United States Government Accountability Office

GAO Report to Congressional Requesters

COMMUNITY 

SERVICES BLOCK 

GRANT PROGRAM 

HHS Should Improve 

Oversight by Focusing 

Monitoring and 

Assistance Efforts on 

Areas of High Risk 

June 2006 

 

GAO-06-627 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2006

COMMUNITY SERVICES BLOCK GRANT 

PROGRAM 

HHS Should Improve Oversight by 

Focusing Monitoring and Assistance 

Efforts on Areas of High Risk 

Highlights of GAO-06-627, a report to 

congressional requesters 

The Community Services Block 

Grant (CSBG) provided over $600 

million to states in fiscal year 2005

to support over 1,000 local 

antipoverty agencies. The 

Department of Health and Human

Services’s (HHS) Office of 

Community Services (OCS) is 

primarily responsible for 

overseeing this grant; states have

oversight responsibility for local 

agencies. 

At the request of Congress, GAO is 

providing information on (1) HHS’s 

compliance with federal laws and 

standards in overseeing states, (2) 

five states’ efforts to monitor local 

agencies, and (3) federal CSBG 

training and technical assistance 

funds targeted to local agencies

with problems and the results of 

the assistance. States were selected 

based on varying numbers of local 

agencies and grant amounts and 

recommendations from 

associations, among other criteria. 

What GAO Recommends

GAO recommends that the

Assistant Secretary for Children

and Families direct OCS to conduct 

a risk-based assessment of state 

CSBG programs, have policies and

procedures to help ensure

monitoring focuses on states with 

the highest risk, issue guidance on

state monitoring requirements and 

training and technical assistance 

reporting, and implement a 

strategic plan to guide its training

and technical assistance efforts. 

The agency agreed with our 

recommendations and has made

plans to address them. 

www.gao.gov/cgi-bin/getrpt?

To view t he full product, including the scope 

and methodology, click on the link above. 

For more information, contact Marnie S. 

Shaul at (202) 512-7215 or shaulm@gao.gov. 

In a February 2006 letter (GAO-06-373R), GAO notified OCS that it lacked 

effective policies, procedures, and controls to help ensure that it fully met 

legal requirements for monitoring states and internal control standards. At 

that time, GAO also offered recommendations for improvements. OCS has 

responded that it intends to take actions to address each of those 

recommendations. In addition, GAO found that OCS did not routinely collect 

key information, such as results of state monitoring reports, or 

systematically use available information, such as state performance data, to 

assess the states’ CSBG management risks and target monitoring efforts to 

states with the highest risk. 

All five states we visited conducted on-site monitoring of local agencies with

varying frequency and performed additional oversight efforts. Two state 

offices visited each local agency at least once between 2003 and 2005, while 

the other three states visited local agencies less frequently. State officials

we visited had different views on what they must do to meet the statutory 

requirement to visit local agencies at least once during each 3-year period, 

and OCS has not issued guidance interpreting this requirement. Officials in 

all five states also provided oversight in addition to monitoring through such 

activities as reviewing reports and coordinating with other federal and state 

programs. 

OCS targeted some training and technical assistance funds to local grantees 

with financial or management problems, but information on the results of 

this assistance is limited. In fiscal years 2002 through 2005, OCS designated 

between $666,000 and $1 million of its annual $10 million training and 

technical assistance funds to local agencies with problems, but had no 

process for strategically allocating these funds to areas of greatest need. In 

addition, the final reports on awarded grants indicated that some local 

agencies had improved, but the reports provided no information on the 

outcomes of assistance for nearly half of the 46 local agencies that GAO 

identified as being served. See figure below. 

Results of Assistance to 46 Local Agencies as Reported by Grantees, Fiscal Years 2002 

through 2005 

Results

Number of local agencies targeted for assistance

Source: GAO analysis of grantee progress reports.

0 5 10 15 20 25

Results unclear

Agency problems not resolved

Agency closed

Agency showed improvement

Results unknown 21

18

3

2

2

GAO-06-627.
Contents 

Letter 1

Results in Brief 3 

Background 5

OCS Lacks Internal Controls and a Risk Management Framework 

Needed to Carry Out Effective Monitoring Efforts 10 

Frequency of State On-Site Monitoring Varied, but Selected States 

Performed Other Oversight Activities 13 

OCS Targeted Some Training and Technical Assistance Funds to 

Grantees with Problems, but Information on Results Is Limited 18 

Conclusions 22

Recommendations for Executive Action 22 

Comments from the Department of Health and Human Services on 

Our Evaluation 23 

Appendix I Objectives, Scope, and Methodology 24 

Appendix II Community Services Block Grant Program: HHS 

Needs to Improve Monitoring of State Grantees, 

GAO-06-373R 27 

Appendix III The Department of Health and Human Services’s 

Response to GAO-06-373R 30 

Appendix IV Ranking of States Based on Percentage of Local 

CSBG Subgrantees with Single Audit Findings 33 

Appendix V Comments from the Department of Health & Human 

Services 38 

Appendix VI GAO Contact and Staff Acknowledgments 42 

Page i GAO-06-627 Community Services Block Grant Program
Related GAO Products 43 

Tables 

Table 1: Local Agency Monitoring Visits Conducted by Select 

States, 2003-2005 14 

Table 2: Total CSBG Funds, Expenditures for Administration, and 

Numbers of CSBG Staff and Local Agencies, Fiscal Year 

2005 15 

Table 3: Office of Community Services CSBG Training and 

Technical Assistance Funding, Fiscal Years 2002 to 2005 19 

Table 4: States Visited in Our Study 25 

Table 5: Single Audit Data for States Related to Findings among 

Local CSBG Subgrantees Ranked by the Percentage of 

Agencies with Findings, 2002 34 

Table 6: Single Audit Data for States Related to Findings among 

Local CSBG Subgrantees Ranked by the Percentage of 

Agencies with Findings, 2003 36 

Figures 

Figure 1. CSBG Network’s Total Resources, Fiscal Year 2004 10 

Figure 2: Results of Assistance to 46 Local Agencies from Special 

State Technical Assistance and Peer-to-Peer Grants as 

Reported by Grantees, Fiscal Years 2002 through 2005 20 

Page ii GAO-06-627 Community Services Block Grant Program
Abbreviations 

ACF Administration for Children and Families 

CAA community action agency

CDBG Community Development Block Grant 

CSBG Community Services Block Grant 

DOE Department of Energy 

HHS Department of Health and Human Services 

LIHEAP Low-Income Home Energy Assistance Program 

MICA Mid-Iowa Community Action 

NASCSP National Association of State Community Service Programs 

OCS Office of Community Services 

OMB Office of Management and Budget 

ROMA Results Oriented Management and Accountability 

SSTA Special State Technical Assistance 

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Page iii GAO-06-627 Community Services Block Grant Program
United States Government Accountability Office

Washington, DC 20548 

June 29, 2006 

The Honorable Howard P. “Buck” McKeon 

Chairman 

Committee on Education and the Workforce 

House of Representatives 

The Honorable Howard P. “Buck” McKeon 

Chairman 

Committee on Education and the Workforce 

House of Representatives 

The Honorable Michael N. Castle 

Chairman 

Subcommittee on Education Reform 

Committee on Education and the Workforce 

House of Representatives 

The Honorable Michael N. Castle 

Chairman 

Subcommittee on Education Reform 

Committee on Education and the Workforce 

House of Representatives 

The Honorable John A. Boehner 

House of Representatives 

The Honorable Tom Osborne 

House of Representatives 

The Community Services Block Grant (CSBG) provided over $600 million 

to states in fiscal year 2005 to support over 1,000 local antipoverty 

agencies. These local agencies, predominately community action agencies

(CAA), often use CSBG to support their institutional frameworks for 

providing services, including staff and facilities. They also use CSBG 

dollars to leverage other public and private resources to support a variety

of activities, including Head Start programs, low-income home energy

assistance programs, and low-income housing. The Office of Community 

Services (OCS) within the Department of Health and Human Services 

(HHS) is primarily responsible for overseeing this block grant, and the 

states are responsible for overseeing local agencies. In our February 2006 

letter to HHS (GAO-06-373R), GAO reported several challenges that OCS 

faced in ensuring effective oversight of CSBG funds and, at that time, 

made recommendations for improvements. 

The Community Services Block Grant (CSBG) provided over $600 million 

to states in fiscal year 2005 to support over 1,000 local antipoverty 

agencies. These local agencies, predominately community action agencies

(CAA), often use CSBG to support their institutional frameworks for 

providing services, including staff and facilities. They also use CSBG 

dollars to leverage other public and private resources to support a variety

of activities, including Head Start programs, low-income home energy

assistance programs, and low-income housing. The Office of Community 

Services (OCS) within the Department of Health and Human Services 

(HHS) is primarily responsible for overseeing this block grant, and the 

states are responsible for overseeing local agencies. In our February 2006 

letter to HHS (GAO-06-373R), GAO reported several challenges that OCS 

faced in ensuring effective oversight of CSBG funds and, at that time, 

made recommendations for improvements. 

