United States Government Accountability Office

GAO Report to Congressional Requesters

FAITH-BASED AND 

COMMUNITY 

INITIATIVE 

Improvements in 

Monitoring Grantees 

and Measuring 

Performance Could 

Enhance 

Accountability 

June 2006 

 

GAO-06-616 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

June 2006

FAITH-BASED AND COMMUNITY 

INITIATIVE 

Improvements in Monitoring Grantees 

and Measuring Performance Could 

Enhance Accountability 

Highlights of GAO-06-616 a report to 

congressional requesters 

The Administration’s efforts to 

improve the federal government’s 

provision of social services through 

its Faith-Based and Community 

Initiative have sparked 

considerable interest. GAO was 

asked to examine (1) the activities 

of the initiative-related centers in

five federal agencies; (2) the grant 

award procedures for selected

grants; (3) the extent to which 

selected federal and state agencies 

are providing information on and 

ensuring compliance with

safeguards designed to protect 

faith-based organizations (FBO),

beneficiaries, and the government;

and (4) how the progress of the 

initiative is being measured. We

interviewed government officials 

administering 10 grant programs 

and officials from 26 FBOs. 

What GAO Recommends

We recommend that the Director of

the Office of Management and

Budget (OMB) ensure that all

agencies with initiative-related

centers include information on the 

safeguards in grant documents and 

in monitoring guidelines, improve 

data on grants awarded to FBOs, 

and develop a plan for reporting on

progress toward the initiative’s 

long-term goals. OMB generally

agreed but expressed some

concerns about the practicality of 

implementing a few of the 

recommendations. We also 

recommend that the Department of 

Justice clarify its regulations on 

allowed activities and clarify 

relevant language in its contracts, 

and Justice generally agreed. 

In 2001 the Administration introduced the Faith-Based and Community 

Initiative and established initiative-related centers in five federal agencies. 

The centers employ a range of activities and resources to implement the 

initiative. Since fiscal year 2002, these centers have cumulatively spent more 

than $24 million on administrative activities. 

In reviewing grant applications and awarding grants, federal and state 

agencies reported using the same process for FBOs as they do for other 

organizations in the 10 grant programs we reviewed. Since 2001, federal 

agencies have awarded over $500 million through new grant programs to 

provide training and technical assistance to faith-based and community 

organizations and to increase the participation of these organizations in 

providing federally funded social services. 

The government agencies administering the programs that we reviewed 

provided grantees with some information on the safeguards designed to 

protect the interests of FBOs, beneficiaries, and the government. Most of the 

agencies provided grantees with an explicit statement on the safeguard 

prohibiting the use of direct federal funds for inherently religious activities. 

If these activities are offered, they must be offered separately in time or 

location from services provided with direct federal funds and must be 

voluntary for the beneficiary. However, we found that Justice’s regulation 

and guidance related to these activities is unclear for its correctional 

programs. We also found that only four programs provided a statement on 

the rights of program beneficiaries and only three provided information on 

permissible hiring by FBOs. While officials in all 26 FBOs that we visited said 

that they understood that federal funds cannot be used for inherently 

religious activities, a few FBOs described activities that appeared to violate

this safeguard. Four of the 13 FBOs that provided voluntary religious 

activities did not separate in time or location some religious activities from 

federally funded program services. Government agencies are not required to 

monitor FBO grantees differently than secular organizations. Few of the 

federal and state agencies administering these programs included references

in their monitoring guidelines on grantee compliance with the safeguards. 

OMB and the White House Office of Faith-Based and Community Initiatives 

assess agencies’ progress in implementing the short-term goals of the 

initiative and highlight this progress through a number of published vehicles. 

However, it is unclear whether the data reported on grants awarded to FBOs 

provide policymakers with a sound basis to assess the progress of agencies 

in meeting the initiative’s long-term goal of greater participation of faithbased and community organizations. Moreover, little information is available 

to assess progress toward another long-term goal of improving participant 

outcomes because outcome-based evaluations for many pilot programs have 

not begun. Also, OMB faces other challenges in measuring and reporting on 

agencies’ progress in meeting the long-term goals of the initiative.

www.gao.gov/cgi-bin/getrpt?GAO-06-616.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Andrew Sherrill 

at (202) 512-7252 or ASherrill@gao.gov. 
Contents 

Letter 1

Results in Brief 5

Background 10

Centers Employ Different Activities and Resources to Implement 

the Initiative 16 

Agencies Use Same Grant Award Procedures for Faith-Based as 

Other Organizations, and Some New Grant Programs 

Established to Encourage More Faith-Based and Community 

Organization Participation 22 

Government Agencies Generally Provide Grantees with 

Information on Safeguards, but Most Do Not Have Procedures in 

Their Monitoring Guidelines for Assessing Compliance 29 

OMB and WHOFBCI Assess Agencies’ Progress in Implementing 

Initiative, but Data Limitations and a Lack of Information May 

Hinder Ability to Measure Progress toward Achieving Initiative’s 

Long-Term Goals 40 

Conclusions 51

Recommendations for Executive Action 53 

Agency Comments 54 

Appendix I Centers’ Estimated Expenditures by Category, 

Fiscal Year 2005 61 

Appendix II Selected Characteristics of Faith-Based Organizations 

GAO Visited 62 

Appendix III Best Practices for the Initiative’s Standards for 

Success 65

Best Practices for Outreach and Technical Assistance 65 

Best Practices for Implementation of Equal Treatment Regulations 66 

Appendix IV Comments from the Department of Justice 68 

GAO Comments 72 

Appendix V Comments from the Department of Education 75 

Page i GAO-06-616 Faith-Based and Community Initiative
Appendix VI Comments from the Department of Health and 

Human Services 77 

Appendix VII Comments from the Department of Housing and 

Urban Development 79 

Appendix VIII Comments from the Department of Labor 81 

Appendix IX GAO Contacts and Staff Acknowledgments 83 

Tables 

Table 1: Executive Orders Related to the Faith-Based and 

Community Initiative 11 

Table 2: Equal Treatment Safeguards and the Key Parties They Are 

Designed to Protect 13 

Table 3: Selected Federal Programs Providing Funding to Various 

Organizations, Including Faith-Based Organizations 24 

Table 4: New Grant Programs Intended to Encourage Faith-Based 

and Community Organization Participation in Federally 

Funded Social Efforts 26 

Table 5: Extent to Which Safeguards Are Included in Program 

Grant Documents 31 

Table 6: OMB’s Green and Yellow Standards for Success for 

Executive Agencies with Centers for the Faith-Based and 

Community Initiative 41 

Table 7: Most Required Outcome Evaluations Not Completed, and 

Some Design Plans May Not Support an Evaluation of 

Program Outcomes 48 

Figure 

Figure 1: Estimated Expenditures of Centers for Faith-Based and 

Community Initiatives, Fiscal Years 2002 through 2005 20 

Page ii GAO-06-616 Faith-Based and Community Initiative
Abbreviations 

FBCI Faith-Based and Community Initiatives 

FBO faith-based organization

HHS Department of Health and Human Services 

HUD Department of Housing and Urban Development 

OMB Office of Management and Budget 

PMA President’s Management Agenda 

WHOFBCI White House Office of Faith-Based and Community 

 Initiatives 

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Page iii GAO-06-616 Faith-Based and Community Initiative
United States Government Accountability Office

Washington, DC 20548 

June 19, 2006 

The Honorable George Miller 

Ranking Minority Member 

Committee on Education and the Workforce 

House of Representatives 

The Honorable Pete Stark 

Ranking Minority Member 

Subcommittee on Health

Committee on Ways and Means 

House of Representatives 

Each year the federal government provides billions of dollars to 

organizations that provide social services to needy families and 

individuals. In large part, these funds are provided through competitive 

grants and contracts either directly to organizations or through formula 

grants passed through state agencies to local organizations. Organizations 

providing these services have traditionally included both secular and faithbased organizations (FBO), which include churches and religiously 

affiliated entities. In the past, as a condition of receiving public funds, 

FBOs were required to secularize their services and premises so that their 

social service activities were distinctly separate from their religious 

activities.1

 More recently, courts have become less concerned with the 

religious nature of the organization, and in 1996 Congress enacted 

“charitable choice” provisions which authorized religious organizations2

 to 

compete on the same basis as other organizations for federal funding 

under certain programs without having to alter their religious character.3

 1

This was based on a number of Supreme Court opinions, which interpreted the First 

Amendment and addressed the eligibility of religious organizations to receive federal funds.

