February 8, 1972
Page 3035
By Mr. MUSKIE (for himself, Mr. GURNEY, Mr. PERCY, Mr. METCALF, Mr. JAVITS, Mr. HUMPHREY, and Mr. ROTH)
S. 3140. A bill to improve the financial management of Federal assistance programs; to facilitate the consolidation of such programs; to provide temporary authority to expedite the processing of project applications drawing upon more than one Federal assistance program; to strengthen further congressional review of Federal grants-in-aid; and to extend and amend the law relating to intergovernmental cooperation. Referred to the Committee on Government Operations.
INTERGOVERNMENTAL COOPERATION ACT OF 1972
Mr. MUSKIE. Mr. President, I introduce for appropriate reference, the Intergovernmental Cooperation Act of 1972, a bill to streamline our system of Federal grants-in-aid, or categorical grants, to State and local governments, on behalf of myself and Senators GURNEY, PERCY, METCALF, HUMPHREY, JAVITS, and ROTH.
I ask unanimous consent that the bill and section-by-section analysis be included in the RECORD at the conclusion of these remarks.
This measure is directed to strengthening the management of our categorical grant-in-aid system, the chief means by which the Federal Government helps the States and localities solve national problems. It is a necessary supplement to the Intergovernmental Cooperation Act of 1968 – Public Law 90-577 – the first major piece of legislation to improve administrative relationships between the Federal, State, and local levels of government.
The bill is the result of over 4 years of investigation and legislative hearings by the Senate Subcommittee on Intergovernmental Relations. It deals with the question of overlapping and time-consuming auditing, accounting, and fiscal reporting activities; the difficulties facing grant applicants seeking to package grant applications; the tough issue of controlling excessive fragmentation of grant authorizations and categories; and the problem of achieving more effective executive and legislative oversight with respect to these programs.
To meet these problems, the bill provides for:
Authorization in the President to promulgate rules to simplify and unify financial reporting requirements of Federal assistance programs, including reliance on State and local audits which meet Federal criteria.
Provision for an expeditious method – using the Executive Reorganization Act approach – for congressional approval of grant consolidations involving closely related grants in a functional area.
Authorization for simplifying administrative and technical requirements to permit joint management and joint funding of Federal assistance programs on a departmental, and to a lesser extent, on an interdepartmental basis.
Establishment of a more comprehensive policy of congressional and Executive review of the operation of grant programs, and provisions for grant review specialists on substantive committees in the Congress.
Mr. President, portions of this bill, particularly the grant consolidation title, touch on a fundamental question: How should responsibility be divided between the Federal Government on the one hand and State and local governments on the other?
There are many areas with which State and local governments are best qualified to deal; there are others where it is necessary for the Federal Government to share responsibility. The National Government is best placed to have a broad view of national interest, to identify national priorities and to see that they are met. There are critical problems, national in scope, which must be attacked by the Federal Government because States and localities are unable to deal with them alone. It is to meet this national responsibility that the Federal Government distributes and administers funds in the form of categorical grant programs.
Many of these grant programs, created by the Congress to deal with specific problems during the past decade, should be listed among the most significant legislation ever passed. Programs like Model Cities, the anti-poverty program, title I of the Elementary and Secondary Education Act, and the air and water pollution control program have made vital and significant contributions to the betterment of our Nation. They have provided opportunities for millions of our citizens who previously have had no chance to become productive members of society.
During the past decade, however, these programs have multiplied. Between 1960 and 1970, the amount of Federal assistance allocated through categorical grant programs increased from $7 billion annually to $30 billion – 20 percent of the total revenue of State and local governments.
The number of Federal grant programs has risen as well – from 160 in 1962 to more than 530 by the end of the last Congress.
It is understandable, with this rapid expansion of categorical grant programs that some overlapping, duplication of effort and lack of coordination has occurred. This bill is intended to remedy that situation. Inefficiency squanders resources which should go toward solving the problems for which the grants were authorized by Congress; confusion makes it hard for the Executive to administer programs to the maximum benefit of the intended recipients.
It is the purpose of this bill, therefore, not to blunt or destroy the thrust of categorical grant programs, but to sharpen that thrust by eliminating overlapping and duplication, improving coordination and promoting better administration, planning, economy, and efficiency.
This bill differs fundamentally from the proposals for special revenue sharing under which the President would have the power to lump funds of a large number of categorical grants together and transfer these funds to State governments with only skeletal controls and no provision for Federal-State administrative cooperation.
I want to underline that the legislation which I am introducing today is not intended to undercut either the concept of categorical grants-in-aid or individual grants. It is intended to strengthen grant-in-aid assistance by giving the President the means to make grants more effective and efficient.
There being no objection, the bill and analysis were ordered to be printed in the RECORD, as follows:
S. 3140
A bill to improve the financial management of the Federal assistance programs to facilitate the consolidation of such programs; to provide temporary authority to expedite the processing of project applications drawing upon more than one Federal assistance program; to strengthen further congressional review of Federal grants-in-aid; and to extend and amend the law relating to intergovernmental cooperation.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act be cited as the "Intergovernmental Cooperation Act of 1972."
TITLE I – ACCOUNTING, AUDITING, AND REPORTING OF FEDERAL ASSISTANCE FUNDS
SEC. 101. The Intergovernmental Cooperation Act of 1968 (82 Stat. 1098; 42 U.S.C. 4201) is amended by adding at the end thereof the following new title:
"TITLE VII – ACCOUNTING, AUDITING, AND REPORTING OF FEDERAL ASSISTANCE FUNDS
"STATEMENT OF PURPOSE
"SEC. 701. It is the purpose of this title to encourage simplification and standardization of financial reporting requirements of Federal assistance programs, to promote among Federal agencies administering such programs, accounting and auditing policies that rely on State and local financial management control systems meeting certain standards, and to authorize the issuance of principles and standards governing the auditing of Federal assistance programs.
"MORE UNIFORM FINANCIAL REPORTING
"SEC. 702. Notwithstanding any other provision of law, the President shall, to the extent feasible, promulgate rules and regulations simplifying and making more uniform the financial reporting required by Federal agencies of recipients under Federal assistance programs.
"STANDARDS OF AUDITING TO BE DEVELOPED
“SEC. 703. (a) The Office of Management and Budget or such other agency as the President may designate, in cooperation with the Comptroller General, is hereby authorized to develop and issue principles and standards of auditing for the guidance of Federal executive agencies and State and local governments, as well as independent public accountants, engaged in the review and audit of Federal assistance programs. Such principles and standards shall serve the purpose of providing technical guidance to the various audit organizations but shall not be construed as relieving such audit organizations of their responsibility for the effective administration of their audit programs.
"(b) The Comptroller General shall include in his audits of Federal assistance programs reviews of the extent of utilization made by the Federal departments and agencies of audits performed by State and local government auditors or outside auditors and of the implementation of the principles and standards issued pursuant to subsection (a) of this section. He shall include in his reports on such audits information on the extent of such utilization and implementation.
