instruments appropriate to several types of relationships, eliminate some problems and ambiguities, and provide a basis for greater Government-wide consistency. But the stimulus to achieve maximum efficiency, consistency, simplicity, and effectiveness is likely to come only from a Government-wide assistance system spelling out the rationale for and specific guidance on methods, techniques, and requirements for assistance transactions and relationships. Such a system would illuminate grant-type programs and the ways they are carried out so as to permit public scrutiny and encourage better understanding and needed improvements. The rapid growth of grant-type programs in the 1960's and early 1970's has created tremendous stresses on an already overburdened Federal administrative structure. There is excessive proliferation of requirements, undue complexity, serious lack of coordination, and inadequate management. Federal grant-type assistance should "assist" non-Federal recipients. The lack of a recognized system to assign responsibilities for grant-type assistance programs has unfortunate effects. Where there is or is considered to be recipient inadequacy, the Federal administrator tends to try to remedy it by developing more and tighter Federal rules, procedures, and standards. He then feels more secure in the face of the scrutiny to which he may be subjected. The recipient tends to see his part in this process as one of becoming a routine applier of Federal rules and regulations, with the program losing the flexibility necessary for optimum effectiveness. Without welldeveloped concepts of what what Federal/nonFederal relationships should be, the dynamics of the process are likely to work against recipient initiative, responsibility, and growth, and against effective performance of assistance objectives. It is likely, for example, that many of the Federal and non-Federal participants in assistance projects do not recognize the "project management" needs of some projects. Assuring adequate contractor project management in a procurement context is difficult enough. We have yet to understand the need for, much less provide, guidance on assuring adequate project management in the different, supposedly cooperative, and admittedly more delicate, assistance relationship. In emphasizing recipient responsibilities, we cannot lose sight of the Federal responsibility for assuring the effective expenditure of public funds. Assistance programs must strike a careful balance between utilizing and encouraging recipient capabilities and providing the standards and technical assistance, including management assistance, needed to assure effective performance. In view of the size of the "Federal Assistance System," this can be done effectively only with Government-wide consid eration of programs and the way things are done. A comprehensive system of guidance is necessary if Federal and recipient staff effort is to be used effectively in assistance programs. We found that most representatives of recipient interest groups, particularly those of State and local government, see the advantages of a more rational assistance system. They see a possibility that such a system might enhance the cooperative or partnership character of some relationships, which would reduce what they see as the tendency of Federal administrators to "impose" conditions on recipients without adequate recipient opportunity to comment or negotiate on the conditions. Most State and local recipients would like to participate to a larger extent in processes that now are often closed to them. They would welcome a structure which offered promise of open discussion and a clearer delineation of the respective roles of the Federal agencies and themselves. Of course, many of those involved in categorical programs, in and out of Government, are likely to be distrustful of any change that might affect the operation of their individual programs. The creation of an assistance system would give the Congress a better overview that would assist it in making clearer its intentions when it authorizes new programs. It also would facilitate congressional review and oversight of how the agencies perceive and handle these programs. GAO, in carrying out its audit and review responsibilities, makes judgments on where audit effort and attention are needed. For this reason, the question of accountability, which is closely related to responsibility, is of interest to GAO. If a basic Federal system in terms of which agency and recipient roles and responsibilities can be clarified is established, it should also permit a sharpening of the meaning of accountability. A standard framework should facilitate GAO's efforts to achieve effective accountability to the extent that it recognizes degrees and kinds of Federal and non-Federal responsibility, as well as means of associating degrees and kinds of responsibility with types of instruments or classes of transactions. OMB has recognized the need to bring greater order to Federal assistance programs. OMB studies in 1966 and 1969 were directed toward research at institutions of higher education. The current OMB Federal Assistance Review (FAR) Interagency Task Forces seek uniformity and simplicity in requirements used in transactions with several classes of performers, units of State and local governments, educational institutions, hospitals, and other nonprofits, including community-based nonprofit groups. FAR generally has not endeavored to distinguish assistance from procurement in any systematic way nor has it tried to distinguish between grants and contracts. It recognizes that the issuance of Government-wide guidance, to the extent that it requires distinguishing types of transactions, would face agency opposition and statutory barriers which would be difficult or impossible to overcome in the absence of explicit statutory