The CSBG Act requires OCS to visit several states each year to evaluate 

the states’ use of CSBG funds and report on its findings to the visited 

states and Congress annually. The law also requires OCS to provide 

training and technical assistance funds to states in order to, among other 

purposes, support state monitoring efforts and improve local programs’ 

quality. The law requires states to visit all local agencies at least once 

during each 3-year period and more often if local agencies fail to meet 

The CSBG Act requires OCS to visit several states each year to evaluate 

the states’ use of CSBG funds and report on its findings to the visited 

states and Congress annually. The law also requires OCS to provide 

training and technical assistance funds to states in order to, among other 

purposes, support state monitoring efforts and improve local programs’ 

quality. The law requires states to visit all local agencies at least once 

during each 3-year period and more often if local agencies fail to meet 

Page 1 GAO-06-627 Community Services Block Grant Program
state-established goals, requirements, and standards. The Office of 

Management and Budget (OMB) issued guidance to assist auditors in 

determining whether states are carrying out their CSBG monitoring 

responsibilities to visit each local agency once every 3 years in compliance 

with the law. The law also requires states to report performance data to 

OCS annually, such as data on the number of people served by different 

antipoverty programs. Additionally, other federal laws and standards for 

ensuring accountability, such as internal control standards and the Single

Audit Act, affect CSBG management and reporting. 

To better understand the efforts that OCS and states have undertaken to 

oversee the use of CSBG funds, we agreed to examine (1) the extent to 

which HHS’s oversight of state efforts to monitor local agencies complied 

with federal laws and standards, (2) the efforts selected states have made

to monitor local agencies’ compliance with fiscal requirements and 

performance standards, and (3) the extent to which HHS targeted federal 

CSBG training and technical assistance funds to efforts to assist local 

agencies with financial or management problems and what is known about 

the results of the assistance. 

To address the first objective, we reviewed federal laws and standards to 

obtain information on OCS’s requirements for providing oversight to 

states, interviewed federal officials on their efforts, and obtained available 

documentation on these efforts from fiscal year 2003 through fiscal year 

2005. To assess state monitoring efforts, we reviewed federal laws and 

standards to obtain information on states’ CSBG oversight responsibilities 

and interviewed and collected documentation from state and local officials 

in Illinois, Pennsylvania, Missouri, Texas, and Washington on state 

oversight efforts from fiscal year 2003 through fiscal year 2005. We 

selected states that had, among other characteristics, varying grant 

amounts and numbers of local agencies, state administrative structures 

that may have allowed for collaboration with other programs that provide 

funds to CAAs, varying Single Audit results among their local agencies, 

and recommendations from CSBG associations for promising oversight 

practices. We also obtained information on state CSBG audit findings from 

auditors in the five states. In addition, we interviewed federal and state 

officials in Head Start, the Low-Income Home Energy Assistance Program 

(LIHEAP), and the Community Development Block Grant Program 

(CDBG)—three programs from which CAAs often receive funds—to 

obtain information on the degree to which those officials collaborate with 

federal and state CSBG officials with regard to oversight. Our results on 

selected state monitoring efforts are not generalizable to all states. For the 

third objective, we interviewed federal officials and their contractors that 

Page 2 GAO-06-627 Community Services Block Grant Program
provide training and technical assistance to obtain information on whether 

OCS grants were targeted and how they determined that the grantsupported efforts were effective. We also obtained and reviewed training 

and technical assistance grant applications and reports for the two 

programs that support efforts to assist local agencies for fiscal year 2002 

through fiscal year 2005 to assess these efforts and their results. 

Furthermore, we reviewed Single Audit data to assess the extent to which 

states had local agencies with findings reported in fiscal years 2002 and 

2003, the most recent information available. All 50 states, the District of 

Columbia, and Puerto Rico were included in our review of Single Audit 

findings. We assessed the reliability of Single Audit and programmatic data 

by conducting electronic and manual data testing and interviewing 

officials knowledgeable about the data. We determined that the data were

sufficiently reliable for the purposes of this report. (See app. I for a more 

detailed description of the scope and methodology of our review.) We 

performed our work between July 2005 and May 2006 in accordance with 

generally accepted government auditing standards. 

In its efforts to oversee states, OCS lacked effective policies, procedures, 

and controls to help ensure that it fully met legal requirements for 

monitoring states and federal internal control standards. OCS also lacked 

a process to assess states’ CSBG management risks. Although OCS met 

statutory requirements by visiting nine states in fiscal years 2003 through 

2005, it did not issue reports to states and annual reports to Congress on 

monitoring visits, which is also statutorily required. In addition, OCS did 

not meet internal controls standards because it sent monitoring teams 

without adequate financial expertise and lost documentation from state 

visits it conducted in fiscal years 2003 and 2004. We notified the Assistant 

Secretary for Children and Families about OCS’s lack of effective CSBG 

monitoring controls and offered recommendations for improvements in a 

letter dated February 7, 2006. OCS has responded that it intends to take 

actions to address each of our recommendations presented in the letter. In 

addition to issues previously reported, we found that OCS did not 

systematically use available information, such as state performance data 

and audit findings, or collect key information, such as the results of state 

monitoring of local grantees. Such data would allow OCS to assess states’ 

risk related to managing CSBG programs and target its limited monitoring 

resources to states with the highest risks. Federal officials said that they

visited states after learning from state or local officials that some grantees 

had management challenges, such as financial problems or staff turnover. 

However, in other instances, OCS officials could not recall their basis for 

selecting states for monitoring visits. 

Results in Brief 

Page 3 GAO-06-627 Community Services Block Grant Program
All five states we visited conducted on-site monitoring of local agencies 

with varying frequency and performed additional oversight efforts, such as 

reviewing financial and programmatic reports from local agencies. 

Officials in Illinois and Texas conducted at least one on-site visit to each 

local agency between 2003 and 2005. However, officials in the other three 

states visited their local agencies less frequently. Pennsylvania and 

Washington officials monitored over 90 percent of their local agencies 

between 2003 and 2005. Missouri visited about 20 percent during this time 

and allowed up to 5 years between visits to some agencies. While state 

offices varied in the frequency of their monitoring visits, officials in all 

states told us that they visited local agencies with identified problems 

more often, and three states conducted risk assessments to determine 

which local agencies should receive additional visits. State officials we 

visited have taken different views on what they must do to meet the legal 

requirement to visit local agencies at least once during each 3-year period,

and OCS has not issued guidance interpreting this requirement. During a 

2004 audit, Pennsylvania state auditors, using OMB guidance, found the 

state CSBG program to be out of compliance with federal requirements 

because it did not monitor local agencies once every 3 years. In contrast, 

although Missouri officials visited 4 of 19 local agencies between 2003 and 

2005, the state CSBG office maintains it is in compliance with monitoring 

requirements because it plans to visit all local agencies within the 3-year 

periods of 2001 to 2003 and 2004 to 2006. We also found that state offices

varied in their capacity to conduct monitoring visits. Specifically, Missouri, 

Pennsylvania, and Washington officials told us that challenges, such as 

staff shortages, affected their ability to monitor local agencies. 

Nonetheless, each of the five state programs that we visited regularly 

reviewed local agencies’ reports, including their community action plans, 

budgets, and performance data. State CSBG officials also reviewed Single 

Audit reports for local agencies when CSBG findings were mentioned. In 

addition, CSBG state programs established relationships with officials in 

other programs that provided funds to the same local grantees to learn the 

results of other monitoring efforts. Generally, state programs offered 

training and technical assistance to local agencies with findings from onsite monitoring visits. 

OCS targeted some training and technical assistance funds to local 

grantees with financial and programmatic management problems, but 

information on the results of this assistance is limited. In fiscal years 2002 

through 2005, OCS designated between $666,000 and $1 million of its 

annual $10 million training and technical assistance funds to local 

agencies with problems, but had no process in place to strategically 

allocate these funds to areas of greatest need. Without systematically 

Page 4 GAO-06-627 Community Services Block Grant Program
tracking which local agencies experienced problems and what those 

problems were, OCS did not have adequate information to determine 

whether its training and technical assistance programs and the amounts 

dedicated to them were appropriate for addressing the greatest needs of 

local agencies and the state agencies that oversee them. OCS currently 

allocates training and technical assistance funds based on input from some 

state and local agencies, but this process has not been guided by a 

comprehensive assessment of state and local needs. Additionally, there is

limited information on the results of OCS’s grant programs that target 

local agencies with problems. The final reports on awarded grants 

provided no information on the outcomes of assistance for nearly half of 

the 46 local agencies that we identified as being served. 

To provide better oversight of state agencies, we recommended that the

Assistant Secretary for Children and Families direct OCS to (1) conduct a 

risk-based assessment of state programs by systematically collecting and 

using information, (2) establish policies and procedures to help ensure 

monitoring is focused on states with the highest risks, (3) issue guidance 

on state responsibilities with regard to complying with the requirement to 

monitor local agencies during each 3-year period, (4) establish reporting 

guidance on training and technical assistance grants that allows OCS to 

obtain information on outcomes for local agencies, and (5) implement a 

strategic plan that will focus its training and technical assistance efforts on 

areas in which states face the greatest needs. In its written comments on a 

draft of this report, HHS officials agreed with our recommendations and 

stated that they have made plans to address them. 