"(c) The Comptroller General shall from time to time make such recommendations to the Federal agencies administering Federal assistance programs as he determines desirable to assist such agencies in complying with the provisions of this title and any regulation or principles and standards of auditing prescribed pursuant thereto.
"FEDERAL AGENCIES' RELIANCE ON THE FINANCIAL MANAGEMENT CONTROL SYSTEMS OF STATES AND THEIR POLITICAL SUBDIVISIONS
"SEC. 704. (a) Federal agencies administering Federal assistance programs shall adopt accounting and auditing policies that, to the maximum extent feasible, rely on evaluation of internal or independent accounting and audits of such programs performed by or for States and units of local government without performing a duplicate audit unless deemed necessary.
"(b) Heads of such agencies shall determine the adequacy of the internal financial management control systems employed by recipient jurisdictions, including but not restricted to a determination of (1) whether reports are prepared in accordance with applicable requirements and are supported by accounting and other records; (2) whether audits are carried out with adequate coverage and in accordance with the auditing principles and standards issued pursuant to section 703(a); and (3) whether the auditing function is performed on a timely basis by a qualified staff which is sufficiently independent of program operations to permit a comprehensive and objective auditing performance.
"(c) Where such control systems are found to be acceptable, heads of such agencies shall, in the absence of substantial reasons to the contrary, authorize an evaluation of audits performed under such systems to determine their acceptability in lieu of audits which otherwise would be required to be performed by such agencies. Where the agency determines that audits performed under financial management control systems are acceptable, it will not perform duplicate audits. Where the agency does not accept audits performed under such systems in lieu of its audits, such agency shall make whatever audits are necessary to assure that the Federal funds are expended for the purpose of the Federal assistance program involved.
"(d) Periodic review and testing of the operations under such control systems shall be undertaken by such agencies to verify the continuing acceptability of the systems for the purposes of subsection (c) of this section.
"(e) Each Federal agency administering a Federal assistance program shall encourage greater cooperation with the personnel operating the internal financial management control systems of recipient jurisdictions by maintaining continuous liaison with such personnel, collaborating in accounting systems development and the interchange of audit standards and objectives and collaboration in the development of audit programs.
"(f) Each such agency administering more than one Federal assistance program shall, to the extent feasible and permitted by law, coordinate and make uniform the auditing requirements of individual programs.
"(g) Each Federal agency administering a Federal assistance program shall, to the extent feasible, establish cross-servicing arrangements with other Federal agencies administering Federal assistance programs under which one such agency would conduct the audits for another.
"(h) The Office of Management and Budget, or such other agency as may be designated by the President, is hereby authorized to prescribe such rules and regulations as are deemed appropriate for the effective administration of this section.
"NO DIMINUTION OF AUTHORITY OF COMPTROLLER GENERAL
"SEC. 705. Nothing in this title shall be construed to diminish the authorities and responsibilities of the Comptroller General of the United States under existing law."
TITLE II – CONSOLIDATION OF FEDERAL ASSISTANCE PROGRAM
SEC. 201. Title 5, United States Code, is amended by inserting the following immediately after chapter 9 of such title 5:
"Chapter 10 – FEDERAL ASSISTANCE PROGRAM CONSIDERATION
"Sec.
"1001. Purpose
"1002. Definitions
"1003. Federal assistance program consolidation plans.
"1004. Limitations on powers
"1005. Effective date and publication of consolidation plans.
"1006. Effect on other laws and regulations.
"1007. Rules of Senate and House of Representatives on consolidation plans.
"§ 1001. Purpose
"(a) The President shall from time to time examine the various Federal assistance programs provided by law and with respect to such programs shall determine what consolidations are necessary or desirable to accomplish one or more of the following purposes:
"(1) to promote better administration and more effective planning;
"(2) to improve coordination;
"(3) to eliminate overlapping and duplication; and
"(4) to promote economy and efficiency to the fullest extent consistent with the achievement of program goals.
"§ 1002. Definitions
"For the purpose of this chapter
" (1) 'agency' means–
"(A) an executive agency or part thereof; and
"(B) an office or officer in the executive branch.
"(2) ‘officer' is not limited by section 2104 of this title.
"(3) 'Federal assistance' or 'Federal assistance program' means any assistance provided by an agency in the form of grants, loans, loan guarantees, property, contracts (except those for the procurement of goods and services for the Federal Government), or technical assistance, whether the recipients are a State or local government, their agencies, including school or other special districts created by or pursuant to State law, or public, quasi-public, or private institutions, associations, corporations, individuals, or other persons; and
"(4) 'consolidation plan' means any Federal assistance consolidation plan proposed under section 1003 of this title.
"§1003. Federal assistance program consolidation plans
"(a) When the President, after investigation, finds that a consolidation of Federal assistance programs is necessary or desirable to accomplish one or more of the purposes set forth in section 1001 (a) of this title, he shall prepare a Federal assistance consolidation plan for the making of program consolidations, and shall transmit the plan (bearing an identification number) to the Congress, together with a declaration that, with respect to the consolidation included in the plan, he has found that the consolidation is necessary or desirable to accomplish one or more of the purposes set forth in section 1001 (a) of this title and a declaration as to how each program included in the plan is functionally related.
"(b) Each such consolidation plan so transmitted–
"(1) shall place responsibility for administration of the consolidated program in a single Federal agency;
"(2) shall specify in detail the terms and conditions under which the Federal assistance programs included in the plan shall be administered, including but not limited to matching, apportionment, and other formulas, interest rates, and planning, eligibility, and other requirements; except that the President shall, in selecting applicable terms and conditions, be limited by the range of terms and conditions already included in the Federal assistance programs being consolidated.
"(3) shall set forth in the message transmitting the plan to the Congress the difference between the terms and conditions of the individual Federal assistance programs to be consolidated under the plan and those that will be consolidated after the plan goes into effect, and shall also set forth the reasons for selecting such terms and conditions.
"(c) The President shall have a consolidation plan delivered to both Houses on the same day and to each House while it is in session, except that no consolidation plan may be delivered within 30 calendar days following the delivery of a previous plan in the same functional area.
"§ 1004. Limitations on powers
"(a) A consolidation plan may not provide for, and may not have the effect of (1) continuing any Federal assistance program or part thereof beyond the period authorized by law for its existence or beyond the time when it would have terminated if the consolidation plan did not take effect, (2) consolidating any Federal assistance programs which are not in the same functional area, (3) providing any type of Federal assistance included in such a consolidation plan to any recipient who was not eligible for Federal assistance under any of the programs included in the consolidation plan, (4) excluding from eligibility under the consolidation plan any recipient who was eligible for Federal assistance under any of the programs included in the consolidation plan, or (5) transferring responsibility for the administration of the program or programs contained in a consolidation plan in an agency, office, or officer who was not responsible for the administration of one or more such programs prior to the taking effect of the consolidation plan.