authority to do so. Thus, FAR's effort to obtain interagency consensus on requirements has tended to result in establishing requirements which are least common denominators of present practice. While this effort will be helpful, what is needed is not only a simplification or standardization of present agency practices, but also a thorough examination of all kinds of assistance programs in an attempt to determine what a system of guidance for them should be. The feasibility of developing a comprehensive system should be assessed. There has been no concerted effort to examine Federal assistance programs, much less grant-type assistance programs, in systems terms. jectives. Much less effort has been devoted to generalizing from the methods used in assistance programs. If assistance methods can be standardized and cataloged, it should be possible to take a long step in the direction of consistency and simplicity, and at the same time enhance program effectiveness, by establishing a system of guidance for generic aspects of the management of assistance programs. The system that needs to be developed should cover all types of assistance relationships. The need is to: (1) identify the assistance universe comprehensively; (2) examine existing techniques and related considerations; (3) generalize to the extent possible from such data; and (4) explore the possibilities of developing new techniques. An analysis and evaluation of assistance techniques should consider, in addition to the usual grant-type transactions, loans, direct payments, and all forms of nonfinancial assistance. It also should consider subsidies which usually are not regarded as "assistance." It also may be desirable to consider the applicability of assistance techniques to "revenue sharing." It is a reasonable guess that questions of accountability, oversight, and the degree of active and passive Federal involvement in revenue sharing will become issues of national importance. A systematic review of all forms of Federal assistance and their operational methods and techniques could assist in decisions on how new forms of assistance should be structured to achieve desired ends. The major purpose of identifying the assistance universe is to permit generalization from the types of Federal/recipient interaction which occur. It should be possible to identify all types of functional purposes and then by questionnaire and interview obtain from the agencies and from recipients in each kind of program in-depth data on types of involvement or interaction. By involvement we mean the formal and informal ways in which the agency and the recipient interact before, during, and after performance of the recipient activity. Formal interactions include the use of a program or financial plan, the approval of specific milestone decisions, the approval of contracts or grants let under the prime recipient transaction, and so on. These are "active" types of involvement. There are also formal "passive" kinds of involvement, such as the use of cost principles or other standards or requirements which must be followed. The clauses in contracts, grants, and other instruments establish formal parameters of involvement or interaction. Some of these clauses require or lead to specific kinds of interaction. For this reason it is necessary to identify and analyze the statutory requirements for assistance programs and compare them in selected programs with the requirements added by the agencies. Beyond formal transactional requirements, there are formal agency and recipient requirements (established by agency or recipient policies and procedures) which lead to interaction. There are also informal kinds of interaction (persuasion, use of political influence, interpersonal relationships) which should be identified to determine their significance, whether generalization from them is appropriate, and how they relate to the more formal kinds of interaction. The data developed could be examined by matrix analysis. One coordinate could list the types of involvement or interaction which are identified, for example, budgetary control, approval of change orders, etc. The other coordinate could list types of function such as research, education, construction, demonstration, planning, etc. These program functions can be subdivided to accommodate various program purposes. For example, different kinds of research and different kinds of construction may call for different kinds of involvement or interaction. Finally, factors such as the nature of the recipient (unit of government, nonprofit organization, or profitmaking organization), degree of matching required, and the relationship of audit review to agency accountability may need to be included in the matrixes. An analysis of such a matrix should permit useful generalization with respect to assistance methods, techniques, standards, clauses, and relationships. The use of matrixes to develop data for generalizing assistance techniques or methods must be supplemented by consideration of related factors which have a direct or indirect * Some OMB FAR data were put in such a form and might be helpful in this connection. bearing on assistance techniques. Development of a system of guidance for assistance programs requires more than development of a collection of assistance methods, processes, procedures, and clauses based on an analysis of types of involvement and program functions. It also requires consideration of related matters which must be explored to enable the system to provide the kind of complete guidance required by the agencies. Some of these related matters, cast in the form of needs, are: • An analysis of all Federal assistance statutes to (1) obtain an overall picture of statutory requirements for assistance programs and (2) determine if any legislative changes are desirable. • A comparison in selected programs of