Computerization of Information Recommendation No. 13 The Commission recommends that the President establish within ernments. To help the President discharge his responsibilities as chief administrator, the Executive Office should have ready access to full and accurate information about the nature and conduct of the programs being administered by Federal departments and agencies. The grant-in-aid system has become incredibly complex-fiscally, legally and administratively. This means that the Executive Office should be equipped with the most up-to-date information systems technology that can be brought to bear upon this difficult area of governmental affairs. Our study of the grant-in-aid system revealed that the Bureau of the Budget is now handicapped in performing its oversight and coordination responsibilities by lack of an adequate computerized information system. Accurate overall data on such aspects of the grant system as matching ratios and apportionment formulas, planning requirements, eligible recipients, dollar amounts of grants by recipients and clientele groups, geographic distribution, and fiscal capacity and fiscal effort of State and local governments are difficult to come by, and when needed involves laborious research. This type of information is essential for understanding the intricacies of the existing complex grant systems. Quick access to it on a current basis is vital for appraising present programs and suggesting improvements such as specific grant consolidations, simplification and standardization of performance requirements and restructuring of allocation formulas and matching ratios. An effective information system then is necessary for developing toplevel policy proposals on grants and coordinating administration of them. Further, it is vital to effective execution of the total management and coordination responsibility of the chief executive. We are impressed at the extent of computerization throughout the Federal departments and agencies which now involves 2,620 computers, costing over $1 billion yearly, and requiring 71,200 employees to operate. It would seem equally, if not more, essential that these tools of modern management be used for overall policy, planning and management purposes at the apex of the Federal hierarchy. We are aware of the current efforts of the Intergovernmental Task Force on Information Systems, sponsored by the Bureau of the Budget. Yet, we also know that its primary focus is development of an information system for use by State and local governments--not the development of a computer capability as a tool for top management control. The Congress has similar yet differing needs for objective data in discharging its responsibility. As indicated in the recent study of the Joint Committee on Legislative Reorganization, it now suffers from lack of an adequate information storage and retrieval system. Congress shares responsibility for disorderly growth of the categorical grant system. A major contribution of an up-to-date computerized information system would be to provide a source of data on the existing pattern of grants so that Congress would have the information to enable it to avoid decisions that would cause further duplication or inconsistencies among grant programs. SIMPLIFICATION OF ADMINISTRATIVE CONTROLS The Commission has documented three types of grant requirements as causing unusual and--in most instances--unnecessary difficulties for participating jurisdictions: auditing and accounting requirements, the "single State agenand planning provisions. Acceptance of State Audits Recommendation No. 14 The Commission recommends the enactment of general legisla- of Federal grant funds be accepted by the administering Federal Finally, the Com mission recommends that this authorization be extended at the discretion of the Comptroller General to units of local govern- Every Federal agency administering grants-in-aid to State and local governments is charged by the Congress and by regulations of the Comptroller General with assuring the proper and legal use of Federal grant funds made available to such State or local governments. Consequently, each administering Federal agency and each major bureau engaged in grant-in-aid administration deploys the requisite number of fiscal auditors throughout the States at appropriate intervals to audit the grant-in-aid accounts. The General Accounting Office as part of its "spot audit" program to ascertain the effectiveness of agency audits of Federal expenditures also audits grant-in-aid expenditures at the State and local levels. Federal agency auditing activities have had to keep pace with the growth in absolute number and variety of Federal grant-in-aid programs. Also since World War II, State governments have had to improve the capability of their accounting and auditing systems due to the growth, complexity and magnitude of State expenditures. The Commission believes that intergovernmental relations could be simplified and a significant saving in total governmental manpower and taxpayer dollars could be achieved if State audits were accepted in lieu of Federal audits in those States having as high a standard of accounting adequacy and integrity as that required for the Federal Government itself. The Commission believes that the Comptroller General, as the arbiter of the propriety of Federal expenditures, is in a position to appraise periodically and to certify as to the adequacy or inadequacy of the accounting and auditing systems of each of the 50 States. There is no logical reason why the same type of arrangement could not prevail with respect to major cities and urban counties except for the additional manpower requirements that might be imposed upon the General Accounting Office. The Commission realizes that such a procedure may raise objections that (a) the General Accounting Office has never done this