1. Design bottom-up solution for problem of grant proliferation. (Create flexibility and encourage innovation by designing a bottom-up solution to the problem of grant proliferation and its accompanying red tape.) For decades, top-down proposals to solve the problems of federal grant management and administration have been offered. Most have failed, or failed to be completely effective, because of a combination of special interest politics, lack of effective inter- departmental planning and decisionmaking at the federal level, and competing and sometimes conflicting needs and priorities among and between other levels of government. The National Performance Review believes that the approach to the problem should be turned, quite literally, upside down. Instead of concentrating federal efforts on revamping all 600 grants, reconciling the thousands of rules and regulations, and anticipating every possible instance when flexibility and latitude might enhance actual program outcomes at the state or local level, the responsibility of identifying the obstacles and designing the best solution should be given to the states and localities themselves. Let the grant consolidation solutions come from the bottom-up, in response to actual barriers and obstacles in the field. Create a partnership that offers administrative and regulatory relief when and where it really matters, and let the learning that process could generate gradually build a body of knowledge about how the overall system can or should be reformed. Precedent for "bottom-up-type" local initiative exists in some individual federal agencies and programs. EPA is experimenting with greater flexibility and latitude in meeting regulatory and grant requirements; the Job Training Partnership Act provided for fairly extensive local public-private partnership and autonomy; the Intermodal Surface Transportation Efficiency Act (ISTEA) provides for some greater local discretion. Challenging Assumptions. Notwithstanding some of these experiments, the bottom-up concept will challenge many long standing federal attitudes and bureaucratic assumptions: --states and localities can't be trusted to protect minority rights and ensure fairness and equity; --if the federal government doesn't punish errors and omissions they will become the norm--federal systems have to prevent errors (even if it means impeding results); --statutory and administrative rules and regulations can control jurisdictions or grant recipients otherwise inclined to fraud, waste, and abuse; --each and every congressional committee and federal department and agency has a right to design its own standards and priorities--regardless of how it affects the citizen-customer; --the federal government is more competent and exercises better judgment than state and local elected officials and managers; --flexibility and latitude are inconsistent with performance and delivery on national programmatic goals; and --the federal government can design how best to do things, as well as the overall outcomes desired, from desks and offices in executive agencies and the halls of Congress in Washington, D.C. Each of these notions has had merit at points in our history and with respect to specific, often notorious cases of abuse. But they do not provide a foundation for reinventing government or refocusing our collective intergovernmental effort toward outcomes instead of process. To create a bottom-up solution, federal legislation will be required. Omnibus legislation that authorizes states and localities to consolidate funding streams and reconcile contradictory rules as a matter of right (for smaller amounts) and as a matter of federal-state-local negotiation for more complicated and comprehensive proposals should be the goal. Incentives should be provided in the legislation to encourage states and localities to design solutions from the citizen-customers' perspective--to integrate services at the point of contact between citizen- customers and the government and to eliminate their own state and local bureaucratic barriers to more effective outcomes. Partnership should be the hallmark of the proposal-- between the federal and lower levels of government, and among and between the public, private, and private non-profit sectors at the service delivery level. Incentives to obtain broad stakeholder commitment to new ways of service delivery and to reduce paperwork, monitoring, and process controls should be designed. At the same time legitimate federal interests must be protected and compliance with broad cross-cutting regulations (equal employment opportunity, worker health and safety, for example) ensured. By focusing on what outcomes should be rather than precisely how to achieve them, both the flexibility needed of states and localities and the need to protect legitimate federal interests can be met. Reviewers of the bottom-up concept have raised a number of legitimate concerns and questions: --What funding streams will be included? --If states and localities are allowed to consolidate some smaller amounts and reconcile regulatory conflicts associated with them as a matter of right, how high or low should the threshold be? --How can accountability to Congress and federal departments be ensured? --How can yet another bureaucratic structure and more process to implement such a program be avoided? --How will these recommendations be affected by, or can they affect, administration initiatives in the area of health and welfare reform? --How would conflicting eligibility standards be reconciled and what are the potential consequences of letting states and localities choose the least restrictive rules? Each of these issues can be successfully addressed if federal, state, and local officials collaborate on drafting the necessary legislation and pursue its implementation in good faith. The following suggests how a bottom-up solution could work--it is intended to be illustrative rather than prescriptive. How Consolidation Would Work. After a grant award of federal funds has been made to a state, or local government agency, that recipient agency may elect to consolidate all or part of the grant program with another program serving the same customers.[Endnote 3] To be eligible for consolidation, the following requirements must be met: 1. The integrated program must demonstrably address the national objectives set forth in the legislation authorizing the federal program to be consolidated. 2. The consolidating agency must define in writing, after appropriate consultation with stakeholder groups having an interest in the program, the measures of effectiveness that will be used to evaluate the success of the consolidated program. 3. If the federal program being consolidated is small (each individual grant under $10 million), the consolidation is triggered by written notification to the responsible federal awarding office (and state agency, if applicable) of the decision to consolidate. The awarding office may respond with comments within 30 days. The notification must: a. Describe the way in which the consolidation will provide effective integration of service delivery, including appropriate descriptive information about the integrated program, such as information about the customers served or area covered; b. Explain how the consolidated program will demonstrably address the national objectives of the federal program so consolidated; and c. Define the measures of effectiveness that will be used to judge the success of the program. 4. If the federal program being consolidated is large, i.e., any individual grant over $10 million, the federal awarding office(s) (and state, if applicable) must approve the proposal to consolidate. Procedurally, the consolidating agency will notify each responsible federal (and state) agency, providing the same information required for small bottom-up consolidations. Other Features of the Bottom-up program To ensure consistency with federal priorities and interests and to minimize red tape: --The cross-cutting requirements with which grant recipients must comply (e.g., civil rights compliance) would be unaffected by this approach. --Regular reporting on progress or service delivery goals to both federal agencies and congressional committees is assumed. --One of the primary impediments to effective service delivery integration is the confusing array of often conflicting rules and regulations. Under the concept of bottom-up grant consolidation, the consolidating agency is authorized to resolve any conflict between the statutes or regulations of consolidated programs, by selecting which statute or regulation will be followed. The intent is to empower the integrating state or local agency to resolve such conflicts in favor of a customer-oriented program of service. --A state or local government that has successfully integrated, or which demonstrates plans to effectively integrate, a federal grant program with other services will be accorded preference in future discretionary funding of the consolidated program. --A federal program that is administered through states is eligible for consolidation at the point of service delivery. If the consolidating agency is a unit of local government, the state as well as the responsible federal agency must be notified of the consolidation, and on large consolidations should be included in the decisionmaking review. Endnotes 3. ". . . the same customers," must be liberally construed. Obviously a definition drawn to the specific individual would completely vitiate the concept.
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