programs; and
• empower state and local governments to create innovative solutions to address national policy goals in ways that recognize the individual needs and diversity of our nation’s communities.

• Publication date: May 1996