See Committee for Public Education v. Nyquist, 413 U.S. 756 (1973). 

2

The federal legislation applies to charitable, religious, or private organizations but does not

specifically define the term “religious organization.” 

3

For a discussion on implementation of charitable choice regulations see GAO, Charitable

Choice: Federal Guidance on Statutory Provisions Could Improve Consistency of 

Implementation, GAO-02-887 (Washington, D.C.: Sept. 10, 2002). 

Page 1 GAO-06-616 Faith-Based and Community Initiative
In 2001, the President created the White House Office of Faith-Based and 

Community Initiatives (WHOFBCI) to establish policies, priorities, and 

objectives to further expand the work of faith-based and community 

organizations. In that same year, the President, by executive order, created 

centers for the Faith-Based and Community Initiatives (FBCI) in five 

federal agencies that administer a broad range of social service programs.4

Then, through a series of executive orders, the President incorporated 

charitable choice principles in social service programs administered by 

federal agencies, created initiative-related centers in six additional federal

agencies,5

 and established fundamental principles for FBOs receiving 

federal funds. Modeled after the charitable choice legislation, these 

principles included safeguards designed to protect the interests of FBOs, 

beneficiaries receiving social services, and government agencies providing 

federal funds. For example, FBOs are allowed to retain religious icons and 

symbols in the facilities where they provide services and generally are not 

prohibited by federal law from making employment decisions based on 

religious grounds, even after receiving federal funds. However, they are 

not permitted to provide “inherently religious” activities such as prayer or 

worship with direct federal funds or discriminate against beneficiaries on

the basis of religion. 

The Administration’s efforts to expand opportunities for these 

organizations and to strengthen their capacity to provide social services 

through its initiative has sparked considerable interest both among various 

parties involved in providing social services and among researchers, 

religious leaders, and other groups. Some have lauded efforts to encourage 

more FBOs to seek federal funds, maintaining that these organizations are 

more in tune with the needs of their communities than other organizations

and can better serve individuals that may need a range of social services. 

Others have expressed concerns about the potential for federal funds to be

used for religious purposes and the extent to which organizations are 

monitored to ensure the appropriate use of federal funds. Government 

agencies primarily monitor grantees by reviewing grantee documents, 

conducting site visits, and conducting single audits. The Single Audit Act 

requires state and local governments and nonprofit organizations that 

 4

These agencies are the Departments of Health and Human Services, Housing and Urban 

Development, Education, Labor, and Justice. 

5

The six additional centers are the Department of Agriculture, the Agency for International 

Development, the Department of Commerce, the Department of Veterans Affairs, and the

Small Business Administration, and most recently, the Department of Homeland Security. 

Page 2 GAO-06-616 Faith-Based and Community Initiative
expend $500,000 or more in federal awards in a fiscal year to have a single

audit, which is an audit of the federal grantee’s financial statements and 

compliance with laws and regulations governing federal awards. While 

government agencies are responsible for ensuring that grantees comply 

with grant requirements, little is known about how these agencies are 

working with FBOs to ensure that these organizations understand and 

comply with the safeguards. 

In addition, a sound performance and reporting system for the initiative is 

important in light of claims by some interested parties that the initiative 

has increased participation by faith-based and community organizations in

providing federally funded social services. It is also important as Congress 

is likely to continue to discuss efforts to formalize—by establishing in 

statute—the WHOFBCI and the work activities within the federal centers 

for the faith-based and community initiative. An informed debate about

these issues is helped by the availability of credible performance 

information focusing on the outcomes achieved with budgetary resources 

and other tools.6

To shed light on how centers and federal agencies are carrying out the 

initiative and how the government is assessing the initiative’s

performance, you asked us to explore the work of the centers and 

agencies in implementing the initiative, including the extent to which 

government entities are providing guidance to, and oversight of, faithbased grantees. 

Specifically, you asked: 

1. How do the activities and resources of the initiative-related centers in 

five federal agencies compare? 

2. What are the grant award procedures for selected project and formula 

grants, and are they the same for all grant applicants, including FBOs? 

3. To what extent are selected federal and state agencies providing 

information on and ensuring compliance with the safeguards designed 

to protect the interests of FBOs, beneficiaries, and the government? 

 6

For more information on reexamining federal programs and performance budgeting, see 

GAO, 21st Century Challenges: Performance Budgeting Could Help Promote Necessary

Reexamination, GAO-05-709T (Washington, D.C.: June 14, 2005). 

Page 3 GAO-06-616 Faith-Based and Community Initiative
4. How is the federal government measuring the progress of the 

initiative? 

To understand how the centers administer the initiative, we interviewed 

center officials in the five agencies that were the first to establish centers

for the Faith-Based and Community Initiative. These are the Departments 

of Education (Education), Health and Human Services (HHS), Housing 

and Urban Development (HUD), Justice, and Labor. We analyzed data on 

their expenditures and work activities and, to assess the reliability of the 

data for expenditures, we conducted semistructured interviews with 

agency officials about data quality control procedures and reviewed 

relevant documentation. We determined the data were sufficiently reliable 

for the purposes of this report. Our review focused on 10 programs, 

including at least 1 program from each of these five agencies. To obtain 

information on how these agencies award and monitor grants to FBOs, we 

interviewed program officials administering six federal project grants 

(competitive project grants awarded by a federal agency directly to a local

organization), and one competitive procurement program. We chose 

programs that awarded grants to numerous FBOs and that provided a 

range of social services, including mentoring of children, housing for the 

homeless, and business development grants to refugees.7

 We also met with

federal program officials responsible for overseeing three formula grant 

programs (program grants that are passed through state agencies to local

organizations) that attract or are likely to attract significant FBO 

participation.8

 For the 10 programs included in our review, we also 

analyzed pertinent documents provided to grantees and prospective

grantees, such as grant applications, contracts, and award letters. Our 

findings pertain to the 10 programs included in our review and are not 

generalizable to all programs administered by these five agencies. To 

understand how the federal government measures the progress of the 

initiative, we spoke with officials from the Office of Management and 

Budget (OMB) and analyzed pertinent documents. 

 7

The six competitive project grant programs are Mentoring Programs (Education); 

Community-Based Abstinence Education Program; Mentoring Children of Prisoners; 

Microenterprise Development Program (HHS); Continuum of Care (HUD); and Small 

Grassroots Faith-Based and Community Organizations Connecting with the One-Stop

Delivery System (Labor). The competitive procurement program is Justice’s Community 

Corrections Contracting. 

