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DOCUMENIT RESUME
05614 - (B0965898]
Third Party Funding Agreements: No Longer Appropriate for
Serving the Handicapped Through the Vocational Rehabilitation
Program. HRD-78-7; B-164031(1). April 4, 1978. 77 pp. * 4
appendices (5 pp.).
Report to the Congress; by Eluer B. Staats, Comptrtller General.
Issue Area: Federally Sponsored or Assisted Employment and
Training Programs (3200); Employment and Training Programs:
Employability of Selected Target Groups (3201).
Contact: Human Resources Div.
Budget Function: Education, Manpover, and Sccial Services: Other
Labor Se~vices (505).
organization Concerned: Department of Health, Education, and
Welfare.
Congressional Relevance: House Conittee on Education and Labor;
Senate Committee on Hunan Resources; CoPgress.
Authority: Smith-Peas Act (of ) 1920 (41 Stat- 735).
Rehahilitation Act of 1973 (29 U.S.C. 7011. Education of the
Handicapp-.d Anendments of 1974 (P.L. 93-380). Education for
All Handicc.ned Children Act (P.L. 94-142). Education of the
Handicapped Act. P.L. 91-230. -45 C.F.R. 1361.
The vocational re: abilitation program operates as a
Federal-State program, the Federal government supplying
leadership and the States administering the program. State
vocaticnal rehab litation agencies may enter into agreements
with other State and local agencies to establish joint programs
of service for the handicapped. These third party agreements
have been used to financially expand the program by providing
States with additional matching funds and have acted as a means
of expanding services to the handicapped and establishing
cooperatio between agencies. Findings/Conclusions: At present,
agencies are not complying with Federal regulattcUs, and
expenditures are being used to subsidize third party programs.
As a result, many State agencies are not meeting the programns
aandatcry matching requirements. Services provided in
cooperative programs often duplicate services provided by the
cooperating agency. Many persons served under these agreements
are only marginalJy handicapped, contrary to legislative
requirements ior pri rity to be given to the most severely
handicapped. Costs aid accomplishments of third party progr&La
often are not accurately reported. State rehabilitation agencies
are reporting only a portion of the expenditures on clients and
claiming expenditures made by otheL agencies for costs they
would normally incur for requirea services. The validity of
successful rehabilitations attributed to the cooperative
programs is qestionable. Recommendations: State rehabilitation
ageucies should continue to cooperate vith cther agencies, but
staffing, referral, and service delivery patterns established
through the use of third party funding agreements should be](ViewImageLocal?handle=hein.gao/gaobaawzr0001&div=1&collection=&method=preview&ext=.png&size=3)