Summary

In response to a congressional request, GAO considered the options for establishing an energy conservation consolidated grant program. These options were considered in the context of provisions for: (1) measures of accountability for program effectiveness while still giving flexibility to State and local governments, (2) formulas for fund distribution, and (3) either matching or maintenance of effort requirements.

The nature and extent of a Federal role in accountability will depend on two factors: (1) whether the purposes of the programs make a Federal role appropriate or desirable, and (2) whether the design feature of the program make a Federal role possible. If a Federal accountability role is desired, the program should be designed in such a way that it is possible to assess what program funds are spent for and what they are accomplishing. GAO further stated that the purpose of an allocation formula is to distribute the program funds among State and local governments. Such formulas often give consideration to factors related to the program's overall objectives and seek to allocate funds to areas where problems are concentrated. Finally, GAO stated that matching and maintenance of effort provisions compromise the principal means through which Federal programs influence State and local budgets. Matching provisions require State and local governments to bear a minimum share of program costs as a condition for receiving Federal assistance. Maintenance of effort provisions are designed to prevent State and local grantees from reducing their spending in federally funded program areas.