The CSBG program provides funds to state and local agencies to support 

efforts that reduce poverty, revitalize low-income communities, and lead

to self-sufficiency among low-income families and individuals.1

 CSBG 

dates back to the War on Poverty of the 1960s and 1970s, which 

established the Community Action program, under which the nationwide 

network of local community action agencies was developed. A key feature 

of Community Action was the direct involvement of low-income people in

the design and administration of antipoverty activities through mandatory 

representation on local agency governing boards. The federal government

had direct oversight of local agencies until 1981, when Congress created 

Background 

 1

 Territories and tribes also receive CSBG funds but were not included in the scope of our

work. 

Page 5 GAO-06-627 Community Services Block Grant Program
CSBG and designated states as the primary recipients. States subgrant 

funds to over 1,000 eligible local agencies that are primarily community 

action agencies. 

In order to ensure accountability, both federal and state program offices 

have oversight responsibilities, including on-site monitoring of grantees 

and subgrantees, following-up on monitoring findings, and providing 

technical assistance. 

Federal Role OCS administers CSBG and is required by law to conduct on-site 

compliance evaluations of several states in each fiscal year, report to 

states on the results of these evaluations, and make recommendations for 

improvements. Upon receiving an evaluation report, states must submit a 

plan of action that addresses recommendations. In addition, OCS is 

required to annually report to Congress on the performance of the CSBG 

program, including the results of state compliance evaluations. For states 

to receive CSBG funding, they must submit, at least every 2 years, an 

application and plan to OCS stating their intention that funds will be used 

to, among other things, support activities to help families and individuals 

with the following: achieve self-sufficiency, find and retain meaningful 

employment, attain an adequate education, make better use of available 

income, obtain adequate housing, and achieve greater participation in 

community affairs. 

The CSBG Act requires OCS to reserve 1.5 percent of annual 

appropriations (about $10 million in fiscal year 2005) for training and 

technical assistance for state and local agencies; planning, evaluation, and 

performance measurement; assisting states with carrying out corrective 

action activities; and monitoring, reporting, and data collection activities. 

The fiscal year 2005 Consolidated Appropriations Act conference report 

directed OCS to develop a 3-year strategic plan to guide its training and 

technical assistance efforts. OCS has provided assistance to local agencies

with problems primarily through two grant programs: Special State 

Technical Assistance (SSTA) Grants and the Peer-to-Peer Technical 

Assistance and Crisis Aversion Intervention (Peer-to-Peer) Grants. OCS 

generally awarded Special State Technical Assistance Grants to states or 

state associations of community action agencies to provide support to 

local agencies that have problems. Since 2001, OCS has awarded the Peerto-Peer Grant solely to Mid-Iowa Community Action (MICA), a community 

action agency, to offer problem assessment, interim management, and 

other technical assistance services to local agencies with problems. 

Page 6 GAO-06-627 Community Services Block Grant Program
In addition to the federal requirements in law, OCS, like other federal 

agencies, is required to adhere to internal control standards established by 

the Office of Management and Budget and GAO in order to help ensure 

efficient and effective operations, reliable financial reporting, and 

compliance with federal laws.2

 Internal controls help government program 

managers achieve desired results through effective stewardship of public 

resources. Such interrelated controls comprise the plans, methods, and 

procedures used to meet missions, goals, and objectives and, in doing so, 

support performance-based management and should provide reasonable 

assurance that an organization achieves its objectives of (1) effective and 

efficient operations, (2) reliable reporting, and (3) compliance with 

applicable laws and regulations. 

Standards for Internal 

Control in the Federal 

Government 

The five components of internal controls are 

• Control environment: creating a culture of accountability within an 

entire organization—program offices, financial services, and regional 

offices—by establishing a positive and supportive attitude toward the 

achievement of established program outcomes. 

• Risk assessment: identifying and analyzing relevant risks, both internal 

and external, that might prevent the program from achieving

objectives, and developing processes that can be used to form a basis 

for the measuring of actual or potential effects of relevant factors and 

manage their risks. During such a risk assessment process, managers 

should consider their reliance on other parties to perform critical 

program operations. 

• Control activities: establishing and implementing oversight processes 

to address risk areas and help ensure that management’s directives—

especially about how to mitigate and manage risks—are carried out 

and program objectives are met. 

• Information and communication: using and sharing relevant, reliable, 

and timely operational and financial information to determine whether 

the agency is meeting its performance and accountability goals. 

 2

 For more information on internal control standards, see GAO, Standards for Internal 

Control in the Federal Government, GAO/AIMD-00-21.3.1 (Washington: D.C.: November 

1999), and Office of Management and Budget, Circular No. A-123, Management’s

Responsibility for Internal Control, (Washington: D.C.: Dec. 21, 2004). 

Page 7 GAO-06-627 Community Services Block Grant Program
• Monitoring: tracking improvement initiatives over time and identifying 

additional actions needed to further improve program efficiency and

effectiveness. 

State Role The CSBG Act requires each state to designate a lead agency to administer 

CSBG funds and to provide oversight of local agencies that receive funds. 

States are required to award at least 90 percent of their federal block grant 

allotments to eligible local agencies, but are allowed to determine how 

CSBG funds are distributed among local agencies. States may use up to 

$55,000 or 5 percent of their CSBG allotment, whichever is higher, for 

administrative costs.3

 States may use remaining funds for the provision of 

training and technical assistance, coordination and communication 

activities, payments to ensure they target funds to areas with the greatest 

need, support for innovative programs and activities conducted by local 

organizations, or other activities consistent with the purposes of the CSBG 

Act. In addition, state and local agencies that expend $500,000 or more 

($300,000 or more prior to 2004) in total federal awards are required under 

the Single Audit Act to undergo an audit annually and submit a report to 

the Federal Audit Clearinghouse. Furthermore, individual federal funding

sources may also be reviewed annually under the Single Audit, depending

on the size of these expenditures.4

The CSBG Act requires states to monitor local agencies to determine 

whether they meet performance goals, administrative standards and 

financial management and other state requirements. States are required to

perform this monitoring through a full on-site review of each local agency

at least once during each 3-year period and to conduct follow-up reviews, 

including prompt return visits, to local agencies that fail to meet the goals,

standards, and requirements established by the state. OMB has issued 

Single Audit compliance review guidance for CSBG that explicitly 

mentions that when auditors review state programs, they should 

determine whether states are visiting each local agency once every 3 years 

to assess if states comply with the law. States must also offer training and 

technical assistance to failing local agencies. 

 3

 Administrative costs are not directly associated with providing services and can include 

staff salaries and costs related to reporting program data. 

4

 For a specific funding source to be reviewed under a Single Audit annually, its

expenditures would have to represent between 0.15 percent and 3 percent of the total 

amount of federal funds expended by a state or local agency. The threshold varies

depending on total expenditures of federal awards. 

Page 8 GAO-06-627 Community Services Block Grant Program
Local agencies are required to submit a community action plan to states 

that contains a community needs assessment, a description of the service

delivery system for services provided by or coordinated with CSBG funds, 

a description of how they will partner with other local agencies to address 

gaps in services they provide, a description of how funds will be 

coordinated with other public and private resources, and a description of 

how funds will be used to support innovative community and 

neighborhood-based initiatives. 

The CSBG Act requires both state and local agencies to participate in a 

performance measurement system. Results Oriented Management and 

Accountability (ROMA) is the OCS-sponsored performance management 

system that states and local agencies use to measure their performance in 

achieving their CSBG goals. State agencies report annually on ROMA using 

the CSBG Information System survey, which the National Association for 

State Community Services Programs (NASCSP) administers. 

CSBG Network Resources In fiscal year 2004, the network of local CSBG agencies received almost 

$9.7 billion from all sources. About $7 billion of these funds came from 

federal sources, including about $600 million from CSBG. Other federal 

programs funding the CSBG network included Head Start, LIHEAP, CDBG, 

Child Care and Development Fund, Temporary Assistance for Needy 

Families, and the Social Services Block Grant (see fig. 1). HHS’s 

Administration for Children and Families contributed 90 percent of the 

$4.4 billion in funds provided to local agencies through HHS. 

Page 9 GAO-06-627 Community Services Block Grant Program
Figure 1. CSBG Network’s Total Resources, Fiscal Year 2004 

11%

72%

15%

12%

10%

9%

3%

4%

5%

5%

40%

7%

10%

Source: GAO analysis of data from NASCSP.

Private

Head Start and Early Head Start/HHS

 Department of Energy/Weatherization 

All other

Department of Agriculture

Department of Labor

CSBG/HHS

Department of Housing and Urban Development:

Housing/CDBG

LIHEAP/HHS

Other HHS

Local

Federal funds to local agencies

State

Federal

Note: Percentages do not sum to 100 because of rounding. 

HHS received about $637 million in CSBG funding for fiscal year 2005 and 

about $630 million for fiscal year 2006. 

In its efforts to oversee states, OCS did not fully comply with federal laws 

related to monitoring states and internal control standards and lacked a 

process to assess state CSBG management risks. OCS visited nine states in

fiscal years 2003 through 2005. However, as mentioned in our letter to the 

Assistant Secretary for Children and Families, OCS lacked the policies, 

procedures, and other internal controls to ensure effective monitoring 

efforts. As a result, states and Congress are not receiving required 

information on monitoring findings, and states may not have made 

improvements to how they administer CSBG funds. We recommended that

the OCS director establish formal written policies and procedures to 

improve OCS’s monitoring and related reporting, and OCS officials have 

made plans to address each of the recommendations included in the letter. 

