Summary

GAO assessed state implementation of block grants from 1982 to 1984 in 13 states which accounted for about 46 percent of all 1983 block grant funds.

GAO found that the first 2 years of block grant implementation proceeded relatively smoothly because the states' prior involvement with many of the programs provided an administrative framework for absorbing their new responsibilities with little organizational change. Despite reduced federal funding, the availability of categorical funds, supplemental federal money, and the ability to transfer funds between certain blocks helped promote fiscal stability in most of the programs. States also used their own funds to help offset federal funding cuts in block grants where the states had longstanding administrative and financial involvement. The states sought public input through several forums in considering how to spend block grant funds. In making their initial decisions, states generally emphasized program continuity. As block grant implementation proceeded, the states reported widespread management improvements. However, while the states embraced block grants, interest groups believed that the block grants were less desirable than the categorical approach. In the next few years, the states and the federal government will have to decide the extent funds should be contributed to maintain services in the absence of overlapping categorical funding and will have to reexamine the formulas used for distributing block grant funds. Furthermore, more information will be needed on services delivered and clients served. Finally, there will be a need to periodically assess how well state systems and procedures are ensuring program accountability.