before, and it would be injected into a completely new relationship with State and local governments; (b) separation of powers between Legislative and Executive Branches might be compromised; and (c) many State auditors themselves desire more and not less Federal audit. It is clear that the Comptroller General would have to be provided with additional manpower in order to carry out the foregoing recommendation. It is equally clear, however, that the manpower increment for the General Accounting Office would be less than the collective saving in personnel for the executive agencies. If Congress should conclude that separation of powers is a problem in connection with this approach, then participation by the Bureau of the Budget both in the establishment of auditing standards for grant-in-aid expenditures and in the maintenance of a list of "approved" State auditing systems could be provided. The intent of this proposal is not to shortcut in any way the exercise of fiscal prudence and fiscal accountability at all levels of government. The Commission believes, however, that some new intergovernmental arrangements in the accounting and auditing field would enable the achievement of these objectives at a significant saving in time, energy, and improved Federal-State-local relations. Single State Agency Requirement Recommendation No. 15 The Commission recommends the enactment of legislation pending in the Congress to authorize the modification, at the request of a State and with approval by the head of the Federal depart- Few Federal provisions have been as persistent a source of irritation to Federal-State relations as the one that stipulates that a "single State agency" must be named, or a State unit be named as the "sole agency" to administer or supervise a grant program. The merits of this requirement appear to be largely historical. In the formative years of the public assistance programs, it was essential that the single State agency requirement be vigorously enforced to bring order out of chaos in the existing as well as the newly emerging public assistance programs in the States. It was also necessary that the Federal agency have one and only one State agency to deal with in matters regarding public assistance and only one agency to hold responsible for administering these programs. Current conditions call for a more liberal interpretation of this requirement. States need to restructure their govenmental organization to keep pace with the added functions and responsibilities that are thrust upon them by the complexities of modern life. Just as change dictated Federal establishment of the Department of Health, Education, and Welfare, and subsequently, the severance from the Social Security Administration of functions now administered by the Welfare Administration, so it has been and will continue to be necessary for State government to reorganize. It is quite probable that sound State reorganization proposals will run into trouble trying to meet both the needs and desires of the particular State and, at the same time, satisfy in all cases the single State agency requirement. Rigid application of the single State agency requirement can tie up a Governor, as well as the legislature, in restructuring State government. Moreover, anterdisciplinary" approach like that built into an increasing number of grant programs and a rigid single State agency requirement are incompatible. In the pending Intergovernmental Cooperation Act (S. 698; H. R. 5528 and associated bills), the head of the administering Federal department or agency is authorized to waive the single State agency requirement upon the request of a recipient State if the department or agency is convinced that the alternate administrative arrangement will not undermine the program objectives being sought through the grant. Consolidation and Simplification of Planning The Commission recommends the enactment of general legislation A great many new planning requirements have been introduced into the categorical aid system since 1964. Some relate to planning for a particular function such as air pollution or water supply. Others require planning of a comprehensive character, i.e., tying together and interrelating the different functional plans. In November 1966, 82 grants had planning requirements of one kind or another. As these have evolved some have been very specific--even to the point of stipulating the type of advisory board that must review the State or local plan. Others have required merely a certification that the particular project does no violence to the comprehensive plan for the area. The Director of the Bureau of the Budget has said that overlapping planning requirements are one of the major administrative and intergovernmental problems of the day. Duplication can defeat the purpose of planning and generate confusion. Confusion can also be caused where functional planning is not related to general plans. Finally, there is danger of overplanning in some areas alongside planning gaps elsewhere. In all this, the role of State planning frequently has been overlooked, although the Department of Housing and Urban Development consistently has encouraged State governments in the administration of "Section 701" funds to develop an improved planning competence at their level. The Commission believes that the time has come when planning requirements as well as grants themselves need to be consolidated into a lesser number of separate statutory enactments and that there must be an improved planning interrelationship among local, State, and National levels of government. The Commission urges a formulation of appropriate legislation, based on existing studies, establishing a consolidation and simplification of such requirements. Such legislation might include some or all of the following features: Every major functional grant program should require a func- |