United States General Aceoulain6! omce Washh@.un, D.C. 20642 Health, Edimation, and Human53emiceeDivifdon B-277783 September3, 1997 The Honorable CharlesE. Grassley United States Senate The Honorable Christopher S. Bond United States Senate The Honorable Pete Hoekstra Chairman, Subcommitteeon Oversight and Investigations Committee on Education and the Workforce House of Representatives Subject: National ServicePrograms: Status of AmeriCor~s Reform Efforts i The AmeriCorps program, administered by the Corporation for National and Commuuity Service(the Corporation}, is presently in its third year of operation.’ The program givesparticipants stipends and education awards in exchange for service that addressesuumet needsin education, public safety, human services, and the environment. The Corporation, with a total fiscal year 1997 . appropriation of $616million, administers a variety of grants to existing and new national service projects; AmetiCorps grauts, for which $215 million was appropriated, constitute the largest share of these funds. AmeriCorps grants include (1) operating grants to state commissions, which subgrant funds to local projects; (2) operatig grants to national projects; and (3) grants for a recently established Education Awards Program that provides funding for education awards but minimal or no funding for project operations. 1 ‘We first reported on AmeriCorps in 1995 (National Service Promms: Am& GAO/HEHS 95-222,Aug. 29, 1995). The AmeriCorpsYJSAprogram is now known as the AmeriCorps*StateINationalprogram; in this correspondence, we refer to it as “AmexiCorps.” AmeriCorps is authorized under the National and Commuuity Service Trust Act of 1993(P.L. 103-82,42U.S.C. 12571 et seq.). The Corporation administers severalother programs, including the AmeriCorps*VISTA, AmeriCorps*National Civjlian Commuuity Corps, Learn and Serve America, and National Senior Vohmteer Corps programs. GAOIHEHS-97-198R AmeriCkms Reform Efforts B-277733 In March 1996,responding to congressional criticism, the Corporation agreed to 10reform steps to improve AmeriCorps. These included reducing averageper- participant costs, decreasingreliance on federal funding, eliminating grants to federal agencies,and increasing the number of projects funded with grants for the Education Awards Program. On March 14, 1997,you asked us to- determine the status of the Corporation’s reform efforts. We agreed with your offices to focus our work on the reform efforts that are related to reducing costs; more specifmlly, our objectives were to determine how AmeriCorps funding changed per-participant from the initistl program year @rogram year 1) to the third program year (program year 3); whether private contributions to AmeriCorps increased on a per- participant basis from program year 1 to program year 3; the status of subgranteesof former federal agency grantees; and the status of Corporation efforts to increase the number of projects that provide only education awards to participants under the.Education Awards Program.3 In determining how AmeriCorps funding has changed,we relied on funding data from the CorporatiorYsgrant data system on grant awards and expected funding matches from non-Corporation sources. Although we.did not validate these data with individual grant documents, we checked the data for internal consistency and resolved any discrepancies with the Corporation. We recognize that actual grant funds distributed, actual matching funds obtained, and actual participants performing service may vary from the amounts expected, but actual data for program year 3 are not available yet. In addition to this funding analysis, we ?I’he Corporation’s first operating grants for AmeriCorps projects were funded with its fiscal year 1994appropriation, to be used in the 199495 program year. Operating grants in the third year were funded with the Corporation’s fiscal year 1996appropriation for the 1996-97program year. Program years begin and end at different times throughout the calendar year for different projects and may extend for more than or less than 12 months. 90 increase the number of participants while reducing costs per participant, the Corporation establishedthe AmeriCorps Education Awards Program as a separategrant program in September 1996. It makes education awards available to support community service through organizations that can largely or entirely cover the cost of operating their projects without additional Corporation support. 2 GACVHEH+97-198R AmeriCorps Reform Efforts B-277783 discussedthe questions with and obtained documentation from Corporation officials, discussed with some federal agencies (former grantees) their conlktued funding of local projects, and discussedwith a few projects the private contributions received, federal funding, and the Education Awards Program. We conducted our review from June to August 1997in accordancewith generally accepted government auditing standards. In summary, our analysis shows that the Corporation has made progress in taking some of the cost reduction reform steps but lacks data systemsto track whether all these reforms have been made. Corporation grant funds per participant have decreased by about 6 percent. Matching funds have increased in total, but the Corporation is unable to document whether private contributions have