8

The formula grants included in our review are HHS’s Abstinence Education Program and 

its Substance Abuse Prevention and Treatment Block Grant, and HUD’s Emergency Shelter

Grant Program. 

Page 4 GAO-06-616 Faith-Based and Community Initiative
To obtain more specific information on how the three formula grants are 

awarded by the states to local organizations and how their grantees are 

monitored for compliance with the safeguards, we visited four states—

California, Georgia, Ohio, and Texas—and interviewed numerous state 

officials. We also interviewed county officials in California and Ohio and

several federal regional and field office program staff. We chose these 

states because they each received significant funding from federal direct 

programs in 2003 or 2004 and because FBOs in these states received funds 

from at least 3 or more of our selected programs. In addition, we 

considered geographic dispersion and diversity in terms of whether the 

state established an initiative-related center.9

We also conducted semistructured interviews with 26 selected FBOs in 

these four states to determine their understanding of program regulations 

and the extent to which they have been monitored for compliance with the 

key safeguards related to the initiative. We selected FBOs that had 

received federal project and formula grants in 2003 or 2004 from the 

10 programs included in our review. Finally, we interviewed independent

auditors in three states who had completed single audits for a few of our 

selected FBOs. Because we used a nonprobability sample of FBOs, our 

findings are not generalizable to all FBOs receiving federal funds from the 

programs included in our review. Our work was conducted from March 

2005 through June 2006 according to generally accepted government 

auditing standards. 

The five centers for faith-based and community initiatives that we 

reviewed employ a range of activities and resources to implement the 

initiative, in part based on what activities center officials determined was 

necessary to fulfill their responsibilities for the initiative and differences in 

center staffing levels and administrative costs. One of the centers’ first 

tasks was to identify and eliminate barriers to the participation of faithbased and community organizations in federally funded services. The 

centers’ ongoing efforts include collecting data on FBOs’ participation in 

federal grant programs, developing pilot programs, and providing outreach 

and technical assistance to faith-based and community organizations. The 

centers adopted different approaches to technical assistance training 

activities based on what they needed to do to support the initiative. In

Results in Brief 

 9

Texas and Ohio have established state faith-based offices, while California and Georgia 

have not. 

Page 5 GAO-06-616 Faith-Based and Community Initiative
general, HUD’s and Education’s centers help organizations learn how to 

apply for funds, while Labor’s center helps grantees learn how to manage 

grants. Justice’s and HHS’s centers coordinate with program offices that 

provide training to these organizations. The next phase of the centers’ 

work will focus on encouraging partnerships between faith-based and 

community organizations and state and local governments. Since fiscal 

year 2002, the five centers estimated that they had cumulatively expended 

more than $24 million on administrative activities, but these estimates 

generally did not include additional funding that agency program offices 

provided to assist in the initiative’s implementation, such as administrative 

costs associated with program offices’ efforts to assist faith-based and 

community organizations. In fiscal year 2005, four of the centers spent the 

largest proportion of their funding on staff salaries and benefits—ranging 

from 35 percent to 87 percent—followed by other expenditures for such 

administrative costs as rent, contracts, and travel. Factors such as the 

number of staff and differences in administrative costs such as rent and 

travel account for, in part, the differences in resources across centers. 

Federal and state officials told us they do not treat FBOs any differently 

than other organizations during the grant award process in the 10 federal 

programs we examined. Some new programs have been established since 

the beginning of the initiative to provide training and technical assistance

to faith-based and community organizations and increase faith-based and 

community organization participation in delivering federally funded 

services. In the programs we reviewed, agencies used standard criteria and 

independent reviewers to evaluate applications for funding, and reviewers 

do not necessarily know whether an applicant is faith-based because 

organizations are generally not required to identify themselves as FBOs. 

Funding decisions were generally based on applicants’ scores that were 

awarded for various criteria, such as the quality of the project plan. While

the process to award funds is the same for faith-based as for other 

organizations, between fiscal years 2002 and 2005, federal agencies have

awarded over $500 million through new competitive grant programs that 

are intended to encourage greater participation of faith-based and 

community organizations in providing these social services. Some of these 

programs, such as Labor’s Prisoner Reentry Initiative, limit eligibility to 

these organizations, while others, such as HHS’s Compassion Capital Fund

Demonstration Program, fund intermediary organizations that provide 

capacity-building assistance to faith-based and community organizations. 

The government agencies administering the programs that we reviewed 

provided grantees with some information on the safeguards designed to 

protect FBOs, their clients, and the government, but few agencies included 

Page 6 GAO-06-616 Faith-Based and Community Initiative
in their monitoring guidelines checks for grantee compliance with the 

safeguards related to nonallowable activities and nondiscrimination 

against beneficiaries. Specifically, 7 of the 10 federal programs that we 

reviewed provided a statement to grantees regarding the prohibition on 

the use of direct federal funds for inherently religious activities. Officials 

at Justice told us that they believe FBOs in the Community Corrections 

Contracting program are exempt from the prohibition on providing 

inherently religious activities because of an exception specified in the 

agency’s regulations. However, we believe that the scope of this exception 

is left unclear and thus could create uncertainty for FBO program staff 

about allowable religious activities using federal funds. Regarding the 

safeguards on nondiscrimination against beneficiaries and permissible 

hiring by FBOs, only 4 provided a statement on nondiscrimination and 

only 3 provided information on permissible hiring by FBOs based on 

religion. While officials in all 26 FBOs that we visited told us that they 

understood that federal funds could not be used for inherently religious 

activities, 4 of the 13 FBOs that offered voluntary religious activities—

such as prayer or worship—did not appear to understand the requirement 

to separate these activities in time or location from their program services 

funded with federal funds. For example, one FBO official told us that she 

discusses religious issues while providing federally funded services if 

requested by a participant and no other participants object, and a few told 

us that they pray with beneficiaries during program time if requested by 

the beneficiary. Government agencies are not required to monitor FBO 

grantees differently than secular organizations. Only 2 of the 7 federal 

agencies providing project and procurement grants, and 5 of the 13 state 

agencies administering formula grants included references in their 

monitoring guidelines on grantee compliance with these safeguards. 

Agencies’ single audit reviews, which can be used as an effective tool to 

monitor organizations, only apply to those organizations expending 

$500,000 or more in federal funding in a given year, and generally do not 

include specific checks for these safeguards. 

OMB and WHOFBCI assess agencies’ progress in implementing the shortterm goals of the initiative, but data limitations—such as the difficulty in 

identifying an FBO—and a lack of publicly available information hinder 

the federal government’s efforts to measure agencies’ progress in 

achieving the initiative’s two long-term goals. OMB and WHOFBCI assess 

agencies’ implementation of the initiative and grade agencies’ efforts to 

carry out activities in accordance with the Standards for Success that 

outline the centers’ responsibilities, such as collecting accurate data on 

the participation of faith-based and community organizations and 

conducting outcome evaluations of all pilot programs. OMB and 

Page 7 GAO-06-616 Faith-Based and Community Initiative
WHOFBCI award a green grade to agencies that meet all of the initiative’s

standards for success. In the first quarter of fiscal year 2006, three of the 

five centers we reviewed received green status. OMB established two longterm goals for the initiative—greater participation by faith-based and 

community organizations and improved participant outcomes—but data 

limitations may hinder efforts to assess the initiative’s progress in 

achieving these goals. Importantly, there are no criteria for what 

constitutes a faith-based organization that all agencies must use to identify

FBOs, and FBOs are not required to self-identify, leaving individual 

agencies and states to determine which organizations are faith-based. 

