What is it that defies all attempts at simplification? Federal aid process!

WHENEVER they get together, state and local officials always commiserate about the chronic pains that come with federal grants. Although there has been some consolidation of federal assistance programs into broader purpose block grants that give more spending discretion to the recipients, Congress is actually creating new categories faster than old ones are being merged. In the current fiscal year about 75 per cent of the $60 billion in federal aid to states and localities is contained in at least 975 categorical programs administered by 52 federal agencies. Of the remainder, 15 per cent is in block grants and about 10 per cent in revenue sharing.

Like the weather, everyone talks about the paperwork horrors of the federal grant process, but nobody seems able to do anything about them. New programs are enacted piecemeal with little regard for existing ones. Congressional committees identify national objectives and issue reports on how they want the problems attacked. Federal administrators then devise a maze of inconsistent regulations and application procedures in an effort to guarantee that the money is spent accordingly. For example, in 1916 the first of what is now a patchwork of federal highway acts provided funds for construction of public roads expressly for transportation of the U. S. mail with the jointly financed projects to be supervised by the federal government.

Last year the General Accounting Office (GAO), an arm of Congress, reviewed the problems of "delivering" federal aid yet another time. GAO concluded that the problems were "directly attributable to the proliferation of federal programs and fragmentation of organizational responsibilities."

Complaints about federal aid vary according to the size of the governmental body applying for the money. Most of the bigger states and metropolitan units have trained grantsmanship specialists who have learned to cope with the administrative details. For them, the question is whether the federal resources any longer are worth all the extra paperwork and management complications. The GAO report described the elaborate grapevine that a large municipality must erect to keep informed about the changing rules and avoid missing out on anything. Daily issues of the Federal Register — over 35,000 pages a year — are must reading. Specifically, a local government official must be alert for amendments to the Code of Federal Regulations by consulting the cumulative "List of CFR Sections Affected" and updating the Catalog of Federal Domestic Assistance. One city pays a $28,000 annual fee to the National League of Cities for the halftime services of a man-in-Washington. Sometimes, according to GAO, the representative is able to acquire and disseminate information to the city before the regional office of the particular federal agency receives it. The same city also staffs an office of legislative liaison costing $50,000 a year; purchases information services from a private firm for about $600 a year; and the city's public works department employs its own grants coordinator in Washington. Several cities either maintain their own offices in Washington or, as in the case of Chicago, rely on private consultants to look after their interests there. Smaller municipalities simply cannot afford to spend the money for expert information and advice (see Dec., 1975,"Smalltown grantsmanship: Roadblocks and opportunities"). Often by the time local officials discover an available source of federal funds the deadline for applications has passed or the funds are depleted. By the time they master the rules, the rules have been changed.

For yet another time GAO recommended that more duplicating and overlapping programs be consolidated. Moreover, funding uncertainties could be eliminated, GAO said, if Congress appropriated aid for longer than a year at a time. The President's Office of Management and Budget accused the GAO report of "lacking federal perspective." Not only do longer appropriation commitments increase the uncontrollable outlays in the federal budget, but congressmen enjoy the political leverage over state and local officials that is created by the uncertainty.

Another study to be completed later this year by the Advisory Commission on Intergovernmental Relations (ACIR) in Washington already casts doubt on whether the block grant conversions are working as they should be. Issues of state control versus a pass-through to the cities; of the division of authority between the governor and the legislature; and of congressionally determined national objectives being ignored, were observed in the Partnership in Health program that consolidated 16 categories in 1966. What is more surprising is ACIR's finding that the federal regulations attached to block grants appear to the recipients to be more complicated, onerous and arbitrary than when the money dribbled out in categorical streams. Technical requirements imposed by several different federal agencies were replaced by a variety of government-wide requirements mandated by Congress relating, for instance, to civil rights, equal employment opportunities, and environmental impact. Call them formula grants, discretionary grants, block grants, or whatever. Congress is not yet ready to drop the strings that are tied to federal dollars. 

March 1976 / Illinois Issues / 31