increased. No federal agencies,at either the national or field-office level, are ktwriCorps grantees in program year 3. However, many of the subgrantee projects of former federal agency grantees, as allowed by law, continue to operate as AmefiCorps projects, having applied for and received Corporation funds either directly from the Corporation or through state commissions. In addition, the Education Awards Program is operationzil; 49 new projects have been funded for a total of 6,400participants so far in program year 3. BACKGROUND The Corporation provides grant funds to projects to pay up to 85 percent of the cost of participants’ living allowances and benefits and up to 67 percent of other project. costs, including participant training, education, and service gear; staff salaries, travel, transportation, supplies, and equipment; and project evaluation and adn&&rative costs. To ensure that federal Corporation dollars are used to leverage other resources to help pay for project support, granteesmust also obtain matching support from non-Corporation sources. This matching support, which can be cash or in-kind contributions, may come from other federal sources as well as state and local governments and private sources.4 Project participants can serve full-tjme or part-time. A full-time participant provides at least 1,700hours of service within a l-year period and‘receives an 41nthis correspondence, we refer to both cash and in-kind contributions as “matching funds.” Matching funds do not need to be dollar-for-dollar. 3 GAOIHEHS-97-198R AmeriCorps Reform Efforts R-277783 education award of $4,725. Part-time participants receive a portion of this award, depending on the amount of service performed.’ CORPORATIONGRANT FUNDS PROVIDEDPER PARTICIPANTHAVEI DECREASED Prom program year 1 to program year 3, Corporation grant funds provided per FTE to all projects have decreased6 percent, to about $10,000,as shown in table L6 Matching funds per FTE decreased10 percent, to about $8,800. Grant.funds in total increased by about a quarter, while FTEs increased by more than a third. 1. ._ ;ii . . ‘. ‘Our analysis is conducted in terms of full-time equivalentparticipants (FIX). A full-time participant is counted as one FTE; a part-time participant is counted as a fraction of an FTE equal to the pro-rated fraction of a full-time service year in which he or she participates. These data came from grant applications and reflect the number of participants expected at the time ‘of the application. In our tables, we also include the number of participants, which is computed as the sum of full-time and part-time participants. ‘Note that the averageper-FTE funding discussedincludes only grant funds provided to projects. The education award and a pro-rated portion of the Corporation’s overhead, expensesthat were included in our 1995report, are exchrded. 4 GAO/KEHS-97-198R AmeriCorps Eeform Efforts ES-277783 Table 1: Comtxxrison of Funding; Data for All Proiects Onerating in Program Years 1 and 3 I Percent increase Category Program year 1 Program year 3 (decrease) Corporation grant funds I $147,925,690 1 $188,721,991 I 28 Matching funds $134,603,382 $164,902,486 23 Total funds $282,529,0721 $353,624,477 25 FITS 13,819 1 18,829 I 36 Corporation funds/FTE $10,705 $10,023 (6) Matching funds/FIX $9,741 $8,758 WV Total funds/FlX $20,446 $18,781 03) Number of projects 298 475 59 Number of participants 16,680 23,044 38 Note: Program year 1 data include 71 projects that have since discontinued operations, and program year 3 data include 248 projects that began operations after program year 1. Another way to look at trends in Corporation grants is by analyzing Corporation grant data for the 227 projects operating in both program years 1 and 3, as shown in table 2. These projects’ per-participant funding tiends may reflect efforts to eliminate expensive projects or decreases in per-participant funding from more expensive start-up years to later years. For these projects, Corporation funding per FI’E decreased 20 percent to about $9,300. Unlike the decrease in matching funds per FTE shown for all projects above, these projects showed an increase in matching funds per FTE of about owetenth. The increase in matching funds per FTE and the decrease in Corporation funds per FTE are consistent with the Corporation’s reform agreement. The changes result in the matching funds per l?f’E nearly equaling the Corporation funds per l?f’E. GAO/EEHS-97-198R AmeriCorps Reform Efforts B-277783 Table 2: Comnarison of Fund& Data for Proiects Onerating in Both Program Years 1 and 3 Note: n/a = not applicable. The Corporation has taken several steps to decrease its grant funds per participant. In program years 1 and 2, the Corporation set no target for per-FIX funding. However, for program year 3, the Corporation limited its grant funds per FTE to $13,800 or, if more than that, the grantee was required to reduce the per-FTE funding from program year 2 by at least 10 percent.7 For program year 4, the Corporation will limit its grant funds per FI’E to $11,750. In calculating average per-FTE funding, states may include participants in the Education Awards Program. In addition to setting these grant fund limitations, the Corporation increased its non-Corporation match requirement from 25 to 33 percent beginning in program year 3. Akhough the Corporation has reduced the amount of its own grant funds expected to be disbursed per planned participant, the Corporation does not collect data on the amount of federal funding from other departments and ‘For state commissions, which are grantees for several projects in their states, this requirement applied to the overall average of state projects. 