Determining what elements constitute an FBO is challenging. Although no

method can ensure that all data collected are accurate, having consistently

applied criteria or requiring self-identification would provide greater 

assurance that agencies are collecting accurate data than the current 

method. Moreover, while the WHOFBCI has published data on trends of 

FBO participation in providing federally funded social services, it has not

reported on the participation of community-based organizations—the 

other group of organizations specified in the long-term goal. Consequently, 

it is unclear whether the reported data by the WHOFBCI provides 

policymakers with a sound basis to assess the progress of agencies in 

meeting the initiative’s long-term goal of greater participation of faithbased and community organizations. Progress in achieving the initiative’s 

long-term goal of improved participant outcomes is not yet known 

because most agencies have not completed the OMB-required outcomebased evaluations of their pilot programs. Of the 15 pilot programs under 

way, 1 outcome-based evaluation has been completed, 6 evaluations are 

under way, and 6 are planned. Outcome-based evaluations are not planned 

for 2 of the pilot programs. Outcome-based evaluations may involve 

several years of data collection before the analysis can take place and 

several of these pilot programs were initiated only a few years ago. OMB 

also faces other challenges in measuring and reporting on how agencies 

are progressing toward accomplishing the initiative’s two long-term goals. 

To improve grantee understanding and federal agency oversight of the 

equal treatment regulations for programs in which faith-based 

organizations are eligible for federal funding, we recommend that the 

Director of OMB ensure that all agencies with initiative-related centers 

include information on the equal treatment safeguards in their grant 

documents and direct agencies to include a reference to these safeguards

in their monitoring tools. To ensure that contractors for Justice’s 

correctional programs understand the exception to the prohibition on 

using federal funds for inherently religious activities, we recommend that 

the Attorney General clarify the exception in Justice’s equal treatment 

Page 8 GAO-06-616 Faith-Based and Community Initiative
regulations and include a clear explanation of the exception and its scope 

in the contracts for its correctional programs. To improve accountability 

of the Faith-Based and Community Initiative, we recommend that the 

Director of OMB work with agencies to improve how federal agencies 

identify which organizations are faith-based and develop a plan for 

measuring and reporting on agency progress in achieving the long-term 

goals of the initiative. 

We received comments from Education, HHS, HUD, Justice, Labor and 

OMB on a draft of this report. OMB officials stated that they generally 

agreed with the report’s recommendations, although they had comments 

pertaining to several of the recommendations. With regard to our 

recommendation that program-specific single audit supplements include a 

reference to the equal treatment safeguards, OMB stated that for some 

programs that already have extensive audit requirements, expanding the 

program-specific audit requirements could pose additional burdens to the 

independent auditors conducting those reviews. In response, we modified 

the recommendation to indicate that it might not be appropriate to include 

a reference to the equal treatment safeguards in some program-specific 

audit supplements. OMB officials raised issues with our recommendation 

pertaining to getting better data, saying that while they agreed that 

obtaining better data would be helpful, there are obstacles to obtaining 

better data and that they are uncertain about the extent to which the data 

could be further improved. While we acknowledge the challenges in 

obtaining data, various agency centers or program offices are currently 

applying criteria—whether explicitly or implicitly—that determine 

whether they categorize an organization as an FBO, and we believe that 

greater consistency in their use of criteria could improve the data. With 

regard to our recommendation that OMB develop a plan to measure and 

report out on long-term goals, OMB said it was reasonable for OMB to 

report out on the results of agencies’ outcome evaluations of pilot 

programs but that the White House was already reporting data on 

participation of faith-based organizations. OMB proceeded to

acknowledge that there is a lack of clarity about how the two long-term 

goals of the initiative are linked with OMB’s Standards for Success and 

that it may be appropriate to clarify their connection as part of a 

reassessment of the long-term goals. In response, we broadened the 

wording of our recommendation to note that it may be appropriate to 

clarify the connection of the long-term goals to the Standards for Success. 

In its comments, Justice generally agreed with the two recommendations 

we made to the Attorney General. Justice, Education, HHS, HUD, and 

Labor raised various issues with the report, which we discuss and respond

to in the agency comments section of the report and appendix IV on 

Page 9 GAO-06-616 Faith-Based and Community Initiative
Justice’s comments. Education, HHS, HUD, Labor and OMB also provided 

technical comments, which we incorporated where appropriate. 

Citing the crucial role faith-based and community organizations play in 

areas such as curbing crime and overcoming addiction, in 2001 the 

President introduced the WHOFBCI with the goal of expanding 

opportunities for these organizations and to strengthen their capacity to 

provide social services. The President issued executive orders that created 

the WHOFBCI, initiative-related centers in several federal agencies, and 

rules to ensure that organizations are treated equally in government 

programs. 

Beginning in January 2001, the President issued several executive orders 

to implement the Faith-Based and Community Initiative (see table 1). 

These executive orders established a WHOFBCI and centers for faithbased and community initiatives in a number of federal agencies as well as

principles for ensuring equal treatment of faith-based and community 

organizations in federal government programs. 

Background 

Executive Orders 

Establish Centers and 

Responsibilities 

Page 10 GAO-06-616 Faith-Based and Community Initiative
Table 1: Executive Orders Related to the Faith-Based and Community Initiative 

Executive order Purpose Description

Executive Order 13199

January 29, 2001 

Created the White House Office of FaithBased and Community Initiatives The White House Office of Faith-Based and Community 

Initiatives is given lead responsibility to establish policies, 

priorities, and objectives for efforts to expand opportunities for 

faith-based and community organizations to provide social and 

community services 

Executive Order 13198

January 29, 2001 

Created Centers for Faith-Based and 

Community Initiatives in five agencies: 

Education, HHS, HUD, Justice, and Labor 

To coordinate agency efforts to eliminate obstacles to the 

participation of faith-based and community organizations in 

providing federally funded social services 

Executive Order 13280

December 12, 2002 

Created centers for Faith-Based and 

Community Initiatives in two additional 

agencies: Department of Agriculture and 

Agency for International Development 

To coordinate agency efforts to eliminate obstacles to the 

participation of faith-based and community organizations in 

providing federally funded social and community services 

Executive Order 13279

December 12, 2002 

To provide, among other things, guidance 

to federal agencies in formulating policies 

regarding faith-based and community 

organizations and to ensure equal 

protection under the laws for these 

organizations 

Set out criteria on fundamental principles and policymaking that 

designated federal agencies can use in establishing safeguards 

applicable to FBOs providing services under federal programs 

Executive Order 13342

June 1, 2004 

Created centers for Faith-Based and 

Community Initiatives in three additional 

agencies: Departments of Commerce and 

Veterans Affairs and the Small Business 

Administration

To coordinate agency efforts to eliminate obstacles to the 

participation of faith-based and community organizations in 

providing federally funded social and community services 

Executive Order 13397 

March 7, 2006

Created Center for Faith-Based and 

Community Initiatives in the Department of 

Homeland Security 

To coordinate agency efforts to eliminate obstacles to the 

participation of faith-based and community organizations in 

providing federally funded social and community services 

Source: GAO analysis of White House Office of Faith-Based and Community Initiatives Information. 