"(b) Each consolidation plan shall provide for only one consolidation of two or more Federal assistance programs.
"(c) A provision contained in a consolidation plan may take effect only if the plan is transmitted to Congress before April 1, 1973. Section 905(b) of this title shall not limit any consolidation plan prepared under this chapter.
"§ 1005. Effective date and publication of consolidation plans.
"(a) Except as otherwise provided in subsection (c) of this section a consolidation plan shall become effective at the end of the first period of 60 calendar days of continuous session of the Congress after the date on which the plan is transmitted to it unless, between the date of transmittal and the end of the 60 day period, either House passes a resolution stating in substance that the House does not favor the plan.
"(b) For the purposes of subsection (a) of this section,
"(1) continuity of session is broken only by adjournment of Congress sine die, and
"(2) the days on which either House is not in session because of an adjournment of more than 3 days to a day certain shall be excluded in the computation of the 60 day period.
"(c) Under provisions contained in a grant consolidation plan, a provision of the plan may become effective at a time later than the date on which such plan otherwise is effective.
"(d) A consolidation plan which becomes effective shall be printed (1) in the Statutes at Large in the same volume as the public laws and (2) in the Federal Register.
"§ 1006. Effect on other laws and regulations
"(a) To the extent that any provision of a consolidation plan which becomes effective under this chapter is inconsistent with any provision of any statute enacted prior to the effective date of the plan, the provision of the consolidation plan shall control, to the extent that such plan specifies the provision of the statute to be superseded.
"(b) Any regulation, rule, order, policy, determination, directive, authorization, permit, privilege, requirement, or other action made, prescribed, issued, granted, or performed with respect to any matter affected by a consolidation plan which becomes effective under this chapter shall be deemed to be modified to the extent of any inconsistency thereof with the consolidation plan but shall otherwise continue in effect.
"(c) A suit, action, or other proceeding lawfully commenced by or against the head of any agency or other officer of the United States, in his official capacity or in relation to the discharge of his official duties, does not abate by reason of the taking effect of a consolidation plan under this chapter. On motion or supplemental petition filed at any time within 12 months after the plan takes effect, showing a necessity for a survival of the suit, action, or other proceeding to obtain a settlement of the questions involved, the court may allow the suit, action or other proceeding to be maintained by or against the successor of the head or officer under the consolidation plan or, if there is no successor, against such agency or officer as the President designates.
"(d) A consolidation plan may provide for transfers of appropriations or other budget authority in such manner that the aggregate amount of appropriations and other budget authority available for carrying out the Federal assistance programs involved in such plan shall be available for any or all such programs; and the aggregate amount of authorizations of appropriations or other budget authority for such programs shall be deemed an authorization of appropriations and other budget authority for any or all of such programs. The appropriations or portions of appropriations unexpended by reason of operation of this chapter may not be used for any purpose, but shall revert to the Treasury.
"§ 1007. Rules of Senate and House of Representatives on consolidation plans
"(a) This section is enacted by the Congress–
"(1) as an exercise of the rulemaking power of the Senate and the House of Representatives, respectively, and as such it is deemed a part of the rules of each House, respectively, but applicable only with respect to the procedure to be followed in that House in the case of resolutions in subsection (b); and it supersedes other rules to the extent that it is inconsistent therewith; and
"(2) with full recognition of the constitutional right of either House to change the rules (so far as relating to the procedure of that House) at any time, in the same manner, and to the same extent as in the case of any other rule of that House.
"(b) The provisions of sections 910 through 913 of this title, shall apply with respect to a consolidation plan and, for such purposes–
"(1) all references in such sections to a 'reorganization plan' shall be treated as referring to a 'Federal assistance program consolidation plan', and
"(2) all reference in such sections to 'resolution' shall be treated as referring to a resolution of either House of the Congress, the matter after the resolving clause which is as follows: 'That the ____does not favor the Federal assistance program consolidation plan numbered ____transmitted to the Congress by the President on _____19__, the first blank therein being filled with the name of the resolving House and the other blank spaces therein being appropriately filled.
"' TITLE III – JOINT FUNDING SIMPLIFICATION
SEC. 301. The Intergovernmental Cooperation Act of 1968 (82 Stat. 1098; 42 USC 4201) is further amended by adding after title VII, as added by section 101 of this Act, the following new title:
"TITLE VII – JOINT FUNDING SIMPLIFICATION
"STATEMENT Off PURPOSE
"SEC. 801. The purpose of this title is to enable States, local governments and other public or private organizations to use Federal assistance programs more effectively and efficiently, to adapt such programs more readily to their particular needs through the wider use of joint projects drawing upon resources available from more than one Federal program, appropriation, or agency and to acquire experience which would lead to the development of legislative proposals respecting the consolidation, simplification, and coordination of Federal assistance programs. It is further the purpose of this title to facilitate the development of joint project and joint funding arrangements at the national level by giving primary emphasis to those arrangements involving intradepartmental actions and by placing interdepartmental joint projects and management funds on an experimental and limited demonstration basis.
"INTRADEPARTMENTAL JOINT PROJECTS
"SEC. 802. (a) The head of every Federal department and agency administering two or more Federal assistance programs is authorized to approve combined applications for joint projects requiring funding from two or more such programs administered by his department or agency.
"(b) To develop the necessary departmental or agency capability to achieve the purposes of section 801, the head of such department or agency, among other actions, shall–
"(1) identify related programs within his department or agency likely to be particularly suitable or appropriate for providing combined support for specific kinds of joint projects;
"(2) develop and promulgate guidelines, model or illustrative joint projects, common application forms, and other materials of guidance to assist in the planning and development of joint projects drawing support from different Federal assistance programs;
"(3) review program requirements established administratively within his department or agency in order to determine which of those requirements may impede combined support of joint projects and the extent to which these may be appropriately modified, and make modification accordingly;
"(4) establish common technical or administrative rules among Federal assistance programs administered by his department or agency to assist in the support of specific joint projects or classes of joint projects;
"(5) create joint or common application processing and project supervision procedures or mechanisms including procedures for designating a lead office or unit to be responsible for processing of applications and supervising joint projects approved by him; and
"(6) develop common accounting, auditing and financial reporting procedures that will facilitate establishment of fiscal and program accountability with respect to joint projects aided by Federal assistance programs administered by his department or agency.
