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GGD-80-82 1 (1980-06-12)

handle is hein.gao/gaobabaqt0001 and id is 1 raw text is: I ftslk COMPTROLLER GENERAL OF THE UNITED STATES WASHINGTON. D.C. 24 JUNE 12, 1980 B-199053 The Honorable L. H. Fountain Chairman, Subcommittee on Intergovernmental Relations and Human Resources /7SL o/. os Committee on Government Operations House of Representatives The Honorable Bill Bradley Chairman, Subcommittee on Revenue Sharing, Intergovernmental Revenue Impact, and Economic Problems Committee on Finance i c //A C) United States Senate 112542 Subject: ore Flexibility Needed in Setting Revenue -Sharing Adjustment Reservesj(GGD-80-82) We reviewed the size of the Revenue Sharing adjustment reserve fund to determine if the Secretary of the Treasury had withheld only funds necessary to cover expected claims. Because these reserves defer authorized budget expenditures, they should not exceed levels necessary to reimburse known and expected claims. The Office of Revenue Sharing accumu- lates the reserves by withholding a portion of State and local government entitlements (not exceeding 0.5 percent), and it uses them to cover adjustments resulting from recipi- ent claims. Currently the reserves total $112 million even though the Office expects to distribute only about $2.5 million in claims during fiscal year 1980. The Revenue Sharing adjustment reserves for most States are substantially larger than necessary but, in a few States, because of larger than normal claims, they are or have been too low. Maintaining larger than necessary reserves delays revenue sharing recipients from receiving funds to which they are entitled and maintaining smaller than necessary reserves precludes the Secretary from making timely adjustments for underpayments. The current imbalance between the size of the reserve accounts and the size of past claims has occurred for the following reasons. --The 0.5 percent ceiling on the amount the Office can withhold inhibits its ability to make large adjustments when necessary. (018460) 0

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