We also found that OCS did not systematically use or collect available 

OCS Lacks Internal 

Controls and a Risk 

Management 

Framework Needed 

to Carry Out Effective 

Monitoring Efforts 

Page 10 GAO-06-627 Community Services Block Grant Program
information that would allow it to assess states’ CSBG management risks. 

Officials told us that they considered a variety of risk-related factors when 

selecting sites for monitoring visits, including reports from state and local 

officials about financial management problems and staff turnover, but they

did not have a systematic approach to assess risk or target monitoring 

toward states with the greatest needs. 

OCS Lacked Policies and 

Procedures to Help Ensure 

Effective Monitoring of 

States but Plans 

Improvements 

OCS lacked policies, procedures, and internal controls to help ensure 

effective on-site monitoring of state CSBG programs but has made plans to 

address these issues. OCS officials told us they visited nine states since 

2003: Delaware, Louisiana, Maryland, and North Carolina in 2003; Alabama 

and Montana in 2004; and Kentucky, New Jersey, and Washington in 2005.5

During these visits, OCS officials told us they used a monitoring tool to 

assess the administrative and financial operations of state programs. 

However, OCS sent monitoring teams that lacked required financial 

expertise to conduct evaluations of states and did not issue final reports to 

states as required by law. Consequently, the visited states may have been 

unaware of potential OCS findings and, therefore, may not have developed 

corrective action plans if needed. Furthermore, OCS officials also told us 

that they lost documentation for the state visits conducted in fiscal years 

2003 and 2004, leaving them unable to report to states they visited or 

perform appropriate follow-up procedures. OCS officials did not include 

information on their monitoring visits in their most recent CSBG report to 

Congress, released in December 2005, as statutorily required. In addition, 

OCS has not issued reports to Congress annually, as required by law. 

We reported on OCS’s monitoring challenges to the Assistant Secretary for 

Children and Families on February 7, 2006, and made recommendations 

for improving these conditions (for a copy of this letter, see app. II). 

Specifically, we recommended that the OCS director establish formal 

written policies and procedures to (1) ensure that teams conducting 

monitoring visits include staff with requisite skills, (2) ensure the timely 

completion of monitoring reports to states, (3) maintain and retain 

documentation of monitoring visits, and (4) ensure the timely issuance of 

annual reports to Congress. In response to this letter, OCS officials said 

that they plan to address each of our recommendations by hiring 

additional monitoring staff with expertise in financial oversight, training 

all staff on requirements that states must meet prior to visits, establishing

 5

 OCS also visited the Navajo Nation in 2003. 

Page 11 GAO-06-627 Community Services Block Grant Program
a triennial monitoring schedule for visiting states, developing new 

guidelines for reporting to states and maintaining monitoring documents, 

and issuing timely reports to Congress, among other efforts. See appendix 

III for more details on HHS’s response to our letter. 

OCS Did Not Use or

Collect Available 

Information Needed to 

Assess States’ Risk of 

Mismanaging Their CSBG 

Programs 

OCS did not systematically use or collect key information that would allow 

it to assess states’ CSBG management risks and target its limited 

monitoring resources toward states with the greatest risks. OCS officials 

told us that they used a risk-based approach to select states to visit, but we 

found the selection process to be ad hoc and often unexplained. OCS 

officials explained that they used information received from state and 

local officials on state CSBG management concerns to decide in which 

states to conduct compliance evaluation visits. For example, upon learning

that local agencies in Louisiana were concerned that they had not received 

all the funds allotted to them, OCS decided to conduct an evaluation of 

that state. OCS officials also mentioned that when selecting states to visit, 

they considered such risk factors as staff turnover and having limited 

information about the state in general. However, OCS officials could not 

provide an explanation for why they visited six of the nine states that had 

undergone evaluations since 2003 and had no formal, written criteria for 

determining which states to visit. 

Each state provides annual program performance information to OCS, but 

OCS does not systematically use this information to assess states’ risks of 

not meeting program objectives. Specifically, states annually provide OCS 

with information about the number of people receiving services and the 

types of services local agencies provided and categorize this information 

according to designated program goals, which can provide OCS with data 

on whether state and local agencies are performing as expected. OCS also 

did not systematically use information on the amount of CSBG funds 

states have expended. OCS officials said they reviewed state Single Audit 

reports when CSBG was included, but we found state CSBG programs 

generally fell below thresholds to receive an annual required audit. 

OCS does not systematically collect other key information that would 

allow federal officials to assess risk related to states’ oversight efforts and 

therefore cannot determine whether states are fulfilling their requirement 

to visit local agencies. For example, although OCS required states to 

certify that they will conduct statutorily required on-site visits of local 

agencies in their CSBG applications, it did not require states to submit 

documentation, such as reports on their monitoring findings, to verify that 

they had conducted these visits. OCS officials told us that they relied on 

Page 12 GAO-06-627 Community Services Block Grant Program
state Single Audit reports to learn which states did not comply with 

monitoring requirements. However, we found these audits rarely, if ever, 

review state CSBG programs. OCS officials told us that they were not 

aware of how rarely CSBG is reviewed through the Single Audit. 

OCS also does not systematically collect information on the local agencies 

that experience management problems or on the extent to which 

identified problems are being resolved. The federal CSBG director told us

that as a result, OCS may not be fully aware of the extent to which states 

had local agencies facing challenges with managing CSBG. OCS is aware 

of some local agencies with problems but has not established regular 

methods for collecting this information. OCS officials told us that it is the 

states’ responsibility to identify and address problems in local agencies. In 

our review of Single Audit data, we found that financial management 

problems were common, with about 30 percent of local agencies reporting 

findings in 2002 and 2003. However, less than 10 percent of all local 

agencies reported more severe findings that could result in undetected

financial reporting error and fraud, that are material weaknesses, in either

year (see app. IV for Single Audit data). 

All five states we visited conducted on-site monitoring of local agencies 

with varying frequency and performed additional oversight efforts, such as 

reviewing financial and programmatic reports from local agencies. The 

state programs that we visited had different views on what they must do to 

meet federal requirements to monitor local agencies at least once during 

each 3-year period, and OCS had not issued guidance clarifying the time 

frames states should use when conducting on-site visits. Specifically, 

officials in two states conducted the on-site visits at least once between 

2003 and 2005, but officials in the other three states visited their local 

agencies less frequently. While states varied in their frequency of 

monitoring visits, all five states offices visited local agencies with 

identified problems more often. Capacity to conduct on-site monitoring 

varied among the five state offices, particularly in the areas of 

administrative and financial monitoring resources. Officials in all five

states that we visited reviewed local agency reports as an additional 

oversight effort and provided required training and technical assistance to 

local agencies. In addition, some state offices coordinated with other 

federal programs that fund local activities to gain further insight into local 

agencies’ management practices. 

Frequency of State 

On-Site Monitoring 

Varied, but Selected 

States Performed 

Other Oversight 

Activities 

Page 13 GAO-06-627 Community Services Block Grant Program
The frequency of on-site visits to local agencies varied among the five

states we visited, ranging from 1 to 5 years between site visits. State CSBG

offices in Illinois and Texas conducted visits to each local agency between 

2003 and 2005. Specifically, officials in these two states visited at least half

of their agencies each year. In contrast, Pennsylvania, Missouri, and 

Washington officials monitored their local agencies less frequently, with 

Missouri allowing up to 5 years to pass between monitoring visits to some 

local agencies. Washington and Pennsylvania officials had visited nearly

all of their local agencies from 2003 through 2005, leaving less than 10 

percent unmonitored during this period. Conversely, the Missouri state 

CSBG office visited 4 of 19 local agencies from 2003 to 2005, leaving nearly 

80 percent of agencies unmonitored since 2001 or 2002. While states varied 

in their frequency of monitoring visits, officials in all five states told us 

they visited local agencies with identified problems more often. Illinois, 

Texas, and Washington assessed local agencies’ management risks to 

prioritize which local agencies they visited more frequently during a 

monitoring cycle. Table 1 below shows how many local agencies these 

states monitored with on-site CSBG reviews from 2003 through 2005. 

Frequency of On-site Visits 

Varied

Table 1: Local Agency Monitoring Visits Conducted by Select States, 2003-2005 

State 

Number of local 

agencies 

Total number of

agencies revieweda

Percentage of

agencies reviewed

Number of 

agencies 

reviewed, 2003

Number of 

agencies 

reviewed, 2004

Number of 

agencies 

reviewed, 2005

Illinois 36 36 100 36 36 29

Missouri 19 4 21 1 0 4

Pennsylvania 44 40 91 5 10 25

Texas 47 49b100b39 27 34

Washington 31 29 94 10 13 11

Source: GAO analysis of data provided by state CSBG programs. 

a

Number of agencies reviewed is not a sum total of reviews conducted in each year, since some 

agencies were reviewed in multiple years. 

b

The number and percentage of agencies reviewed in Texas between 2003 and 2005 exceeds its 

totals because two of the local agencies reviewed in 2003 subsequently closed. 