"(c) Where appropriate to further the purposes of this title, and subject to the conditions prescribed under subsection (f) of this section, the head of every Federal department and agency administering two or more Federal assistance programs may adopt uniform provisions respecting–
"(1) inconsistent or conflicting departmental or agency requirements relating to financial administration, including accounting, auditing, and fiscal reporting, but only to the extent consistent with the provisions of clauses (2), (3), (4), and (5) of subsection (d) of this section;
"(2) inconsistent or conflicting departmental or agency requirements relating to the timing of Federal payments where a single or combined schedule is to be established for the joint project as a whole;
"(3) inconsistent or conflicting departmental or agency requirements that assistance be extended in the form of a grant rather than a contract, or a contract rather than a grant;
"(4) inconsistent or conflicting departmental or agency requirements for merit personnel systems, but only to the extent that the joint project contemplated would cause those requirements to be applied to programs or projects administered by recipient agencies not otherwise subject to such requirements;
"(5) inconsistent or conflicting departmental or agency requirements relating to accountability for, or the disposition of, property or structures acquired or constructed with Federal assistance where common rules are to be established for the joint project as a whole; and
"(6) other inconsistent or conflicting departmental or agency requirements of an administrative or technical nature as defined in regulations authorized by subsection (f) of this section.
"(d) To further carry out the purposes of this title, the head of every Federal department and agency administering two or more Federal assistance programs–
"(1) may provide for review of combined applications for joint projects to his department or agency by a single panel, board, or committee in lieu of review by separate panels, boards, or committees when such review would otherwise be required by law;
"(2) may prescribe rules and regulations for the establishment of joint management funds with respect to joint projects approved by him so that the total amount approved by any such project may be accounted for through a joint management fund as if the funds had been derived from a single Federal assistance program or appropriation; and such rules and regulations shall provide that there will be advanced to the joint management fund from each affected appropriation its proportionate share of amounts needed for payment to the grantee and amounts remaining in the hands of the grantee at the completion of the joint project shall be returned to the joint management fund;
"(3) may prescribe rules and regulations governing the financial reporting of joint projects financed through joint management funds established pursuant to this section; and such reports shall, as a minimum, fully disclose the amount and disposition of Federal assistance received by recipient States and local governments, the total cost of the joint project in connection with which such Federal assistance was given or used, the amount of that portion of the cost of the joint project supplied by other sources, and such other records as will facilitate an effective joint project audit;
"(4) shall have access for the purpose of audit and examination to any books, documents, papers, and records of recipient States and local governments that are pertinent to the moneys received from joint management funds authorized by him; and
"(5) may establish a single non-Federal share for any joint project, authorized by him and covered in a joint management fund, according to the Federal share ratios applicable to the several Federal assistance programs involved and the proportion of funds transferred to the joint project account from each of those programs.
"(e) Subject to such regulations as may be established pursuant to subsection (f) of this section, the head of every Federal department or agency administering two or more Federal assistance programs may enter into agreements with States or appropriate State agencies to extend the benefits of this title to joint projects involving assistance from his department or agency and one or more State agencies. These agreements may include arrangements for the processing of requests for, or the administration of, assistance to such projects on a joint basis. They may also include provisions involving the establishment of uniform technical or administrative requirements, as authorized by this section. Such agreements ordinarily will focus on those program areas wherein Federal assistance is normally channeled through the States.
"(f) In order to provide for the more effective administration of funds drawn from more than one Federal assistance program or authorization in support of intradepartmental joint projects authorized under this section and to assure energetic and more uniform departmental and agency administration of the functions authorized by this section, the President may prescribe such rules and regulations as he deems necessary to achieve these purposes.
"INTERDEPARTMENTAL DEMONSTRATION JOINT PROJECTS
"SEC. 803. (a) In order to extend selectively the benefits of joint projects and joint management funding on a governmentwide basis and in recognition of the administrative difficulties involved in this undertaking, the President is authorized to approve on a demonstration basis combined applications for joint projects, requiring funding from two or more Federal assistance programs administered by more than one Federal department or agency.
"(b) In order to develop the necessary capability within the Executive Office of the President for achieving the purpose of this section, the President shall have authority to exercise, with reference to interdepartmental demonstration joint projects the same responsibilities and authorities assigned to heads of Federal departments and agencies with reference to intradepartmental joint projects under Subsections (b), (c), (d), and (e) of section 802.
"(c) To facilitate the expeditious processing of applications for interdepartmental demonstration joint projects or their effective administration, the President is authorized to establish rules and regulations requiring the delegation by heads of Federal departments and agencies to other such departments and agencies of any powers relating to approval, under this section, of programs or classes of programs under an interdepartmental demonstration joint project, if such delegation will promote the purposes of such project. Such rules and regulations may also provide for the delegation to other Federal departments and agencies of powers relating to the supervision of administration of Federal assistance, or stipulate other arrangements for other departments or agencies to perform such activities, with respect to programs or classes of programs subject to this section. Delegations authorized by such rules and regulations shall be made only on such conditions as may be appropriate to assure that the powers and functions delegated are exercised in full conformity with applicable statutory provisions or policies.
"(d) To facilitate the establishment of joint management funds on an interdepartmental basis, any account in a joint management fund involving money derived from two or more Federal assistance programs administered by more than one Federal department or agency shall be subject to such rules and regulations, not inconsistent with other applicable law, as the President may establish with respect to the discharge of the responsibilities of affected departments and agencies. Such rules and regulations shall assure the availability of necessary information, including requisite accounting and auditing information, to those departments and agencies, to the Congress, and to the Executive Office of the President. They shall also provide that the department or agency administering a joint management fund shall be responsible and accountable for the total amount provided for the purposes of each account established in the fund, and shall adhere to accounting and auditing policies consistent with title VII of this Act. They may include procedures for determining, from time to time, whether amounts in the account are in excess of the amounts required, for returning that excess to participating Federal departments and agencies in accordance with a formula providing an equitable distribution; and for effecting returns accordingly to the applicable appropriations, subject to fiscal year limitations. Excess amounts applicable to expired appropriations will be lapsed from that fund.
"(e) During the seventh month after the end of each fiscal year, starting with the first full fiscal year after the effective date of this section, the President shall submit to the Congress an evaluation of progress in accomplishing the purposes of this title.
"(f) This section shall expire three years after it becomes effective, but its expiration shall not affect the administration of joint projects previously approved.
"FUNDING AND PERSONNEL AVAILABILITY
"SEC. 804. (a) Appropriations available to any Federal assistance program for technical assistance or the training of personnel may be made available for the provision of technical assistance and training in connection with projects approved for joint or common funding involving that program and any other Federal assistance program.
"(b) Personnel of any Federal agency may be detailed from time to time to other agencies as necessary or appropriate to facilitate the processing of applications under this title or the administration of approved projects.
"AUTHORITY OF THE COMPTROLLER GENERAL OF THE UNITED STATES
"SEC. 805. For the purpose of audit and examination, the Comptroller General of the United States shall have access to any books, documents, papers, and records of recipients of interdepartmental and intradepartmental joint projects that are pertinent to the moneys received from joint management funds established for such projects.
