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GGD-81-7 1 (1980-12-23)

handle is hein.gao/gaobabbjb0001 and id is 1 raw text is: 





                                                               /j72 o

BY THE COMPTROLLER GENERAL



Report To The Congress


OF THE UNITED STATES




Proposed Changes In Federal

Matching And Maintenance Of

Effort Requirements For

State And Local Governments


Federal matching and maintenance of effort
requirements do not often effectively promote
the Federal interest of enhancing the fiscal and
management commitments of State and local
governments to Federal programs. While more
stringent Federal requirements would promote
these Federal fiscal and managerial objectives,
they would screen out needy grantees from
participating in the program, thus jeopardizing
the ability of the intergovernmental grant sys-
tem to provide services of national interest on
a nationwide basis. Also, by encumbering
State and local funds in a growing number of
federally funded areas, the requirements in-
duce distortion of State and local budget pri-
orities and may promote fiscal stress as well.

GAO recommends that matching require-
ments be strengthened but used more sparingly
and only where a clearly articulated Federal
interest does not conflict with the broader
purposes of Federal programs themselves,
Maintenance of effort requirements serve a
clear, primary Federal interest, but should be
changed to more effectively prevent fiscal sub-
stitution while not penalizing bona fide State
and local spending reductions.






                                                                    GGD-81-7
                                                    II (tP/~U ECEMBER 23, 1980

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