Although the CSBG Act states that local agencies should be visited at least 

once during each 3-year period, the state officials we visited have different

views on what is necessary to meet this requirement, and OCS has not 

issued guidance to states to clarify how the law should be interpreted. 

During the fiscal year 2004 Single Audit, Pennsylvania state auditors, using 

OMB guidance stating that reviews of local agencies must be conducted 

once every 3 years, found the state CSBG program to be out of compliance 

Page 14 GAO-06-627 Community Services Block Grant Program
with federal requirements. However, the Missouri CSBG program manager 

stated that even though 15 local agencies have not been visited between 

2003 and 2005, according to the state’s interpretation of the CSBG law, the 

CSBG office will meet monitoring requirements because all local agencies 

will be visited within the two 3-year periods of 2001 to 2003 and 2004 to 

2006. For example, the Missouri officials visited five agencies in 2001, 

during the first 3-year period, and plan to visit these agencies again in

2006, during the second 3-year period. 

States’ Capacity to 

Conduct On-site 

Monitoring Varied 

Administrative and financial monitoring resources varied in the five states 

we visited. Specifically, administrative funding ranged from less than 1 

percent ($135,380) of CSBG funds in Missouri to 4 percent ($1.2 million) in 

Texas. The Missouri program manager told us that the state CSBG office 

used less than 1 percent for administration because state hiring 

restrictions prevented the CSBG program from hiring full-time CSBG staff. 

In addition, state officials in Missouri, Pennsylvania, and Washington told 

us that staff shortages prevented them from visiting local agencies more 

frequently. The number of staff available, funding for administration, and 

other related information are shown in table 2. 

Table 2: Total CSBG Funds, Expenditures for Administration, and Numbers of CSBG Staff and Local Agencies, Fiscal Year 

2005 

State 

Number of 

 CSBG staffa

Total CSBG funds

Administrative 

expenditures

Percentage of total 

CSBG funds for

administration

Number of

 local agencies

Illinois 7 $29,934,237 $1,037,843 3.5 36

Missouri 5 $17,535,155 $135,380 0.8 19

Pennsylvania 7 $26,828,424 $722,311 2.7 44

Texas 15 $30,514,311 $1,226,817 4.0 47

Washington 4 $7,433,155 $214,790 2.9 31

Source: GAO analysis of data from states, NASCSP, and HHS. 

a

Includes part-time staff paid with CSBG funds. 

State programs generally developed and made use of written monitoring 

guides, but they varied in their ability to assess local agencies’ financial 

operations. The five state programs we visited all had written guides for 

monitoring visits that covered such areas as financial controls, 

governance, personnel, performance outcomes, and previous monitoring 

findings. However, state auditors in Washington told us that the CSBG 

office could not provide evidence that the guides were consistently used 

Page 15 GAO-06-627 Community Services Block Grant Program
during monitoring visits because available documentation showed that the 

guides were often incomplete after a visit. Illinois, Texas, and Washington 

offices regularly used accountants to support their reviews of local 

agencies’ financial operations as part of the on-site monitoring visits. 

Conversely, Missouri and Pennsylvania officials told us they did not 

regularly involve accountants in their monitoring efforts but had taken

steps to improve the guides they used to review local agencies’ finances. 

Specifically, the Missouri CSBG office, in consultation with MICA, made 

changes to its monitoring guide and provided financial training to its staff. 

The state CSBG office in Pennsylvania, with input from state budget staff, 

revised the financial aspects of its monitoring guide. 

States Made Efforts to 

Provide Additional 

Oversight of Local 

Agencies

The states that we visited provided oversight in addition to on-site 

monitoring through such activities as reviewing reports, coordinating with 

other federal and state programs, and providing formal training and 

technical assistance. All five state programs collected regular financial and 

performance reports and reviewed local expenditure reports. In addition,

officials in the five states told us that they reviewed reports of the annual

Single Audits for local agencies when they included findings related to the 

CSBG program. For example, a state audit manager in Washington 

reviewed the audits and regularly notified the CSBG program office when 

local agency findings were identified, and state CSBG program staff 

followed up with local agency officials and worked to ensure that the 

findings were addressed. States also required all local agencies to submit 

performance data. State officials told us that local agencies established 

their own performance goals, and the state offices reviewed these goals 

and sometimes modified them in consultation with local agencies. 

Additionally, all state CSBG offices reviewed local community action 

plans. 

Illinois, Texas, and Washington officials used information from these 

additional oversight activities to conduct risk assessments and select local 

agencies for more frequent on-site monitoring visits. In conducting these 

risk assessments, the state programs considered such factors as the 

amount of funds received from the state, the time since the last monitoring 

visit, and any identified concerns about an agency’s competency, integrity, 

or proficiency. State officials told us that they directed local agencies to 

use preventive training and technical assistance to address any issues 

raised by risk assessments. 

Three of the five state CSBG offices that we visited also coordinated 

oversight activities with other federal and state programs that fund local 

Page 16 GAO-06-627 Community Services Block Grant Program
agencies. For example, the Missouri, Texas, and Washington offices 

performed joint monitoring visits with state LIHEAP officials, and Missouri 

exchanged the results of local agency monitoring visits with the regional

Head Start office. Coordination with other federal and state programs that 

provide funds to local agencies, such as housing-related programs and 

Head Start, generally consisted of occasional meetings and the sharing of

some information. Also, OCS and the Head Start Bureau entered into a 

memorandum of understanding to foster collaboration and improve 

oversight of local agencies. While most regional and state officials told us

they were aware of the memorandum of understanding, some told us that 

its intent was unclear and that they needed additional guidance to 

implement it more usefully. 

State associations of community action agencies played an important role 

in providing formal training and technical assistance to local agencies. 

CSBG officials in Illinois, Missouri, Pennsylvania, and Texas relied on state 

community action associations to provide technical assistance. For 

example, the Illinois Community Action Association received state training 

and technical assistance funds to provide on-line resources, peer coaching, 

and routine conferences on a regular basis. Missouri’s state association for 

community action agencies, the Missouri Association for Community 

Action, also received CSBG training and technical assistance funds, which 

it used to help local agencies improve communications and management 

information systems and provide additional technical assistance as 

needed. In addition the Missouri association provides networking 

opportunities for local agencies and has a full-time training expert on staff, 

supported by the state CSBG contract, to provide one-on-one support to 

local agencies. In addition to training provided by the association, the 

Texas CSBG staff sponsored conferences and workshops that allowed the 

staff members to provide training directly to local agencies. In

Washington, the association and state staff sponsored discussion groups 

for the local agencies. Additionally, during on-site monitoring visits, state 

CSBG officials provided immediate informal technical assistance and 

follow-up with local agencies on monitoring findings when necessary. 

Page 17 GAO-06-627 Community Services Block Grant Program
While OCS targeted some training and technical assistance funds to local 

grantees with financial and programmatic management problems, the 

information on results of this assistance is limited. In fiscal years 2002

through 2005, OCS designated between $666,000 and $1 million of its 

annual $10 million training and technical assistance funds to local 

agencies with problems, but OCS did not have information to determine 

whether its training and technical assistance programs and their funding 

amounts were appropriate for addressing the areas of greatest needs. 

Specifically, the federal CSBG director explained that OCS currently 

allocates training and technical assistance funds based on input from some 

state and local agencies, but this process was not guided by a systematic 

assessment of state and local needs. Information on the results of OCS’s 

current grant programs that target local agencies with problems was 

limited. However, information provided by progress reports for these 

grants showed that some of the agencies assisted had improved. 

In fiscal years 2002 through 2005, OCS designated $1 million or less of its 

annual $10 million training and technical assistance funds to assist local 

agencies with problems, but it had no way to determine whether this 

money was allocated in a way that addressed the greatest needs of state 

and local agencies. OCS divided its annual $10 million training and 

technical assistance funds among program support, contracts, and grants. 

The Deputy Director of OCS told us that program support funds paid 

salaries and expenses for OCS officials that manage CSBG grants, and 

contract funds paid for costs associated with logistics such as outreach 

and meeting with grantees, costs related to a management information 

system, and costs related to grant competitions. Training and technical 

assistance grants may be used for a variety of purposes, and OCS allocated 

these funds to support different types of activities each year. For example, 

OCS frequently funded activities such as supporting the implementation of 

ROMA, encouraging agencies to share innovative ideas, and providing 

program and management training opportunities for community action

professionals. OCS designated between $666,000 and $1 million of annual

training and technical assistance grants to assist local agencies with 

problems through two grant programs: Special State Technical Assistance 

Grants and the Peer-to-Peer Technical Assistance and Crisis Aversion 

Intervention Grants. These grants were commonly used to address to 

management, financial, and board governance problems at local agencies. 

Table 3 shows the allocation of CSBG funding for grants, contracts, and 

program support. 