requirements established by statute against requirements established by the agencies. • Development of factors that should be considered by the agencies in distinguishing assistance from procurement, that is, guidelines for deciding whether a specific transaction is assistance or procurement. • Development of factors that should be considered by the agencies in deciding on the use of the various kinds of assistance instruments: grants, grants-in-aid, and cooperative agreements. • Recommendations on the applicability of clauses now used in procurement to assistance transactions. • Recommendations on mandatory and optional requirements or standards which should be applied Government-wide to assistance transactions. • Development of standards for use in procurement transactions which occur under assistance relationships. • Recommendations as to when there should be agency involvement in procurement transactions which occur under assistance relationships. Recommendations as to what kinds of requirements should be specified by statute and what kinds should be developed administratively by the agencies, OMB, or GAO. • An examination of the significance for assistance relationships of the nature of the recipient, whether it is a unit of State or local government, a nonprofit organization, or a profitmaking organization. An analysis of considerations such as the role of technical competition, price, and cost factors; the use of lump-sum types of arrangements; and the use of fees or surcharges in assistance transactions. • A review of management problems that have hampered assistance programs. • An examination of the needs for agency and Government-wide data and reporting on assistance programs. • An examination of the role of assistance recipients in the process of developing requirements for new programs and developing or modifying requirements for ongoing programs. These factors, or needs, will overlap many of the considerations which will arise from an analysis of the matrix data. That is desirable in that separate consideration of these factors should point up omissions and emphasize interrelationships. The resulting network of interrelated considerations is especially important for the development of a system of guidance for assistance programs, as it would become an integral part of such a system. The system of guidance that is needed can be regarded tentatively as an analogue of a system of procurement regulations. It is a reasonable expectation that it might take similar form. Thus, it should be possible to take the generalized techniques, methods, procedures, processes, and relationships that are yielded by use of matrixes, consider them in the context of the results of the related considerations listed above, and develop the elements that will make up the system. The character of those elements will influence the kind of system which is developed, but the structure of procurement regulations suggests a framework that should be considered: Introduction (scope, applicability, arrangement, deviations) Definitions of terms General policies (for example, nature of assistance relationships) Patents, data, and copyrights Non-project-related technical assistance Standard and suggested forms and formats. The system that results should present a catalog of alternative kinds of relationships spelled out in sufficient detail to enable Congress, the executive agencies, and recipients to better judge the full import of a transaction or class of transactions. For example, if responsible decentralization is a desirable goal, judgments as to how it can be accomplished (as well as its desirability) are best made on the basis of as much operational detail as possible on what a specific relationship would entail in terms of roles and responsibilities. An important by-product of an effort to spell out the operational detail and operational considerations pertinent to a system of guidance for assistance relationships is likely to be the emergence of better ways of defining the nature of Federal assistance. For this reason, the development of a system is not just a Federal function. Defining a Federal role defines a recipient role. An analysis of Federal assistance techniques, which considers the relationships between Federal agencies and recipients, requires the involvement of recipients and their representatives, as well as representatives of the Federal agencies. Today, assistance recipients' major complaint is that they do not play the role they feel they should play in the establishment of requirements that are placed upon them. They are not providing supplies or services for Federal use. They are endeavoring to accomplish congressionally established objectives with the assistance of the Federal agencies. Assistance recipients are affected and involved differently from Government contractors, hence, their different roles in program formulation and in rulemaking should be explicitly determined with their cooperation. Pending the enactment of legislation to reduce the existing statutory barriers to consistency, a study of the kind suggested above should be undertaken to determine the feasibility of developing a system of guidance. This may be done in conjunction with or apart from the activities being conducted by the OMB Federal Assistance Review. It should be done so that a determination can be made at an early date of the utility of a system of guidance. A systematic examination of the questions that must be dealt with in developing such a system should provide evidence of the need for executive branch guidance to the agencies and should also identify specific changes requiring legislative action by Congress. The continuing increase in the number, size, and complexity of Federal assistance programs and the increasing billions of dollars appropriated for assistance underline the urgency of this task. |