"DEFINITIONS
"SEC. 806. As used in this title
" (1) 'Federal assistance' or 'Federal assistance program' means any assistance provided by an agency in the form of grants, loans, loan guarantees, property, contracts (except those for the procurement of goods and services for the Federal Government), or technical assistance, whether the recipients are a State or local government, their agencies, including school or other special districts created by or pursuant to State law, or public, quasi-public, or private institutions, associations, corporations, individuals, or other persons; and
"(2) 'Joint project' means any undertaking which includes components proposed or approved for aid under more than one Federal assistance program or appropriation or one or more Federal assistance programs or appropriations in combination with one or more State or local programs, if each of those components contributes materially to the accomplishment of a single purpose or closely related purpose."
EFFECTIVE DATE
SEC. 302. Sections 802 and 803 of the Intergovernmental Cooperation Act of 1968, as added by section 301 of this Act, shall become effective one hundred and twenty days after the date of enactment of this Act.
TITLE IV – CONGRESSIONAL AND EXECUTIVE OVERSIGHT OF FEDERAL ASSISTANCE PROGRAMS
SEC. 401. Section 601 of the Intergovernmental Cooperation Act of 1968 (82 Stat. 1098; 42 U.S.C. 4201) is amended by adding at the end thereof the following new subsection:
"(c) If any law enacted on or after the date of the enactment of the Intergovernmental Cooperation Act of 1972 authorizes the making of grants-in-aid over a period of three or more years, then during the period beginning not later than the twelve months immediately preceding the date on which such authority is to expire, the committees of the House and Senate to which legislation extending such authority would be referred shall, separately or jointly, conduct studies of the program under which such grants-in-aid are made and advise their respective Houses of the results of their findings with special reference to the considerations cited in clauses (1), (2), (3), and (4) of subsection (a) of this section. Each such committee shall report the results of its investigation and study to its respective House not later than one hundred and twenty days before such authority is due to expire.
"SEC. 402. Title VI of such Act is amended
(1) by redesignating section 604 as section 606; and (2) by inserting immediately after section 603 the following new sections:
"CONGRESSIONAL REVIEW SPECIALISTS
"SEC. 604. Each standing committee of the Senate and House of Representatives which is responsible for the review and study, on a continuing basis, of the application, operation, administration, and execution of two or more grant-in-aid programs is entitled to employ a review specialist as a member the professional staff of such committee in addition to the number of such professional staff to which such committee otherwise is entitled. Such specialist shall be selected and appointed by the chairman of such committee, with the prior approval of the ranking minority member, on a permanent basis, without regard to political affiliation, and solely on the basis of fitness to perform the duties of the position. Such specialist shall, under the joint direction and supervision of the chairman and the ranking minority member, assist the committee in the performance of its review functions under this title.
"REPORTS BY FEDERAL AGENCIES
"SEC. 605 (a) Heads of Federal agencies administering one or more Federal assistance programs shall make a report to the President and the Congress on the operations of such programs at the end of each fiscal year, beginning with the first full fiscal year following the date of enactment of the Intergovernmental Cooperation Act of 1972. Such reports shall include–
"(1) the overall progress and effectiveness of administrative efforts to carry out each program's statutory goals;
"(2) the consultative procedures employed under each program to afford recipient jurisdictions an opportunity to review and comment on proposed new administrative regulations, and basic program changes;
“(3) intradepartmental and interdepartmental arrangements to assure proper coordination of headquarters and in the field with other related Federal assistance programs;
"(4) efforts and progress in simplifying and making more uniform (A) application forms and procedures and (B) financial reporting and auditing requirements and procedures;
"(5) efforts and progress in relying on the internal or independent audits performed by or for States and political subdivisions
"(6) the feasibility of consolidating individual Federal assistance programs with others in the same or closely related functional areas, where they exist;
"(7) the practicability of delegating more administrative discretion, including application approval authority, to field offices;
"(8) whether changes in the purpose, direction, or administration of such Federal assistance programs, or in procedures and requirements applicable thereto, should be made; and
"(9) the extent to which such programs are adequate to meet the growing and changing needs for which they were designed.
“(b) The President shall transmit to the Congress, no later than January 31 of each year, a summary report on Federal assistance activities of the preceding fiscal year. The first such report shall be transmitted not later than January 31 following the first full fiscal year following the date of enactment of the Intergovernmental Cooperation Act of 1972. Each report shall (1) summarize and analyze the findings of the department and agency reports provided in subsection (a) of this section; (2) set forth such recommendations as he may deem appropriate to convert the existing system of Federal assistance programs into a more effective vehicle for intergovernmental cooperation; and (3) such other matters that are considered pertinent.
"TITLE V – MISCELLANEOUS
“SEC. 501. Section 202 of the Intergovernmental Cooperation Act OF 1968 (82 Stat. 1098; 42 USC 4201) is amended to read as follows:
"SEC. 202. No grant-in-aid to a State or a political subdivision shall be required by Federal law or administrative regulation to be deposited in a separate bank account apart from other funds administered by the State or political subdivision. All Federal grant-in-aid funds made available to the States or to political subdivisions shall be properly accounted for as Federal funds in the accounts of the State or of the political subdivisions. In each case the agency of the State or of the political subdivisions concerned shall render regular authenticated reports to the appropriate Federal agency covering the status and the application of the funds, the liabilities and obligations on hand, and such other facts as may be required by said Federal agency. The head of the Federal agency and the Comptroller General of the United States or any of their duly authorized representatives shall have access for the purpose of audit and examination to any books, documents, papers and records that are pertinent to the grant-in-aid received by the States or by the political subdivisions."
SEC. 502. Section 203 of such Act is amended to read as follows:
"SEC, 203. Heads of Federal departments and agencies responsible for administering grant-in-aid programs shall schedule the transfer of grant-in-aid funds consistent with program purposes and applicable Treasury regulations, so as to minimize the time elapsing between the date of transfer of such funds from the United States Treasury and the date of disbursement thereof by a State or by a political subdivision; or between the date of disbursement by a State or by a political subdivision and the date of transfer by the United States Treasury. States and the political subdivisions shall not be held accountable for interest earned on grant-in-aid funds, pending their disbursement for program purposes."
SECTION-BY-SECTION ANALYSIS OF THE INTERGOVERNMENTAL COOPERATION ACT OF 1972 TITLE I – ACCOUNTING, AUDITING, AND REPORTING OF FEDERAL ASSISTANCE FUNDS
Title I amends the Intergovernmental Cooperation Act of 1968 (P.L. 90-577) by adding a new Title VII which deals with the accounting, auditing, and reporting of Federal assistance funds.
Section 701 sets forth the purposes of this new title: to encourage the simplification and standardization of the diverse financial reporting requirements of Federal assistance programs, to promote among Federal grant agencies accounting and auditing policies that rely on State and local fiscal control systems if they meet certain professional standards, and to empower the Comptroller General of the United States to establish rules and regulations for use of certain State and local audits in meeting GAO's responsibilities regarding Federal assistance programs.