6 GAOBEHS-97-198R AmeriCorps Reform Efforts B-277783 agencies. Projects are permitted to use federal funds from non-Corporation sources to meet required matches for most budget categories but are not required to report this information to the Corporation. For our 1995 study on AmeriCorps resources, we collected information directly from projects showing that federal resources from non-Corporation sources totaled $3,177 per FTE in program year 1. Corporation officials explained that the primary reason they do not collect information on sources of matching funds is that Office of Management and Budget (OMB) grant requirements limit the data agencies providing grants may collect without special OMB permission.* Thus, the Corporation generally collects information only on the total amounts of Corporation funds and non- Corporation funds spent. The Corporation is considering requesting OMB’s permission to deviate Tom these requirements and collect detailed information on the sources of matching funds; however, Corporation officials expressed concern that they lack the resources required for such a data gathering effort. CORPORATION UNABLE TO DOCUMENT TRENDS IN PRIVATE CONTRlBUTlONS Although the Corporation has implemented some changes intended to increase the amount of private resources flowing to AmeriCorps projects, it has no system to determine the actual amounts projects are receiving. Lacking a system that idenmes the source of matching funds (as discussed above), the Corporation cannot determine whether private contributions are increasing. Although the Corporation does not have information on private funds obtained, officials have taken some steps to increase the amount of these funds going to local projects. Then. efforts include the following. Unlike in program years 1 and 2, for program year 3 all projects were requested to raise some funds (cash or m-kind) from private sources. The amount of matching funds that projects are. required, to obtain increased from 25 percent in program years 1 and 2 to 33 percent beginning with program year 3. Matching funds come from all sources (other federal agencies, state and local government agencies, and private sources). ‘these requirements are found in OMB Circular A-110. 7 GAOAEHS-97-198R AmeriCorps Reform Efforts B-277783 The Corporation has acted to build and improve relations with potential private funding sources by, for example, raising AmeriCorps visibility through a nationdl summit, directing potential corporate sponsors to a portfolio of projects in their interest areas, and providing individual projects with technical assistance in raising such funds. OmR FEDERAL AGENCIES’ ROLE IN AMERICORPS GREATLY REDUCED In program year 3, the Corporation provided no grants to federal agencies to operate AmeriCorps projects as it had done in the tist two program years. In program year 1, the Corporation provided about $14.6 million in grants to 15 grantees within 13 federal agencies.’ Jn February 1996, the Corporation notified its federal agency grantees that it would not “make direct grants of funds to federal agencies for AmeriCorps programs” in anticipation that such grants would be disallowed in the Corporation’s pending appropriations bill-l’ However, the Corporation gave erristing local subgrantees of the federal agency grantees a choice of applying for Corporation funds, as either individual applicants or a member of a consortium of projects submitting a joint application.” Jn program year 3, several of these local projects contiued to receive Corporation funding through one of these arrangements. F’urther, as allowed under the authorizing legislation, some of these projects continue to receive non-Corporation federal funding-cash or in-kind-to operate their projects. We contacted the six former federal agency grantees whose subgrantees received more than $1 million from other federal sources in program year 1 and determined that five provided funding (from non-Corporation the 15 grantees included three grantees within one agency, the Department of Health and Human Services, and one grantee in each of 12 other agencies. 10TheOmnibus Consolidated Rescissions and Appropriations Act of 1996 (P-L. 104134), which became law shortly thereafter, eliminated funds for national service projects run by federal agencies. “The Corporation initially provided a third option: federal agencies could apply for Corporation funds for only education awards. However, after determining that some members of the Congress believed it did not meet the spirit of the ArneriCorps reforms agreement, the Corporation eliminated this option. 