OCS Targeted Some 

Training and 

Technical Assistance 

Funds to Grantees 

with Problems, but 

Information on 

Results Is Limited 

OCS Designated $1 Million 

or Less of Its Annual 

Training and Technical 

Assistance Funding to 

Assist Local Agencies with 

Problems but Does Not 

Know if These Funds 

Addressed the Greatest 

Needs 

Page 18 GAO-06-627 Community Services Block Grant Program
Table 3: Office of Community Services CSBG Training and Technical Assistance Funding, Fiscal Years 2002 to 2005 

Thousands of dollars 

Allocation type 2002 2003 2004 2005

Grants to assist local agencies with problems $666 $845 $1,000 $900

Special State Technical Assistance 366 545 500 400

Peer-to-Peer 300 300 500 500

Other grants 6,158 5,303 6,215 6,571

Contracts 1,483 2,436 1,432 1,039

Program support 1,871 1,540 1,469 1,557

Totalsa$10,218 $10,125 $10,117 $10,066

Source: HHS Office of Community Services and GAO analysis 

a

Column totals may not add up because of rounding. 

Despite a congressional recommendation, OCS officials told us there is no 

process in place to strategically allocate its approximately $10 million in 

training and technical assistance funds among program areas. OCS drafted 

a strategic plan for allocating its training and technical assistance funds—

an action directed by congressional conferees in the fiscal year 2005 

Consolidated Appropriations Act conference report—but did not 

implement the plan. The federal CSBG director told us that OCS did not 

implement the strategic plan because the President’s recent budget 

proposals did not include funding for CSBG, although Congress has 

continued to provide funding for the program. The federal CSBG director 

also told us that the draft plan focused resources on such areas as 

financial integrity and management, leadership enhancement, and data

collection. 

The federal CSBG director also told us that OCS currently allocates 

training and technical assistance funds based on input from some state 

and local agencies, but this process was not guided by a systematic 

assessment of state and local needs and did not involve guidance or 

specifications on the actual amounts that should be awarded for activities. 

Specifically, OCS sought input each year from the Monitoring and 

Assessment Taskforce—a group made up of some state and local CSBG 

officials and national CSBG associations such as the National Association 

of State Community Service Programs (NASCSP)—to generate a list of 

priority activities. OCS then presented this list at national community 

action conferences, such as those sponsored by NASCSP or the 

Community Action Partnership, for additional comments. However, OCS 

does not track which local agencies experienced problems and what those 

Page 19 GAO-06-627 Community Services Block Grant Program
problems were. As a result, OCS could not provide us with information on 

the extent to which these current efforts are addressing those needs. 

Limited Data on the 

Results of the Assistance 

Showed That Some Local 

Agencies Had Improved 

Information on the results of OCS grant programs that targeted local 

agencies with problems was limited. However, the available information 

showed that some local agencies have improved financial and 

programmatic management as a result of the assistance they received. Our 

review of all available grant applications and subsequent progress reports 

for SSTA and Peer-to-Peer grants identified 68 local agencies that these 

grants targeted for assistance between 2002 and 2005. Of these 68 

agencies, 22 had no results available because the assistance was ongoing 

and therefore final progress reports were not yet due. We identified 

outcomes for 25 of the remaining 46 agencies, as shown in figure 2. Of 

these 25 agencies, 18 reported improvement, and the remaining 7 agencies

had unresolved issues, had closed, or had undeterminable results. Results 

were unknown for the other 21 agencies because their grant progress 

reports did not include information on outcomes. 

Figure 2: Results of Assistance to 46 Local Agencies from Special State Technical 

Assistance and Peer-to-Peer Grants as Reported by Grantees, Fiscal Years 2002

through 2005 

Results

Number of local agencies targeted for assistance

Source: GAO analysis of grantee progress reports.

0 5 10 15 20 25

Results unclear

Agency problems not resolved

Agency closed

Agency showed improvement

Results unknown 21

18

3

2

2

Notes: This figure does not include does not include the 22 of the 68 agencies identified as being 

targeted for assistance and for which data on results are not available because final progress reports 

on the grants awarded to assist these agencies are not yet due. 

Among the 18 agencies that showed improvement, 5 agencies still had remaining challenges to 

address. 

Page 20 GAO-06-627 Community Services Block Grant Program
OCS officials told us that they hold grantees accountable for conducting 

activities under the proposed scope of training and technical assistance 

grants, not whether these activities result in successful outcomes for the 

local agencies they assist. OCS’s guidance to training and technical 

assistance grantees recommends that the grantees report whether 

activities are completed but does not include a requirement to report on 

outcomes. Further, HHS’s guidance on discretionary grant reporting, 

which covers CSBG training and technical assistance grants, does not 

specify what information program offices should collect on performance 

and outcomes. We also spoke with officials in HHS’s Office of Inspector 

General who mentioned that on the basis of prior reviews the office had 

some concerns about the administration of CSBG discretionary grants. 

Specifically, these officials had concerns about the completeness and 

accuracy of progress reports and whether grantees were meeting their 

goals. 

Officials involved in efforts to use grants to assist agencies gave mixed 

reviews on the effectiveness of activities funded by these grants. State and 

local officials in Texas and Missouri spoke highly of their interaction with 

MICA to assist agencies with problems. State officials in Texas said they 

had used an SSTA grant to assist two local agencies and had hired MICA 

as the contractor to provide the assistance. Texas officials were pleased 

with the assistance that MICA provided and said that the state did not have 

the resources to provide the kind of long-term, on-site assistance that 

MICA offered. Missouri officials told us that all five local agencies that the 

state had contracted with MICA to work with had benefited from MICA’s 

expertise, particularly with regard to financial matters. Like Texas, the 

Missouri office also used SSTA grants to provide assistance to four of 

these agencies. In contrast, we also spoke to national, regional, and state 

community action association officials who said they had worked with 

local agencies that received assistance from MICA and had concerns about 

MICA’s work. Specifically, they told us that MICA was not always effective 

in resolving local agencies’ problems, did not use money efficiently, and 

had an apparent conflict of interest stemming from its practice of 

conducting agency assessments and offering services to correct problems 

those assessments identify. For example, an Ohio official who managed a 

local agency’s contract told us that even with 6 months of paid assistance

from MICA, the local agency had closed. In response to these criticisms, a 

MICA official said that some problems at local agencies were too severe 

for them to address and that MICA tries to be transparent about its costs 

by issuing a detailed proposal before starting work with an agency. 

Additionally, the MICA official said that MICA and OCS officials had 

Page 21 GAO-06-627 Community Services Block Grant Program
discussed the conflict of interest issue, and OCS had encouraged MICA to 

continue efforts to assess agencies and address their problems. 

Under the CSBG program, federal, state, and local agencies work together 

to help low-income people achieve self-sufficiency. The federal 

government’s role is to oversee states’ efforts to ensure that local agencies

properly and effectively use CSBG funds. OCS currently lacks the 

procedures, information, and guidance to grantees that it needs to 

effectively carry out its role. Specifically, OCS does not fully use the data it 

collects and does not collect other key information on state oversight 

efforts and the outcomes of training and technical assistance grants that 

could enhance its oversight capabilities. Additionally, OCS has not issued 

guidance for how often states should visit local agencies. Thus, OCS 

cannot determine where program risks exist or effectively target its 

limited resources to where they would be most useful. Consequently, OCS 

may have missed opportunities to monitor states facing the greatest 

oversight challenges and to identify common problem areas where it could 

target training and technical assistance. 

In order to provide better oversight of state agencies, we recommend that 

the Assistant Secretary for Children and Families direct OCS to take the 

following actions: 

Conclusions 

Recommendations for 

Executive Action 

• Conduct a risk-based assessment of state CSBG programs by 

systematically collecting and using information. This information may 

include programmatic and performance data, state and local Single 

Audit findings, information on state monitoring efforts and local 

agencies with problems, and monitoring results from other related 

federal programs that may be obtained by effectively using the 

memorandum of understanding with the Head Start program and other 

collaborative efforts. 

• Establish policies and procedures to help ensure that its on-site 

monitoring is focused on states with highest risk. 

• Issue guidance on state responsibilities with regard to complying with 

the requirement to monitor local agencies at least once during each 3-

year time period. 

• Establish reporting guidance for training and technical grants that 

would allow OCS to obtain information on the outcomes of grantfunded activities for local agencies. 

• Implement a strategic plan that will focus its training and technical 

assistance efforts on the areas in which states face the greatest needs. 

Page 22 GAO-06-627 Community Services Block Grant Program
OCS should make use of risk assessments and its reviews of past 

training and technical assistance efforts to inform the strategic plan. 

We provided a draft of this report to the Department of Health and Human 

Services and received written comments from the agency. In its 

comments, HHS officials agreed with our recommendations and, in 

response, have planned several changes to improve CSBG oversight. 

Specifically, HHS officials stated that OCS is finalizing a risk-based 

strategy to identify state and local agencies most in need of oversight and

technical assistance based on characteristics identified in state plans, 

audit reports, previous monitoring and performance reports, and reports 

from other programs administered by local agencies that receive CSBG 

funds. HHS officials said that this strategy will result in OCS implementing 

a triennial monitoring schedule they plan to have fully operational by fiscal 

year 2008. HHS officials also said that by October 1, 2006, OCS will issue 

guidance to state CSBG lead agencies to clarify the states’ statutory 

obligation to monitor all local entities receiving CSBG funding within a 3-

year period, as well as requirements for states to execute their monitoring

programs. Additionally, HHS officials said that OCS has worked with a 

group of local and state CSBG officials and national CSBG associations to 

develop a comprehensive training and technical assistance strategic plan 

focused on issues such as leadership, administration, fiscal controls, and 

data collection and reporting. See appendix V for HHS’s comments. 