More uniform financial reporting: Section 702 authorizes the President, notwithstanding any other provisions of law, to establish rules and regulations that will simplify and, where possible, make more uniform the financial reporting requirements associated with Federal assistance programs. The purpose here is to bring greater order to a situation where widely varying forms, differing time schedules, and divergent data requests have undermined the basic objectives of meaningful fiscal reporting on Federal assistance programs.
Standards of auditing to be developed: Section 703 authorizes the Office of Management and Budget, with the cooperation of the Comptroller General, to promulgate principles and standards of auditing for the guidance of Federal, State and local agencies, and independent public accountants, in their review and audits of Federal assistance programs. This section further directs the Comptroller General to include in audits of Federal assistance programs reviews (i) of the extent of utilization by Federal agencies of audits performed by State and local agencies, and (ii) of the extent of implementation of principles and standards of auditing issued pursuant to this section. This section further directs the Comptroller General from time to time to make recommendations to Federal agencies to assist them in implementing the provisions of this title as they relate to Federal assistance programs.
Federal agencies’ reliance on the financial management control systems of States and their political subdivisions:
Section 704 directs Federal agencies which administer Federal assistance programs to adopt accounting and auditing policies which, to the maximum extent feasible, rely on the financial management control systems of States and localities, so as to avoid performing duplicate audits unless necessary.
Under this section, heads of agencies are assigned the responsibility of determining the adequacy of the internal financial management control systems utilized by recipient jurisdictions. In meeting this responsibility, such heads will, among other things, ascertain whether reports are prepared in accordance with applicable requirements and are supported by accounting and other records, whether audits are carried out with adequate coverage and in accordance with the auditing principles and standards issued pursuant to section 703(a), and whether the auditing function is performed in a timely fashion by a qualified professional staff that is sufficiently independent – in an administrative and political sense – from program operations, so that a comprehensive and objective audit can be performed. Where such control systems are found acceptable, agency heads, in the absence of substantial reasons to the contrary, are required to accept the audits performed under such systems as a substitute for those which otherwise would be performed by their own agency personnel. The periodic sample testing technique is cited as the chief means of verifying the continuing reliability of accepted control systems.
In order to strengthen the cooperative relationships among fiscal management personnel, each Federal agency administering assistance programs is required (under section 703(e)) to maintain continuous liaison with counterpart State and local fiscal control administrators and the interchange of audit standards and objectives and interlevel collaboration in the development of audit schedules are specifically cited as means of furthering this liaison. To reduce the proliferation of accounting and auditing systems within and between Federal agencies, Federal agency heads are required, to the extent feasible and permitted by law, to coordinate the auditing requirements of assistance programs coming under their jurisdiction (section 703 (f)) and to establish cross-servicing arrangements with other agencies for audit purposes (section 703 (g) ).
The Office of Management and Budget, or such other agency as may be designated by the President, is authorized to prescribe government-wide rules and regulations for the effective implementation of this section.
TITLE II – CONSOLIDATION OF FEDERAL ASSISTANCE PROGRAMS
This title amends title 5 of the United States Code which sets out procedures authorized for an executive reorganization: a proposal by the President becomes effective in 60 days unless either House passes a resolution saying it is not in favor. This title adds a new chapter 10, which places a new approach to consolidation of "closely related" Federal assistance programs within the framework of the executive reorganization procedures.
Section 1001 declares the title's basic purposes and states that the President from time to time shall examine the various Federal assistance programs and, in the case of programs falling within the same functional area, promote better administration and planning, improve coordination, eliminate overlapping and duplication and promote economy and efficiency to the fullest extent consistent with the achievement of program goals.
Section 1002 contains certain definitions applicable to the new chapter 10 added by this Act.
Federal assistance consolidation plans under section 1003: the President, after finding that a consolidation of Federal assistance programs is necessary or desirable to accomplish one or more of the purposes of section 1001(x), is authorized to prepare and transmit to Congress a consolidation plan, together with a declaration indicating his finding that the plan will further the purposes of this title and a declaration as to how each program in the plan is functionally related.
In his transmission of a consolidation plan, the President is required to place responsibility for the consolidated program in a single Federal agency and is required to specify in detail the terms under which the Federal assistance programs included within the plan shall be administered.
In selecting applicable terms and conditions, the President is limited by the range of terms and conditions of programs which are consolidated under the plan.
The President is required to set forth differences between proposed terms and conditions and corresponding provisions of the programs to be consolidated, along with the reason for such changes.
Subsection 1003 (c) stipulates that a consolidation plan must be delivered to both Houses of Congress on the same day and to each House while it is in session.
No consolidation plan may be delivered within 30 calendar days following the delivery of a previous plan in the same functional area.
Limitations on powers
Section 1004 sets forth limitations on the scope of a proposed consolidation plan. The limitations are as follows:
1. No plan shall continue any consolidated program beyond its authorized period. Section 1004(x)(1).
2. Consolidation of programs must be in the same functional area, or closely related functional areas. Section 1004(x) (2).
3. The plan must not extend assistance to any recipient not eligible under any program included in the consolidation. Section 1004 (a) (3).
4. The plan must not exclude from eligibility any recipient eligible under any program included in the consolidation. Section 1004(x)(4).
5. Responsibility for administration of the plan cannot be transferred to any agency which was not previously responsible for at least one of the consolidated programs. Section 1004(x) (5). It is stipulated that each consolidation plan shall provide for only one consolidation of two or more
Federal assistance programs.
In line with traditional Congressional limitations on the duration of reorganization legislation, subsection 1004(c) provides that authorization to transmit a consolidation plan under this legislation shall expire two years after enactment of this title.
Effective date and publication of consolidation plans
Section 1005 follows the procedure for Congressional action on executive reorganizations. This section provides that a consolidation plan shall become effective at the expiration of sixty days of continuous session of the Congress, unless before termination of the sixty-day period either House passes a resolution stating in substance that it does not favor the consolidation. A consolidation plan which becomes effective shall be printed in the Statutes at Large and in the Federal Register (subsection 1005(d) ).
Effect on other laws and regulations
Subsections 1006 (a) and (b) provide that the provisions of a consolidation which has become effective shall take precedence over any preexisting law, regulation, rule or order to the extent that any inconsistency exists. However, legal actions commenced prior to the effective date of a consolidation plan would not abate solely as a result of changes effected by the plan. (Subsection 1006 (c) ).
Under subsection 1006 (d) a consolidation plan may provide that the unexpended authorizations and appropriations for merged programs shall be transferred for use under any or all programs which are part of the consolidation.