These executive orders identify the key responsibilities for each center: 

• an agencywide audit of barriers to participation of faith-based and 

community organizations in delivery of social services; 

• removal of barriers to these organizations’ participation in providing 

federally funded social and community services; 

• a comprehensive effort to incorporate faith-based and community 

organizations in department programs and initiatives; 

• development of pilot and demonstration programs to increase these 

organizations’ participation in federal, state, and local initiatives; and 

• development and coordination of outreach efforts to disseminate 

information more effectively to these organizations. 

The executive orders also direct the centers to coordinate their activities 

with the WHOFBCI. Centers do not award any federal funds to faith-based 

and community organizations. However, they coordinate with agency 

Page 11 GAO-06-616 Faith-Based and Community Initiative
program offices that are responsible for awarding federal funds and 

monitoring grantees. For example they review program funding guidance 

to ensure that the program does not contain barriers to these 

organizations’ participation and interact with agency program offices to 

develop and coordinate department efforts to disseminate information 

more effectively to faith-based and community organizations with respect 

to programming changes, contracting opportunities, and other department 

initiatives. 

Equal Treatment 

Regulations Set Forth 

Safeguards Applicable to 

Direct and Formula 

Federal Grants 

As noted in table 1, Executive Order 13279 of December 12, 2002, directed

designated federal agencies to establish safeguards for the participation of 

faith-based organizations in a broad set of federal social service programs, 

including mentoring, housing, and job training programs. Congress had 

previously enacted charitable choice provisions as part of the Temporary 

Assistance for Needy Families (TANF) program, Community Services 

Block Grant program, and the Substance Abuse Prevention and Treatment 

Block Grant several years earlier.10

To implement this executive order, federal agencies with centers for the 

faith-based and community initiative subsequently issued “equal 

treatment” rules. These rules apply to project grants awarded by the 

federal government to faith-based and community organizations, formula 

and block grants awarded to states where funds are passed down to these 

organizations, and other financial agreements.11 These rules state that 

FBOs are eligible to participate in federal programs on the same basis as 

other private organizations, and include safeguards to protect the interests 

of FBOs, beneficiaries of social services, and government agencies 

providing funds (see table 2). For example, FBOs are not permitted to use 

direct federal funds for inherently religious activities such as prayer, 

religious instruction, worship, or proselytization. If an FBO conducts such 

activities, the activities must be separated by time or location from 

federally funded services or programs and must be voluntary for the 

beneficiary. However, they are allowed to retain religious art, icons, or 

 10Charitable choice provisions were enacted for TANF as part of the Personal 

Responsibility and Work Opportunity Reconciliation Act of 1996, in the 1998

reauthorization of the Community Services Block Grant program, and in the amendments

to the Public Health Service Act in 2000 affecting the Substance Abuse Prevention and 

Treatment Block Grant Program. 

11The equal treatment rules also cover agency contracts and cooperative agreements. 

Page 12 GAO-06-616 Faith-Based and Community Initiative
symbols in the facilities where they provide services. In addition, for the 

programs in our review, FBOs generally are not prohibited under federal 

law from making employment decisions based on religious grounds, even 

after receiving federal funds. 

Table 2: Equal Treatment Safeguards and the Key Parties They Are Designed to Protect 

Safeguards 

Government

entities FBOs Beneficiaries

FBOs are eligible to compete for funding on the same basis as other nonprofit 

organizations. 

X

FBOs may not use direct government fundsa to support inherently religious activities 

such as prayer, worship, religious instruction, or proselytization. Any inherently 

religious activities must be offered separately in time or location from services 

directly funded with government assistance and must be voluntary for participants. 

X X

FBOs retain control over their internal governance and do not have to remove 

religious art, icons, and symbols. X

FBOs cannot discriminate on the basis of religion or religious belief in providing 

services to clients. X

FBOs generally retain the ability to make employment decisions on religious

grounds, even after receiving federal funds.b X

Source: GAO analysis.

a

This safeguard does not apply to federal funds provided indirectly to religious organizations. For 

example, it does not apply to funds that a provider receives as a result of an independent choice of a 

beneficiary, such as programs that provide vouchers to beneficiaries who then redeem the vouchers 

for services at a provider of their choice. Providers may offer voluntary religious activities without 

separation of time or location from the social service if beneficiaries are given a genuine choice 

between faith-based and secular service providers as part of indirect funding, such as a voucher 

program. 

b

There are exceptions to this protection as some programs, such as Workforce Investment Act 

programs and Head Start, currently contain statutory language that prohibits faith-based 

organizations receiving funds from making employment decisions on religious grounds. In addition, 

FBOs may be subject to state or local laws prohibiting discrimination in employment based on

religion. 

Charitable choice provisions enacted by Congress for the TANF and 

Substance Abuse Prevention and Treatment programs contain an 

additional safeguard that entitles clients who object to the religious 

character of a provider to receive services from an alternative provider to 

which the client has no religious objection. However, this safeguard is not 

part of the equal treatment rules agencies issued in response to the 

President’s 2002 executive order and does not apply to other federal 

programs. 

During the federal rule-making process for the equal treatment regulations, 

some interested parties expressed a need for greater clarity and 

Page 13 GAO-06-616 Faith-Based and Community Initiative
safeguards in the proposed rules. For example, commenters stated that it

was unclear which activities would be considered “inherently religious.” 

Agencies declined to clarify which activities would be considered 

inherently religious apart from the general examples provided in the 

agencies’ respective rules, noting the difficulty in establishing a list of such

activities and that the Supreme Court has not comprehensively defined 

these activities.12 Of the agencies we reviewed, most cited the Supreme 

Court decision of Mitchell v. Helms as support for the view that aid 

provided to religious institutions does not necessarily advance the 

institutions’ religious purposes and emphasized the secular nature of the 

federally funded services.

13 The regulations state that if a grantee engages 

in religious activities such as prayer, such activities must be voluntary for 

the beneficiary and the grantee must offer them separately in time or 

location from the programs funded with direct federal financial 

assistance.14

Some commenters on agencies’ equal treatment regulations also urged 

agencies to adopt additional assurances to prevent funds from being 

diverted for improper religious purposes.15 However, in their final rules, 

agencies stated they found no basis for requiring additional assurances or 

greater oversight and monitoring of FBOs, as all participants must comply

with all rules applicable to federal grants, including the equal treatment 

rules. In addition, they stated that agencies’ current monitoring and 

oversight practices for all grantees would be sufficient to ensure that 

federal funds are used for eligible activities. 

 12See,Participating in Justice Department Programs by Religious Organizations; 

Providing for Equal Treatment for All Justice Department Program Participants, 

(Department of Justice Final Rule) 69 Fed. Reg. 2832 (2004). 

13530 U.S. 793 (2000) (plurality opinion). 

14See, for example, the Department of Justice regulation at 28 C.F.R. §38.2(b)(1). 

15In her concurring opinion in Mitchell v. Helms, Justice O’Connor found private schools’ 

receipt of funding from the federal program at issue in that case (providing funds to state 

educational agencies to be used for instructional and educational materials) to be

constitutionally acceptable in part because of the adequacy of the safeguards employed by 

the federal, state, and local governments to prevent diversion of federal program funds to

religious purposes. These safeguards included signed assurances by the schools receiving 

the program funds, monitoring visits by the state and local educational agencies, and 

appropriate labeling of materials and equipment purchased with program funds. 