As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days after its 

issue date. At that time, we will send copies of this report to the Assistant 

Secretary for Children and Families, relevant congressional committees, 

and other interested parties. We will also make copies available to others

upon request. In addition, the report will be available at no charge on 

GAO’s Web site at http://www.gao.gov. 

Comments from the 

Department of Health 

and Human Services 

on Our Evaluation 

Please contact me at (202) 512-7215 if you or your staff have any questions 

about this report. Other major contributors to this report are listed in 

appendix VI.

Marnie S. Shaul 

Director, Education, Workforce, and Income Security Issues 

Page 23 GAO-06-627 Community Services Block Grant Program
Appendix I: Objectives, Scope, and Appendix I: Objectives, Scope, and Methodology 

Methodology 

To gain a better understanding of oversight efforts undertaken by state 

and federal program offices to monitor the Community Services Block 

Grant (CSBG) program and ensure the accountability of funds, we 

examined (1) the extent to which the Department of Health and Human 

(HHS) oversight of states efforts to monitor local agencies complied with 

federal laws and standards, (2) the efforts selected states have made to 

monitor local agencies’ compliance with fiscal requirements and 

performance standards, and (3) the extent to which HHS targeted federal 

CSBG training and technical assistance funds to efforts to assist local 

agencies with financial or management problems and what is known about 

the results of the assistance. 

To address the first objective, we reviewed federal laws and standards to 

obtain information on the Office of Community Services’s (OCS) 

requirements and responsibilities for the oversight of states and 

interviewed federal officials about their oversight efforts. In addition, we 

obtained and reviewed available information on OCS monitoring policies

and procedures; documentation of federal monitoring visits of states 

conducted during fiscal years 2003 through 2005; other information OCS 

collects from states, including state applications and performance data;

and guidance issued by OCS to communicate program-related information, 

concerns, and priorities to grantees to assess OCS’s compliance with laws 

and standards. We also reviewed available Single Audit data for local 

agencies and grouped them by state to assess the percentage of local 

agencies with Single Audit findings at both the national and state levels 

reported in fiscal years 2002 and 2003, the most recent years for which 

information was available. The scope of this review included the District 

of Columbia and Puerto Rico as well as the 50 states. We assessed the 

reliability of Single Audit data by performing electronic and manual data

testing to assess whether the data were complete and accurate. We also 

assessed the reliability of CSBG statistical data by interviewing officials 

knowledgeable about data collection and maintenance. We determined 

that the data were sufficiently reliable for the purposes of this report. In 

addition, we interviewed federal officials with Head Start, the Low-Income 

Home Energy Assistance Program, and the Community Development 

Block Grant program, which also distribute funds to local agencies, to 

learn whether officials from these programs shared information with 

CSBG officials to support oversight efforts. 

To address the second objective, we reviewed federal laws and standards 

to obtain information on states’ CSBG oversight responsibilities and 

conducted site visits. 

Page 24 GAO-06-627 Community Services Block Grant Program
Appendix I: Objectives, Scope, and 

Methodology 

We visited five states, Illinois, Missouri, Pennsylvania, Texas, and 

Washington, that were selected using several criteria including grant 

amounts, number of local agencies, state administrative structure, and 

analysis of Single Audit results among local agencies. CSBG association 

officials recommended some of these states based on promising efforts to 

monitor local agencies. Table 4 provides characteristics we considered for 

each state.

Table 4: States Visited in Our Study

Criteria Illinois Missouri Pennsylvania Texas Washington

Recommendations from CSBG associations √ √ √ √

Size of grant (range $2.5 million - 56.5 million) $29,934,237 $17,535,155 $26,828,424 $30,514,311 $7,433,155

Number of local agencies (Range 1-63) 36 19 44 47 31

State administrative structure 

(few: fewer than five programs providing funds to 

CAAs are in the same state agency; many: five 

or more) 

Few Few Many Few Many

Occurrences of financial findings (above or below 

average national percentage of subgrantees

reporting 2003 Single Audit data) 

Below Above Above Above Below

Recently monitored by HHS Yes

(FY 2005)

Percentage of people in poverty (National 

Average = 12.1%) 

11.8 10.1 9.9 15.8 11.4

Census region Midwest Midwest Northeast South West

Source: GAO analysis of data from the U.S. Census Bureau, Federal Audit Clearinghouse, NASCSP, and the Community Action

Partnership. 

During our state site visits, we interviewed and collected information from 

state and local officials in Illinois, Missouri, Pennsylvania, Texas, and 

Washington about state oversight efforts from fiscal year 2003 through 

fiscal year 2005. Specifically, we interviewed state program officials and 

reviewed related documentation including state guidance and directives to

local agencies, application instructions, state on-site monitoring 

schedules, on-site monitoring guides, sample contracts, and reporting 

forms for local agencies. We also visited three local agencies in each state 

and interviewed staff to learn more about state oversight and monitoring 

efforts, including application processes, fiscal and performance reporting,

on-site monitoring, and training and technical assistance. In each state we 

visited, we reviewed program files for six local agencies, including files for

the three we visited and three others, that included community action 

plans and applications, financial and performance reports, and state 

Page 25 GAO-06-627 Community Services Block Grant Program
Appendix I: Objectives, Scope, and 

Methodology 

monitoring reports and follow-up correspondence. In addition, we 

obtained information on state audit findings related to CSBG and met with 

state auditors during site visits to learn more about additional state 

oversight of CSBG and related programs and local agencies. We also 

interviewed state officials in the Low-Income Home Energy Assistance 

Program and the Community Development Block Grant programs, as well 

as regional HHS officials, to learn whether any coordination occurred 

between the programs to support state oversight efforts. Our results on the 

five states that we visited are not generalizable to all state CSBG 

programs. 

To address the third objective, we interviewed federal officials and 

contractors that provide training and technical assistance to obtain 

information on the extent to which OCS grants were targeted to assist 

agencies with problems and how they determined whether these efforts 

were effective. We obtained and reviewed training and technical 

assistance grant applications and progress reports for Special State 

Technical Assistance (SSTA) Grants and Peer-to-Peer Technical 

Assistance and Crisis Intervention (Peer-to-Peer) Grants for fiscal year 

2002 through fiscal year 2005 to assess efforts to assist local agencies with

problems and the results of these efforts. This review included 

applications for all 39 SSTA Grants awarded during this period, progress 

reports issued in 6-month intervals for the Peer-to-Peer Grant, and 

available final progress reports for the SSTA Grants. We were not able to 

obtain some SSTA Grant progress reports because the assistance was still 

ongoing, particularly for grants issued recently. We also interviewed a 

national association representative and state and local officials to learn 

about the results of training and technical assistance efforts. 

We conducted our work from July 2005 through May 2006 in accordance 

with generally accepted government auditing standards. 

Page 26 GAO-06-627 Community Services Block Grant Program
Appendix II: Community Services Block Grant 

Program: HHS Needs to Improve Monitoring Appendix II: Community Services Block of State Grantees, HGAO-06-373RH 

Grant Program: HHS Needs to Improve 

Monitoring of State Grantees, GAO-06-373R

Page 27 GAO-06-627 Community Services Block Grant Program
Appendix II: Community Services Block Grant 

Program: HHS Needs to Improve Monitoring

of State Grantees, GAO-06-373R

Page 28 GAO-06-627 Community Services Block Grant Program
Appendix II: Community Services Block Grant 

Program: HHS Needs to Improve Monitoring

of State Grantees, GAO-06-373R 

Page 29 GAO-06-627 Community Services Block Grant Program
Appendix III: The Department of Health and

Human Services’s Response to HGAO-06- Appendix III: The Department of Health and 373RH 

Human Services’s Response to GAO-06-373R

Page 30 GAO-06-627 Community Services Block Grant Program
Appendix III: The Department of Health and

Human Services’s Response to GAO-06-373R

Page 31 GAO-06-627 Community Services Block Grant Program
Appendix III: The Department of Health and

Human Services’s Response to GAO-06-373R

Page 32 GAO-06-627 Community Services Block Grant Program
Appendix IV: Ranking of States Based on 

Percentage of Local CSBG Subgrantees with Appendix IV Single Audit Findings : Ranking of States Based on 

Percentage of Local CSBG Subgrantees with 

Single Audit Findings 

Tables 5 and 6 present Single Audit data by state for local CSBG agencies 

(i.e., community action agencies) for 2002 and 2003, respectively. For each

state, we report (1) the number of local agencies for which Single Audit 

data were available, (2) the percentage of local agencies in the state that 

had any type of Single Audit finding, (3) the percentage of local agencies 

that had material weakness findings,1

 and (4) the percentage of local 

agencies that had material noncompliance findings.2

 States are ranked in

decreasing order by the percentage of local agencies in the state that had 

any type of Single Audit finding. 

 1

 The American Institute of Certified Public Accountants (AICPA) standards define 

“material weakness” as a reportable condition in which the design or operation of one or 

more of the internal control components does not reduce to a relatively low level the risk 

that misstatements caused by error or fraud in amounts that would be material in relation

to the financial statements being audited may occur and not be detected within a timely 

period by employees in the normal course of performing their assigned functions. 