8 GAOBEHS-97-198R AmeriCorps Reform Efforts B-277783 sources) to at least one former subgrantee each in program year 3-l’ Most of this funding appeared to be at reduced levels relative to program year 1. For example, EPA provided a total of more than $700,000 of in-hind support to 6 projects in program year 1; an agency official said that currently only a small amount of technical assistance from EPA regional offices goes to these projects. The Department of Energy contributed more than $900,000 in cash and about $450,000 of in-kind support to the Salmon Corps AmeriCorps project in program year 1, while in program year 3, according to Energy staff, Energy’s contribution is about $500,000 in cash and a minimal amount of in-kind support. Furthermore, most of the local projects that were subgrantees of the Department of Agriculture, the largest federal grantee, did not receive program year 3 operating grants, according to an Agriculture official, and the $21.million of support that Agricuhure provided to its subgrantees in program year 1 has been eliminated. AMERICORPS EDUCATION AWARDS PROGRAM BEING IMPLEMENTED Before the Education Awards Program began, only a few projects were funded with Corporation funds for just education awards ($4,725 per full-time participant) under the operating grants to local projects. The administration has proposed expanding the Education Awards Program to 50,000 participants over the next 5 years. As of July 1997, the Corporation had established three review cycles for Education Awards Program applications, with application deadlines of October 31, 1996, February 28, 1997, and June 30, 1997. Decisions on grant awards have been made on the first two cycles. Grants were approved for 49 projects with about 6,400 participants (3,200 FTEsj totaling about $15 million in education awards. The Corporation permitted grant applicants to request up to $1,000 per FI’E for project management expenses, and many applicants requested these funds. Examples of allowable expenditures for these funds include oversight of a multisite organization and training for participants and supervisors in AmeriCorps procedures. For the 49 projects approved, funds approved for managing the projects totaled $1.6 mihion, or about $500 per FIE.,. The AmeriCorps Education Awards Program has fewer grant requirements than the operating grants. SemiannuaI project progress reports are required rather ‘?he six former federal agency grantees we contacted were the departments of Agriculture, Defense (Department of the Navy), Energy, the Interior, and Justice and the Environmental Protection Agency (EPA). 9 GAO/HEBS-97-198R AmeriCorps Reform Efforts B-277783 than the more detailed quarterly reports required under the AmeriCorps operating grants. If no Corporation funds are provided for managing the project, no financial reporting is required. Further, no minimum living allowance for participants has been set and no benefits are required. However, the service requirements are the same as those for participants of projects funded under the operating grants. AGENCY COMMENTS We provided a draft of this correspondence to Corporation officials for review and comment Corporation officials did not take issue with our analysis and results. They provided technical comments and suggested clarification of several statements, which we incorporated as appropriate. For the Corporation’s comments, see the enclosure to this correspondence. As we arranged with your offices, unless you publicly announce the contents of this correspondence earlier, we plan no further distribution until 30 days from its date. We will then send copies to the appropriate House and Senate committees and the Chief Executive Officer, Corporation for National and Community Service, and we will make copies available to others on request. Please contact me at (202) 512-7014if you or your staffs have any questions concerning this correspondence. Major contributors to this letter include Larry Horirko, Assistant Director; Carol Patey, Evaluator-in-Charge; and Nancy Kintner-Meyer and James Sparkling, Senior Evaluators. Carlotta C. Joyner Director, Education and Employment Issues Enclosure 10 GAOMEHS-?7-198R AmeriCorps Reform Efforts ENCLOSURE ENCLOSURF August 27,1997 CORPORATIOS Ms. Comelia M. Blanchette FOR KATIOVAL AssociateDirector, Education and Employment Issues F3S E R V I C E GeneralAccounting Office Washington, DC. 20548 Dear Ms. Blanchette, Thank you for the opporttmiry to commenton the General Accounting Office’s draf? report entitled “National Service Programs: Statusof AmeriCorps Reform Efforts.” As you lmow, in March 1996,I enteredinto a ten;point agreementwith Senator Grassleyon stepsto improve AmeriCorps. The spirit of this agreementwas that in lowering the cost of the program, improving the ability of our partners to increasethe shareof costs they bear, devolving responsibility to the states,rooting ourselves squarelyin the continuum of service, being unqualifiedly nonpartisanand non-political, and making our internal systemsmore effective, AmeriCorps would becomea program in which all Americanscould take pride. I believe the Corporation has lived up to both the letter and the spirit of the agreement,and that’swhy I am pleasedthat Sen.Grassley has askedthe GAO to look into ’ our reform efforts. While recognizing that the G-40’s analysisof our reform efforts focuseson four of the ten items in the agreement,we are proud of the progresswe have madein meetingall of the items in the agreement. As promised,the Corporation has taken strongmeasuresto prohibit AmeriCorps membersfrom lobbying or engaging in other prohibited