Page 14 GAO-06-616 Faith-Based and Community Initiative
Federal agencies monitor their grantees for programmatic and financial

compliance. OMB provides general guidance, through Circular A-110, on

the administration by federal agencies of grants to and agreements with 

nonprofit organizations.16 OMB guidance also notes that the awarding 

agency may make site visits part of its monitoring procedures, but it does 

not require site visits or prescribe how many grantees should be visited or

how often. 

Agencies Monitor Grantees 

Through Various Means, 

Including Desk Audits, Site 

Visits, and the Single Audit 

Nonfederal entities (i.e., state, or local government, or a nonprofit 

organization) that expend $500,000 or more annually in federal awards are 

required to have a single audit conducted for that year. The Single Audit 

Act, as amended, replaced multiple audits of separate grant awards with 

one organizationwide audit.17 Federal awarding agencies are responsible 

for such tasks as issuing a management decision on audit findings within 

6 months after receiving the audit report and ensuring that the recipient 

takes appropriate and timely corrective action.18 OMB Circular A-133 

requires the auditor to report on compliance, and include an opinion by 

the auditor as to whether the entity complied with laws, regulations, and 

grant agreements. In addition, federal agencies provide specific audit

guidelines for selected programs that direct the auditor to check for 

program-specific compliance requirements. For example, program-specific 

compliance requirements include a section on allowable and unallowable

activities that detail what a grantee can and cannot do with federal funds 

in a particular program. For those programs that do not have programspecific guidelines, an auditor is to use the more general single audit 

guidance provided by OMB. 

 16OMB Circular A-110 requires that the performance reports shall generally contain brief 

information, such as (1) a comparison of actual accomplishments with the goals and 

objectives established; (2) if appropriate, reasons why goals were not met; and (3) other 

pertinent information, such as an explanation of cost overruns. It also provides guidance

on the type of information that should be included in the grantee’s financial report. 

17OMB Circular A-133 provides single audit requirements. It sets forth standards for

obtaining consistency and uniformity among federal agencies for the audit of states, local 

governments, and non-profit organizations expending federal awards. 

18See OMB Circular A-133 for other federal agency requirements that pertain to single 

audits. 

Page 15 GAO-06-616 Faith-Based and Community Initiative
The five centers for faith-based and community initiatives that we 

reviewed employ a range of activities and resources to implement the 

initiative, in part based on what activities center officials believed was 

necessary to fulfill their responsibilities for the initiative and differences in 

staffing levels and administrative costs. Initially, the centers’ activities 

focused on identifying and eliminating barriers to the participation of 

faith-based and community organizations in federally funded services. The 

centers’ ongoing efforts include collecting data on FBOs’ participation in 

agency programs, implementing pilot programs, and providing outreach

and technical assistance to these organizations. The centers adopted 

different approaches to technical assistance training activities. The 

centers’ future work will focus on encouraging partnerships between faithbased and community organizations and state and local governments, 

according to center officials. The centers estimated that they have 

cumulatively spent more than $24 million on administrative activities, 

although their resource levels and administrative costs varied depending 

on the number of staff members and rent and travel costs. 

Initially, the centers set out to identify and eliminate barriers to the 

participation of faith-based and community organizations in federally 

funded services. These barriers included regulations, rules, and outreach 

activities that either discriminated against or discouraged the participation 

of these organizations in federal programs. To identify barriers, the centers 

reviewed selected programs and gathered information on program 

eligibility and program regulations, among other things. Each center 

submitted a report to the White House with its findings, and in August 2001

the White House published the results of the centers’ efforts.19 Specifically, 

the report found that the centers identified barriers such as programs that 

excluded FBOs from applying for federal funds, confusion on the part of 

agency officials and FBOs about the ability of FBOs to consider religion in

employment decisions, complex grant applications and agreements, and 

limited accessibility of federal grant information. Each center then issued 

equal treatment rules in 2004.

20 These rules were intended to help ensure 

that faith-based and community organizations could compete on the same 

basis as other organizations for federal funds while retaining their 

Centers Employ 

Different Activities 

and Resources to 

Implement the 

Initiative 

Centers Have Acted to 

Remove Barriers to FaithBased and Community 

Organizations, Collect 

Data, and Tailor their 

Outreach and Assistance 

Efforts to Meet the 

Agencies’ Needs 

 19The White House. Unlevel Playing Field: Barriers to Participation by Faith-Based and 

Community Organizations in Federal Social Service Programs (Washington, D.C., 2001). 

20HUD issued equal treatment rules for eight programs administered by the HUD Office of

Community Planning and Development in 2003; in 2004 HUD issued equal treatment rules 

applicable to all HUD programs. 

Page 16 GAO-06-616 Faith-Based and Community Initiative
independence and protecting the rights of beneficiaries of social services. 

The adopted rules were largely identical across each agency.

Since 2003 the centers have collected data on, and WHOFBCI has reported 

on, funds awarded to FBOs in direct grant programs that allow faith-based 

and community organization participation.21 The White House published 

the results for all five agencies for fiscal years 2003 through 2005, 

characterizing the information as a snapshot of federal grants awarded to 

FBOs. For the fiscal year 2005 data collection effort, the centers also 

obtained these data from state and local governments administering 

formula grants. The centers we reviewed each tracked funding to FBOs for 

one formula grant program within their agencies. The White House notes 

that because the majority of federal social service dollars are awarded 

through formula grants, such a review is critical for understanding the 

extent of FBO participation. Center officials noted that they do not have a 

standard definition to identify FBOs, leaving each center, some working 

with program offices, with the responsibility of identifying FBOs using a 

combination of methods. For example, a nonprofit organization that 

applies for federal funds may self-identify as a faith-based organization or 

a community-based organization as part of a voluntary survey that is 

included in grant application packages.22 In cases where an organization 

elects not to complete this survey, center officials told us that program 

and center staff applied a number of other methods to identify

organizations, including the review of information from grant applications, 

information provided by program staff familiar with the organization, 

Internet research, or name recognition. 

Each center has also assisted in developing pilot programs within its 

agency to strengthen the partnership between faith-based and community 

organizations and federal agencies. In general, these programs provide 

services related to the policy focus of each agency. For example, Labor 

has pilot programs to build partnerships between faith-based and 

community organizations and the workforce system. Similarly, Education

implemented a program to educate these organizations on how to become 

providers of supplemental educational services. Most of Labor’s and HHS’s 

 21Center officials told us that they are now collecting data on community-based 

organizations. HUD and Justice officials stated that in 2005 they submitted data on 

community-based organizations to the WHOFBCI, and Labor officials told us that they

reported this data to WHOFBCI several years ago. 

22OMB No.1890-0014, “Survey on Ensuring Equal Opportunity for Applicants.”

Page 17 GAO-06-616 Faith-Based and Community Initiative
pilot programs, as well as one of HUD’s two pilot programs, represent new 

grant programs that either award funds directly to faith-based and 

community organizations or to intermediary organizations that help these 

organizations expand their services. In contrast, HUD’s second pilot 

program and most of the pilot programs at Education and Justice do not 

provide funds directly to faith-based and community organizations or 

intermediaries. Education and HUD’s programs provide information and 

technical assistance to these organizations to help them access federal 

funds or provide services, while Justice’s pilot programs promote the 

participation of faith-based and community organizations in areas such as

juvenile offender mentoring and fraud prevention. 