2

 The Financial Audit Manual published by GAO and the President’s Council on Integrity 

and Efficiency (GAO-01-765G) defines “material noncompliance” as reportable 

noncompliance in which a failure to comply with laws or regulations results in 

misstatements that are material to the financial statements. 

Page 33 GAO-06-627 Community Services Block Grant Program
Appendix IV: Ranking of States Based on 

Percentage of Local CSBG Subgrantees with

Single Audit Findings 

Table 5: Single Audit Data for States Related to Findings among Local CSBG Subgrantees Ranked by the Percentage of 

Agencies with Findings, 2002 

Rank State

Number of local 

agencies 

reporting Single

Audits

Percentage of local 

agencies with Single 

Audit findings

Percentage of local 

agencies with

material weakness 

findings

Percentage of local agencies 

with material noncompliance

findings

1 Puerto Rico 3 100 33 33

2 New Mexico 8 75 0 0

3 West Virginia 14 64 36 14

4 Missouri 19 58 5 0

5 Wyoming 9 56 44 0

6 Maryland 17 53 6 0

7 Connecticut 12 50 0 25

7 South Dakota 4 50 0 0

9 Louisiana 36 47 14 14

10 Arizona 11 45 9 0

10 Maine 11 45 9 0

12 New Jersey 20 45 5 5

13 Pennsylvania 43 44 9 7

14 Minnesota 36 42 6 6

15 Indiana 22 41 14 14

16 South Carolina 16 38 19 6

17 Texas 43 37 12 5

18 Alabama 19 37 26 0

18 Oklahoma 19 37 0 5

20 Nevada 11 36 0 0

21 Ohio 50 36 10 4

22 Arkansas 14 36 0 0

22 Florida 28 36 7 7

24 Georgia 24 33 4 4

24 Iowa 18 33 22 0

24 New Hampshire 6 33 17 0

24 North Dakota 6 33 0 0

28 California 56 32 2 4

29 Virginia 26 31 4 0

30 Michigan 27 30 4 4

31 Wisconsin 17 29 6 6

32 Tennessee 18 28 6 6

Page 34 GAO-06-627 Community Services Block Grant Program
Appendix IV: Ranking of States Based on 

Percentage of Local CSBG Subgrantees with

Single Audit Findings 

Rank State

Number of local 

agencies 

reporting Single

Audits

Percentage of local 

agencies with Single 

Audit findings

Percentage of local 

agencies with

material weakness 

findings

Percentage of local agencies 

with material noncompliance

findings

33 Illinois 33 27 3 3

34 Colorado 35 26 6 0

35 New York 47 26 4 0

36 North Carolina 29 24 14 7

37 Washington 25 24 4 4

38 Mississippi 17 24 0 0

38 Oregon 17 24 0 6

40 Nebraska 9 22 0 0

41 Montana 10 20 0 0

42 Massachusetts 23 17 4 0

43 Kentucky 21 14 0 0

43 Utah 7 14 0 0

45 Kansas 8 13 13 13

46 Alaska 1 0 0 0

46 Delaware 1 0 0 0

46 Hawaii 4 0 0 0

46 Idaho 8 0 0 0

46 Rhode Island 7 0 0 0

46 Vermont 4 0 0 0

N/A District of Columbiaa0 N/A N/A N/A

National totals 969 34 7 4

Source: GAO analysis of data from the Federal Audit Clearinghouse. 

Note: Ties are noted with some states sharing ranks. Ranking was based on percentages rounded to

1/100th, therefore the table may show other apparent but not actual ties. 

a

Single Audit data for the local agency in the District of Columbia were not available for fiscal year

2002. 

Page 35 GAO-06-627 Community Services Block Grant Program
Appendix IV: Ranking of States Based on 

Percentage of Local CSBG Subgrantees with

Single Audit Findings 

Table 6: Single Audit Data for States Related to Findings among Local CSBG Subgrantees Ranked by the Percentage of 

Agencies with Findings, 2003

Rank State

Number of local 

agencies reporting

 Single Audits

Percentage of local 

agencies with Single 

Audit findings

Percentage

 of local agencies 

 with material

 weakness findings

Percentage of local

 agencies with material

 noncompliance findings

1 Delaware 1 100 0 0

1 District of Columbia 1 100 100 100

3 Puerto Rico 4 75 25 25

4 Wyoming 9 67 44 22

5 West Virginia 13 54 31 8

6 Maryland 15 53 13 0

7 New Hampshire 6 50 17 0

7 South Dakota 4 50 0 0

9 Texas 42 48 17 2

10 Mississippi 13 46 8 15

11 Nevada 11 45 9 18

12 Louisiana 36 44 17 14

12 Missouri 18 44 6 0

14 New Jersey 17 41 6 6

15 Pennsylvania 42 38 10 5

16 Virginia 27 37 7 4

17 Oklahoma 19 37 5 5

18 South Carolina 14 36 14 0

19 Alabama 18 33 11 0

19 Arkansas 15 33 7 0

19 New Mexico 6 33 0 0

19 North Dakota 6 33 0 0

23 Florida 28 32 11 4

24 Indiana 22 32 14 14

25 Minnesota 35 31 6 3

26 Ohio 48 31 10 4

27 Colorado 37 30 8 0

28 Iowa 17 29 18 6

29 Georgia 22 27 5 0

29 Maine 11 27 9 0

31 New York 50 26 4 2

32 Washington 27 26 4 0

Page 36 GAO-06-627 Community Services Block Grant Program
Appendix IV: Ranking of States Based on 

Percentage of Local CSBG Subgrantees with

Single Audit Findings 

Rank State

Number of local 

agencies reporting

 Single Audits

Percentage of local 

agencies with Single 

Audit findings

Percentage

 of local agencies 

 with material

 weakness findings

Percentage of local

 agencies with material

 noncompliance findings

33 California 58 26 2 0

34 Illinois 31 26 3 0

35 Arizona 8 25 0 0

35 Connecticut 12 25 8 8

35 Hawaii 4 25 25 25

35 Michigan 28 25 4 4

35 North Carolina 28 25 11 11

40 Nebraska 9 22 0 0

41 Montana 10 20 0 0

42 Kentucky 21 19 10 5

43 Wisconsin 17 18 6 0

44 Massachusetts 23 13 0 0

45 Kansas 8 13 0 0

45 Tennessee 16 13 0 0

47 Oregon 18 11 0 0

48 Alaska 1 0 0 0

48 Idaho 8 0 0 0

48 Rhode Island 8 0 0 0

48 Utah 8 0 0 0

48 Vermont 4 0 0 0

National totals 954 31 8 4

Source: GAO analysis of data from the Federal Audit Clearinghouse. 

Note: Ties are noted with some states sharing ranks. Ranking was based on percentages rounded to

1/100th, therefore the table may show other apparent but not actual ties. 

Page 37 GAO-06-627 Community Services Block Grant Program
Appendix V: Comments from the Department of Health & Appendix VHuman Services : Comments from the Department 

of Health & Human Services 

Page 38 GAO-06-627 Community Services Block Grant Program
Appendix V: Comments from the Department of Health & 

Human Services

Page 39 GAO-06-627 Community Services Block Grant Program
Appendix V: Comments from the Department of Health & 

Human Services

Page 40 GAO-06-627 Community Services Block Grant Program
Appendix V: Comments from the Department of Health & 

Human Services

Page 41 GAO-06-627 Community Services Block Grant Program
Appendix VI: 

A

GAO Contact and Staff 

cknowledgments 

Page 42 GAO-06-627

Appendix VI: GAO Contact and Staff 

Acknowledgments 

Marnie S. Shaul, (202) 512-7215, shaulm@gao.gov

In addition to the contact named above, Bryon Gordon (Assistant 

Director), Danielle Giese (Analyst-in-Charge), Janice Ceperich, Tim Hall, 

and Andrew Huddleston made significant contributions to this report. 

Curtis Groves, Matt Michaels, and Luann Moy provided assistance with 

research methodology and data analysis. Jim Rebbe provided legal 

counsel, and Jonathan McMurray and Lise Levie assisted with report 

development. 

GAO Contact 

Staff 

Acknowledgments 

Community Services Block Grant Program
Related GAO Products Related GAO Products 

Community Services Block Grant Program: HHS Needs to Improve 

Monitoring of State Grantees. GAO-06-373R. Washington, D.C.: 

February 7, 2006. 

Head Start: Comprehensive Approach to Identifying and Addressing 

Risks Could Help Prevent Grantee Financial Management Weaknesses. 

GAO-05-465T. Washington, D.C.: April 5, 2005. 

Head Start: Comprehensive Approach to Identifying and Addressing 

Risks Could Help Prevent Grantee Financial Management Weaknesses. 

GAO-05-176. Washington, D.C: February 28, 2005.

Internal Control Management and Evaluation Tool. GAO-01-1008G. 

Washington, D.C.: August 2001. 

Standards for Internal Control in the Federal Government. 

GAO/AIMD-00-21.3.1. Washington: D.C.: November 1999. 

Grant Programs: Design Features Shape Flexibility, Accountability, and 

Performance Information. GAO/GGD-98-137. Washington, D.C.: June 22,

1998. 

(130512) Page 43 GAO-06-627 Community Services Block Grant Program
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