political activities; to increasecollaborations with national non-profit organizationsand the participation of unstipendedvolunteers; to strengthenthe autonomy of statecommissions;to improve the grant review process;and to expandthe Corporation’s evaluationefforts. The four items on which the GAO hasfocusedall relate, in one way or another,to reducing the cost of AmeriCorps. Again, we are pleasedwith the progresswe havemadein this area.For example,the GAO examinedgrantsprovided to the sameprojectsover a three- . year period and found that Corporation funding for full-time AmeriCorps members decreased,while non-Corporation matching funds increased.Your draft report statedthat “[t]he increasein matching funds per FTE andthe decreasein Corporation fiinds per !ZTEare consistentwith the Corporation’s reform agreement.” :a:.%IYNL hC11C. rw wL.c~eon. DC_-9:-i - Is+& -0‘*:‘ww .~. mm. 11 GAO/HEHS-97-198R AmeriCorps Reform Efforts ENCLOSURE ENCLOSURE Page2 Most of the comments on this draft report are made in order to put your analysisinto a broader context. Others have beensuggestedto correct factual statementsor clarify the analysis. For example, AmeriCorps is not ‘America’s national serviceprogram,” but rather one of several national service programsadministered by the Corporation for National Service. The Corporation also administersthe Learn and ServeAmerica programandthe National Senior Service Corps program. In addition, AmeriCorps itself consistsof three distinct programs: AmeriCorps*StateNational, AmeriCorps*VISTA, and AmeriCorps*NCCC. The portion of my March 1996 agreementwith SenatorGrassleythat relates to costs per member focuseson the AmeriCorps*State/National program. In the section entitled “‘ResultsIn Brief,” the draft report assertsthat the Corporation lacks the data systemsto track whetherall of the cost reduction reformshave occurred. The only data related to these reforms that the Corporation doesnot routinely gatheris the increase in private sector contributions. The GAO gatheredbaselinedatafor its survey of Program Year 1, but did not gathersimilar data for Program Year 3. At this point, this leaves us with no comparative data. However,my letter datedAugust 15,1997, to your office requeststhat baseline data so that the Corporation can develop a survey instrumentand obtain approval from the Office of Managementand Budget for the information collection activity. Also, in “‘Results In Brief,” the draft report statesthat “[w]hile no federal agenciesare i AmeriCorps grantees in ProgramYear 3, many of their former subgranteeprojects,as allowed by law, continue to operateand receive Corporation funds. . __“ As a point of. clarification, these former subgranteesare not branch offices of, or in any other way related to, the federal agencies. Rather, they are local nonprofit organizationsthat have competedfor and won AmeriCorps grantsjust ashave other grantees. On page 4, the draft report statesthat proposedFTE matching funds decreased10 percent for Program Year 3. However,it should be noted that the overall proposedFTE program costs also declined 9.2 percentfor Program Year 3. The reducedcostsper FTE reflect a greater number of AmeriCorps membersin a larger numberof programs.a positive development. Footnote 6, on page 4, notesthat this draft report doesnot in&de the education award and a pro-rated portion of the Corporation’s overheadexpenses,information that was included in the GAO’s 1995 report. This exclusion is unfortunate becausethis information would have demonstrated a significantly lower FTE cost overall, due to the fact while the Corporation’s expensesfor overheadhave not increased,the number,ofMembershas. Finally, on page 6, the draft report statesthat the Corporation is consideringobtaining OMB approval to gather data on other sourcesof matching funds. While the Corporation is committed to gathering this data andwill include it in its requestto OMB, the project 12 GAOLHEHS-97-198R &eriCorps Reform Efforts ENCLOSURE ENCLOSURE Page3 requiresgatheringactualincurred costsand sourcesof funded expenditure. This information will not be availableuntil the endof Year 3 programs, many of which are still operating. Thesecommentsput in context, I hope, the broad reform effort we have made- both pursuantto the agreementwith SenatorGrassley and on our own. Thank you for considering thesecommentsin preparingthe final report. Sincerely, Harris Woff&d Chief Executive Officer .: i : _: -: . -. _. _.. (104898) 13 GAO/HERS-97-198R AmeriCorps Reform Efforts ‘_ 5, I: I!:,, ,i Ordering Information The first copy of each GAO report a&d testi&ony is free. Additional copies are $2 each. Orders should be sent to the following address, accomparued by a cheek or money order made out to the Superintendent of Documents, when -necessary. VISA and Mastercard credit cards are accepted, also. .Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U.S. General Accounting Office P.O. Box 37050 Washington, DC 20013 ii or vi& Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U.S. General Accounting ,Office Washington, DC . -. 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National Service Programs: Status of AmeriCorps Reform Efforts
Published by the Government Accountability Office on 1997-09-03.
Below is a raw (and likely hideous) rendition of the original report. (PDF)