In addition, the centers provide outreach and technical assistance 

activities to enhance the opportunities of faith-based and community 

organizations to compete for federal funding. To inform these 

organizations about the resources available to them, the centers engage in

similar outreach activities such as posting grant and funding opportunities 

on center Web sites and disseminating information to these organizations 

via e-mail. However, the centers adopted different approaches to their 

technical assistance training activities. In general, HUD’s and Education’s

centers help organizations learn how to apply for funds, while Labor’s 

center helps grantees learn how to manage grants. Justice’s and HHS’s 

centers coordinate with program offices that provide these services. 

Center officials said their approaches to technical assistance were based 

on what they determined would best meet needs within their agency and 

fulfill their responsibilities to enhance opportunities for faith-based and 

community organizations. For example, HUD’s center—citing the need to

educate faith-based and community organizations on how to access 

resources to meet needs in their communities—has conducted a series of 

free grant-writing seminars for faith-based and community organizations 

since 2004. HUD has also designated staff in each of its regional and field 

offices to serve as faith-based and community liaisons and to provide 

outreach to these organizations. Education’s center sponsors technical 

assistance workshops for faith-based and community organizations that 

provide information on the agency’s grant opportunities as well as 

information on how organizations can become approved providers of 

supplemental educational services. 

Labor’s center reported that the large size of Labor’s grant programs was 

an obstacle that prevented small grassroots organizations, including those 

that are faith-based, from participating in its programs. As a result, Labor’s 

center officials said they tailored their outreach and technical assistance 

efforts to focus on providing assistance to smaller organizations to build 

Page 18 GAO-06-616 Faith-Based and Community Initiative
their capacity to manage grants and to encourage partnerships between 

small grassroots organizations and the workforce system. For example, 

the Labor center sponsors technical assistance training for small faithbased and community organization grantees on how to manage grants and 

measure program effectiveness, among other things. In contrast to the 

centers at HUD, Education, and Labor, the Justice and HHS centers 

coordinate efforts with program offices that provide these services. 

Among these services are grant-writing seminars provided through the 

Substance Abuse and Mental Health Services Administration (SAMHSA) in 

HHS and the Office of Juvenile Justice and Delinquency Prevention in 

Justice. Center officials at the Justice and HHS centers told us that they 

adopted this approach to take advantage of efficiencies from working with 

program offices that provided these services prior to the creation of the 

centers. 

According to center officials, the next phase of the centers’ work will 

focus on encouraging the establishment of state and local government 

partnerships with faith-based and community organizations, as the 

majority of federal social service funds are distributed through formula 

grant programs administered at the state and local levels. OMB has 

directed each center to help implement an action plan to enhance the 

opportunities of faith-based and community organizations competing for 

federal funds provided through state and local governments, and to 

provide guidance to state and local officials on the equal treatment rules. 

The President has also encouraged states to create offices or liaisons to 

provide information and resources for faith-based and community 

organizations interested in partnering with state and local governments to 

provide social services. Thirty-two states have now established state 

offices or liaisons for faith-based and community organizations, according 

to the White House. 

Five Federal Centers 

Cumulatively Spent $24 

Million since Fiscal Year 

2002, but Their Funding 

Sources, Staffing Levels, 

and Administrative Costs 

Varied

The five centers that we reviewed estimated that they cumulatively spent 

more than $24 million on administrative activities related to the initiative 

since fiscal year 2002, although the level of resources and their application 

varied across the five centers. As shown in figure 1, centers in HHS, HUD 

and Labor spent between $1 million and $2.3 million annually, while 

centers in Education and Justice spent less than $1 million annually. HHS, 

HUD and Labor’s centers also had more staff in fiscal year 2005 than 

Education and Justice. In fiscal year 2005, HHS, HUD, and Labor had 

Page 19 GAO-06-616 Faith-Based and Community Initiative
between 7 and 9 staff members, while Education and Justice had 5.5 and 

3 respectively.23 In Labor, Education, and Justice’s centers, the majority of 

the center staff members were appointed rather than career staff. 

Figure 1: Estimated Expenditures of Centers for Faith-Based and Community 

Initiatives, Fiscal Years 2002 through 2005 

0

250,000

500,000

750,000

1,000,000

1,250,000

1,500,000

1,750,000

2,000,000

2,250,000

2,500,000

Education HHS HUD Justice Labor Total

Dollars

Source: GAO analysis of Education, HHS, HUD, Justice and Labor data.

Fiscal year 2002

Fiscal year 2003

Fiscal year 2004

Fiscal year 2005

$2,592,736 $5,679,490 $8,158,577 $1,689,731 $6,735,315 $24,855,849

Note: Figures adjusted for inflation. Education’s fiscal year 2002 amount covers the period from May 

19, 2002, to September 30, 2002.

In fiscal year 2005, salaries and benefits of center staff members 

constituted the largest proportion of the funds spent in four of the 

centers,24 ranging from 35 percent to 87 percent of their total 

 23Labor’s center had 7 staff members for the first three quarters of fiscal year 2005; it

currently has 6 staff members, according to a Labor center official. 

24Justice could not provide a detailed breakdown of its center’s expenditures.

Page 20 GAO-06-616 Faith-Based and Community Initiative
expenditures.25 The centers’ remaining expenditures went toward such 

administrative costs as rent, contractual services, travel, printing, and 

supplies. The centers’ estimated expenditures, however, do not include 

other federal initiative-related expenditures, such as the administrative 

costs associated with program offices’ efforts to assist faith-based and 

community organizations.

26 For example, Justice’s Office of Juvenile 

Justice and Delinquency Prevention has allocated $1.87 million since fiscal 

year 2003 to fund federal grant application training for community-based, 

faith-based, and other nonprofit organizations. 

Funding for the centers comes from a variety of sources. Education’s 

center receives its funding through the Office of the Secretary of 

Education and HUD’s center receives its funding through HUD’s salaries 

and expenses account, while Justice’s and HHS’s centers are funded 

through internal agencies such as the Office of Justice Programs in Justice 

and the Administration for Children and Families in HHS. Labor’s center 

receives funds from both its agency’s departmental management account 

and from program offices. In addition, although not required to, HHS has 

included information on funding for its center as part of its congressional 

budget requests for several years, while HUD and Labor have included 

similar information in past budget requests. These agencies have in turn 

received guidance from Congress in the past on the amount of resources 

to allocate to their centers. In contrast, Education and Justice have

provided limited or no information on their centers’ funding to Congress 

as part of their budget requests. In turn, these agencies have not received 

guidance from Congress on the amount of resources to allocate to their 

centers. 

Differences in staffing levels and administrative costs account for, in part, 

the differences in centers’ total expenditures. Staff compensation 

represented the largest category of center spending, and the centers with 

the largest number of staff spent the most on activities to implement the 

initiative.27 Different administrative costs also accounted for some of the 

 25See appendix I for a breakdown of estimated expenditures by the centers for fiscal year 

2005. 

26Labor’s estimates did include funds expended for center activities done on behalf of

internal agencies. 

27Officials in the five centers we reviewed could not explain how initial staff and resource

allocations were made, as many of them did not work in the centers when they were 

established in 2001. 

Page 21 GAO-06-616 Faith-Based and Community Initiative
variation in the center resources. For example, in fiscal year 2005, HHS 

spent more on rent, communications, and utilities than HUD’s center, 

while centers in Education and Labor did not report any expenses for 

these services.28 Centers in HUD and Education spent more in travel 

expenses for fiscal year 2005 than the other centers we reviewed. These 

higher travel expenses were likely associated with the training and 

technical assistance workshops that these centers conducted across the 

country for faith-based and community organizations. 