Rules of the Senate and the House of Representatives
As an exercise of the rulemaking power of the Senate and the House of Representatives, section 1007 provides that consideration and action on a 'consolidation plan’ in either House shall be pursuant to the provisions of Sections 910 through 918 of title 5, relating to executive reorganizations.
TITLE III – JOINT FUNDING SIMPLIFICATION
Section 301 further amends the Intergovernmental Cooperation Act of 1968 by adding a new Title VIII dealing with joint funding simplification. Section 801 states that the purpose of the title is to enable States and other public or private organizations to use Federal aid programs more effectively and efficiently, to adapt these programs more readily to their individual needs by facilitating the broader use of joint projects involving more than one aid program, and to acquire experience that would lead to additional legislative proposals regarding consolidation, coordination, and simplification of Federal assistance programs. The statement of purpose also indicates that primary emphasis is to be given to developing widespread use of joint projects and joint funding arrangements within individual departments and placing counterpart efforts at the interdepartmental level on an experimental and limited demonstration basis.
Intradepartmental joint projects: Section 802 deals wholly with procedures involving intradepartmental joint projects and joint funding arrangements. Under it, the head of each Federal department and agency administering more than one Federal aid program is authorized to approve combined applications for joint projects requiring funding from two or more such programs falling under his jurisdiction. To develop the necessary departmental or agency capability for achieving the purposes of this title, section 802(b) requires departmental heads, among other things, to identify related aid programs within his agency that are likely candidates for joint projects; to develop and promulgate guidelines, joint project examples, common application forms, and other materials that will facilitate development of an intradepartmental joint project program; to review the various administrative requirements of departmental assistance programs in order to identify those that might impede the expeditious processing of joint project applications and where appropriate make the necessary modifications; to establish common technical or administrative rules for related departmental assistance programs; to create common or joint application processing and project supervision procedures – including establishing a single unit for handling these functions; and to develop common auditing, accounting, and fiscal reporting procedures to facilitate establishment of fiscal and program accountability with respect to joint projects approved by him.
In order to provide the means of cutting the red tape arising from the varying procedural requirements associated with individual assistance programs, the head of each Federal department and agency administering two or more such programs is authorized under section 802(c) to adopt, subject to such regulations as may be promulgated by the President pursuant to section 802(f), uniform provisions regarding inconsistent or conflicting agency requirements involving financial administration, the timing of Federal payments, whether assistance must be extended in the form of a grant or a contract, merit personnel systems (but only to the extent that a proposed joint project would cause these requirements to be applied to programs not otherwise subject to them), the accountability for or the disposition of property or structures acquired or constructed with Federal assistance, and other relevant administrative technical items defined in regulations issued pursuant to subsection (f).
To develop the intradepartmental financial arrangements necessary for expediting joint projects, each head of a department and agency administering two or more Federal assistance programs is permitted under section 802 (d) to set up a single board or panel for the review of combined applications to his department; to prescribe rules and regulations for establishing joint management funds with respect to joint projects approved by him, so that the total amount approved for any project may be accounted for as if the funds had been derived from a single aid program or authorization; to establish uniform rules and regulations governing the fiscal reporting of projects financed through joint management funds; to have access, for the purpose of audit and examination, to relevant records and other data of recipient States and local governments relating to moneys received from joint management funds authorized by him; and to establish a single non-Federal share for any joint project authorized by him and covered in a joint management fund.
Section 802(e) permits such heads of departments and agencies, subject to such regulations as may be established pursuant to subsection (f), to enter into agreements with States to extend the benefits of joint projects and joint management funds to cover combined applications involving not only assistance from programs administered by his department but also from those administered by one or more State agencies. In most instances, Such arrangements will be restricted primarily to those programs areas where Federal assistance is normally channeled through the States.
Under section 802(f), the President is authorized to prescribe such rules and regulations as he deems necessary to provide for the more effective administration of funds drawn from more than one Federal assistance program or authorization in support of intradepartmental projects authorized by this section. While fewer administrative problems can be expected to arise in establishing meaningful departmental joint project programs than in the case of interdepartmental projects, energetic and consistent departmental efforts may not always be forthcoming – hence, the need for this section.
Interdepartmental demonstration joint projects
Section 803 extends selectively the benefits of joint projects and joint management funding on a government-wide basis. This is done in recognition of the administrative difficulties involved in this commendable but complex undertaking. Section 803(a) authorizes the President to approve on a demonstration basis combined applications for joint projects requiring funding from two or more Federal assistance programs administered by more than one Federal department or agency.
Section 803 (b) gives to the President with respect to interdepartmental projects authorities comparable to those assigned to heads of departments and agencies under section 802 (b), (c), (d), and (e). This is done in order to facilitate the development of the necessary capability in the Executive Office of the President for processing and administering interdepartmental joint projects and joint management funds.
Section 803 (c) authorizes the President to establish rules and regulations requiring the delegation by heads of Federal departments and agencies to other departments and agencies of project or program approval authority insofar as it involves programs or classes of programs included in an interdepartmental joint project (s). Without this authority, it is doubtful whether the goals of this section can be achieved. Such rules and regulations may also call for the delegation to other Federal departments and agencies of powers relating to the supervision by Federal assistance programs. These rules and regulations are conditioned by the proviso that they must be appropriate to assure that the powers and functions delegated are utilized in full conformity with applicable statutory provisions or policies.
Section 803(d) is geared to permitting establishment of joint management funds on an interdepartmental basis. Accordingly, the President is authorized to make rules and regulations, not inconsistent with other applicable law, governing the setting up of joint management funds involving moneys derived from two or more Federal assistance programs administered by more than one Federal department or agency. These rules and regulations will assure that the necessary accounting, auditing, and other fiscal information will be made available to the departments involved, the Congress, and the Executive Office of the President. They also shall stipulate that any department or agency administering a joint fund shall be accountable for the total amount provided for the purposes of each account established in the fund and shall practice accounting and auditing policies consistent with new Title VII of the Intergovernmental Cooperation Act. Such rules and regulations may include procedures for determining on a periodic basis whether amounts in the account are in excess of those required, for returning that excess to participating agencies according to an equitable distribution formula, and for making returns to applicable appropriations, subject to fiscal year limitations.
Section 803(e) requires the President to submit annually to Congress a report evaluating the progress in accomplishing the purposes of this title. This report will be submitted every January beginning with the first January following the end of the first fiscal year after the effective date of this section.
The final subsection stipulates that this section will become effective 120 days following the date of enactment and will expire three years after it has become effective. Such expiration, however, shall not affect the administration of interdepartmental joint projects previously approved.
Funding and personnel availability Section 804 (a) is designed to help provide technical assistance to State and local governments involved in developing combined applications for joint projects. Under it, appropriations available to any Federal aid program for technical assistance or personnel training may be made available for the provision of such assistant in connection with joint projects involving that program and any other Federal aid program. In addition, the personnel of any Federal agency (pursuant to section 904 (b) ) may be detailed from time to time, where necessary, to other agencies to assist in processing combined applications or in administering approved joint projects.
The authority of the Comptroller General of the United States
Section 805 states that the Comptroller General of the United States shall have access to any books, documents, papers, and records of recipients of intradepartmental or interdepartmental joint projects relating to moneys received from joint management funds for the purpose of GAO audit and examination.
Definitions
Section 806 contains definitions of "Federal assistance," "Federal assistance program," and "joint project" as used in this title.
Effective date
Section 302 states that section 802 and 803 of the Intergovernmental Cooperation Act of 1968, as added by Section 301 of this Act, shall become effective one hundred and twenty days after the date of enactment of this Act.
TITLE IV – CONGRESSIONAL AND EXECUTIVE OVERSIGHT OF FEDERAL ASSISTANCE PROGRAMS
Section 401 of this Act amends the Intergovernmental Cooperation Act of 1968 by adding a new subsection at the end of section 601. This amendment is designed to strengthen Congressional review procedures for grants-in-aid having termination provisions of three or more years. During the year preceding the date on which the program authority is to expire, the relevant substantive committee of Congress, either separately or jointly, will conduct studies of the program and advise their respective Houses of their findings with special reference to the factors cited in section 601 (a) (1), (2), (3), and (4). The Committee report will be filed with the respective Houses not later than one hundred and twenty days before the program is slated to expire.
Section 402 amends Title VI of the Intergovernmental Cooperation Act of 1968 by adding two new sections following section 603 and appropriately renumbering section 604. The first of these new sections authorizes establishment of the position of review specialist of each standing committee of the Senate and House responsible for the review, study, and oversight of two or more assistance programs. This additional professional staff member will be selected and appointed by the Chairman of the standing committee with prior approval of the ranking minority member. He would serve on a permanent basis, without regard to political affiliation, and solely on the basis of professional competence. His basic assignment would be to assist the Committee in its performance of functions assigned by this title and he would be under the joint direction of the Chairman and the ranking minority member.
The second new section (section 605) is geared to strengthening Executive Branch oversight with respect to Federal assistance programs. Under it, heads of Federal departments and agencies administering more than one program would submit annually a report to Congress and the President on the operations of these programs, beginning with the first fiscal year following the date of enactment. These departmental reports among other things would cover the progress and effectiveness of administrative efforts to carry out the programs' statutory goals; the consultative procedures utilized under each program to afford recipient governments a chance to review and comment on proposed administrative regulations and basic program changes; the various intradepartmental and interdepartmental arrangements for achieving proper headquarters-field program coordination; efforts to simplify and make more uniform application forms and procedures as well as fiscal reporting and auditing requirements; effort and progress in relying on audits performed by or for States and localities; the feasibility of consolidating functionally related assistance programs; the practicability of delegating more administrative authority – including project or program approval power – to departmental field offices; whether the purpose, management, administrative procedures and requirement in such programs should be changed; and the degree to which such programs are meeting the growing and changing needs they were initially designed to support.
This new section (section 605) concludes with the requirement that the President shall submit a summary report on these various departmental studies not later than January 31 of each year following the first fiscal year after the date of enactment. This report would be a synthesis of the materials presented in the various departmental studies and would stress the broad problems confronting grants-in-aid as effective government-wide devices for intergovernmental cooperation. Presidential proposals for reform might well be a concluding feature of this report.
TITLE V-MISCELLANEOUS
The purpose of this title is to extend to the political subdivisions of a State the provisions of sections 202 and 203 of the Intergovernmental Cooperation Act of 1968 which now apply only to States.
Section 202, as amended, by this title, would eliminate the requirement that political subdivisions maintain separate bank accounts for grants-in-aid. At the same time the amended section extends to political subdivisions the requirement of keeping proper accounts, making regular fiscal reports, and providing Federal agencies and the Comptroller General access to the books of the political subdivision for purposes of audit.
Section 203, as amended by this title, would require that Federal agency heads schedule transfers of grant-in-aid funds in such a way as to minimize the time elapsing between the date of transfer and the date of disbursement by a political subdivision. Present law limits section 203 to transfers to States under grant-in-aid programs.
Mr. GURNEY. Mr. President, I am pleased to cosponsor the Intergovernmental Cooperation Act of 1972 introduced today by Senator MUSKIE. This legislation differs only slightly from that reported unanimously by the subcommittee on Intergovernmental Relations to the full Government Operations Committee in the last Congress (S. 2479).
Since the end of World War II, and especially in the last decade, Federal expenditures in the area of civilian-domestic needs have relied heavily on categorical grants to States and local governments. Today, these sometimes narrow-purposed, project-oriented grants have proliferated until we have more than 530 specific Federal programs operating through categorical grants. In the fiscal year ending June 30, 1971, some $30 billion was dispersed to States and localities through these programs.
The multiplicity and complexity of this growing maze of grants has caused serious problems for States and localities which are the intended beneficiaries of the various programs. Among these problems are the difficulty in determining just what programs are available and what are the differences and similarities among them; the loss of flexibility caused by the necessity to work within the framework of numerous small grants rather than with a limited number of consolidated programs; the needless inefficiency and waste resulting from overlapping and duplicated efforts; and the bureaucratic red tape which hinders recipients attempting to comply with differing requirements of many separate grants.
This bill, which is based on over 4 years of subcommittee investigation and hearings and encompasses studies and recommendations of the advisory committee on intergovernmental relations, moves toward a solution of these problems by:
First. Authorizing the President to establish simpler and more unified auditing regulations governing Federal assistance programs,
Second. Providing for expeditious congressional approval of executive proposals for consolidation of related grants in the same functional area;
Third. Authorizing simpler administrative requirements to permit joint management and funding of Federal assistance programs; and
Fourth. Establishing more comprehensive executive and congressional reviews over grants programs.
This bill accomplishes the desired streamlining of grants' administration without sacrificing congressional prerogatives. This is done through a combination of congressional review and restrictions on consolidation plans which prohibit:
First. The continuance of a consolidation program beyond its authorized period.
Second. The consolidation of programs which are not of the same or closely related functional areas.
Third. The extension of assistance to any recipient not qualified under one of the programs to be consolidated. Fourth.
The exclusion of any recipient qualified under any of the programs to be consolidated.
Fifth. The transfer of administration of a consolidated program to any agency not previously responsible for administration of one of the programs to be consolidated.
Sixth. The submission to Congress of more than one consolidation proposal from the same functional area, within the same 30-day period.
Mr. President, this bill promises a more rational and efficient participation by State and local governments in Federal assistance programs, without surrendering the principle of congressional oversight. This bill will do much to reduce the bureaucracy and red tape which threatens to smother the Federal relationship between our national, State and local governments. I urge the assistance of all Members of the 92d Congress in the passage of this legislation.