Federal and state officials administering the 10 programs we examined 

told us that they do not treat FBOs any differently than other organizations

during the grant award process. They use standard criteria to assess all 

applications for grant funds, and grant reviewers do not necessarily know 

if applicants are FBOs because an organization is not generally required to

identify itself as an FBO when applying for funds. While the grant award 

process was similar for all organizations in the competitive programs we 

reviewed, since the beginning of the initiative, agencies have awarded over 

$500 million through new competitive grant programs to provide training 

and technical assistance to faith-based and community organizations and 

to increase the participation of these organizations in providing federally 

funded social services. In its fiscal year 2007 budget request, the 

Administration requested increased funding for some of these programs. 

Agencies Use Same 

Grant Award 

Procedures for FaithBased as Other 

Organizations, and 

Some New Grant 

Programs Established 

to Encourage More 

Faith-Based and 

Community 

Organization 

Participation 

 28HHS spent $310,000 on rent, communications, and utilities in fiscal year 2005; HUD spent 

$10,400 in fiscal year 2005 for the same services. 

Page 22 GAO-06-616 Faith-Based and Community Initiative
In the funding programs we examined, federal regulations require federal

and state agencies to use the same processes to evaluate grant 

applications from FBOs as they do applications from other organizations.29

When rating each application, reviewers for these programs used standard 

criteria and assigned numerical scores or other ratings to assess how well 

an application addressed the criteria.

30 Funding decisions are primarily 

determined by these rating scores, although other factors, such as 

geographical dispersion, may be taken into account. For example, 

selection criteria used to evaluate applications in one program included 

factors such as the quality of the project design, quality of project 

personnel, and quality of the project evaluation, with points assigned to 

each criterion. None of the programs we reviewed awarded points 

specifically for faith-based organizations. One of the programs in our 

review, Education’s Mentoring Program, awarded five points to “novice” 

organizations applying for mentoring funds in 2002. Novice organizations 

were defined as ones that had never received a grant from the program 

before and had not received a discretionary grant from any federal 

program for 5 years.31 (See table 3 for a listing of the programs covered in

our review.) 

Faith-Based Organizations 

Compete for Funds on the 

Same Basis as Other 

Organizations 

 29For a discussion of Education’s Office of Innovation and Improvement’s grant award 

process, see GAO, Discretionary Grants: Further Tightening of Education’s Procedures

for Making Awards Could Improve Transparency and Accountability, GAO-06-268 

(Washington, D.C., Feb. 21, 2006). This review sampled all the grants in Education’s Office 

of Innovation and Improvement and found that Education generally adhered to its policies 

regarding competitions. 

30One of the programs we reviewed was a contracting program in which federal officials 

review applications/bids—for the purposes of our discussion we treat it the same as the 

other programs. The competitive process used by Justice’s Bureau of Prisons to award

community corrections contracts involves a selection board whose members rate 

proposals submitted by bidders on specific factors; bidders whose proposals receive the 

highest scores are awarded contracts. The equal treatment safeguards apply to contracts as

well as direct competitive and formula grant programs. 

31In Education’s 2004 Mentoring Program grant notice, the department announced that five 

points would be awarded to a consortium of eligible applicants that included local 

educational agencies, community-based organizations, or one private school that qualified 

as a nonprofit community-based organization.

Page 23 GAO-06-616 Faith-Based and Community Initiative
Table 3: Selected Federal Programs Providing Funding to Various Organizations, Including Faith-Based Organizations 

Program Agency Type of funding Purpose of program

Mentoring Programs (Safe and 

Drug-Free Schools and 

Communities National Programs) 

Education Project grants To promote mentoring programs for children of 

greatest need 

Community-Based Abstinence 

Education Program a

HHS Project grants To provide funding to public and private institutions 

for community-based abstinence education project 

grants 

Mentoring Children of Prisoners 

Program 

HHS Project grants To award grants to organizations, including 

community and faith-based entities, to provide 

children of incarcerated parents with mentors

Microenterprise Development

Program (Refugee and Entrant 

Assistance Discretionary Grants) 

HHS Project grants To assist refugees in starting or expanding very 

small businesses 

Abstinence Education Program HHS Formula grant program To enable states to provide abstinence education 

and mentoring, counseling, and adult supervision to 

promote abstinence from sexual activity 

Substance Abuse Prevention and 

Treatment Block Grant 

HHS Formula grant program To provide financial assistance to states and

territories to support projects for the development 

and implementation of programs directed at the 

prevention and treatment of alcohol and drug abuse 

Continuum of Care (set of three 

programs: Supportive Housing

Program, Shelter Plus Care, and 

Single Room Occupancy) 

HUD Project grants To address the problems of homelessness in a 

comprehensive manner 

Emergency Shelter Grants 

Program 

HUD Formula grant program To improve the quality of emergency shelters and 

transitional housing for the homeless, to make

additional shelters available, and to provide services 

to the homeless 

Community Corrections Contracting Justice Competitive procurement

program 

To provide assistance to inmates who are near 

release and provide a structured, supervised 

environment and counseling, job placement, and 

other services 

Small Grassroots Faith-Based and 

Community-Based Organizations 

Connecting with the One-Stop

Delivery System (Small Grassroots 

Program) 

Labor Project grants To expand the access of faith-based and 

community-based organizations’ clients and 

customers to the services offered by local one-stop 

centers 

Source: GAO analysis based on agency information. 

a

In 2005, the Community-Based Education Program was moved from HHS’s Health Resources and 

Services Administration to HHS’s Administration for Children and Families.

Page 24 GAO-06-616 Faith-Based and Community Initiative
Because applicants in most programs we examined are not required to 

identify themselves as FBOs, the grant reviewers do not necessarily know 

whether an applicant is an FBO.32 A voluntary survey that may be 

submitted with the standard federal grant application asks the applicant,

among other things, to self-identify whether it is a faith-based/religious 

organization or whether it is a nonreligious community-based 

organization. However, federal officials told us that this survey, if 

submitted by the applicant, is removed from the application, and is 

unavailable to the reviewers. Nonetheless, an organization’s identity might 

be reflected in its name, or the organization might disclose its identity in 

its application, for example, when describing the history or mission of the 

organization.

New Programs Established 

since Initiative to Provide 

Training and Technical 

Assistance to Faith-Based 

and Community 

Organizations and Increase 

Faith-Based and 

Community Organization 

Participation 

In four of the agencies we reviewed, new programs have been created to

provide training and technical assistance to faith-based and community 

organizations and to increase the participation of these organizations in 

providing federally funded social services. Some of these programs are the 

pilot programs established by the centers and program offices in response 

to the initiative. Between fiscal years 2002 and 2005, over $500 million in

competitive grants has been awarded through these programs.33 Some of 

these programs, such as Labor’s Prisoner Reentry Initiative, limit eligibility 

to faith-based and community organizations, while others, such as HHS’s 

Compassion Capital Fund Demonstration Program, fund intermediary 

organizations that provide capacity-building assistance to faith-based and 

community organizations. (See table 4 for a list and description of these 

programs.) 

 32The applications for the Continuum of Care programs ask a yes/no question on whether 

the applicant is a religious or a religiously affiliated organization. 

33Funds awarded in fiscal year 2006 were not included because several agencies had not

made grant awards for fiscal year 2006 at the time of our review. 

Page 25 GAO-06-616 Faith-Based and Community Initiative
Table 4: New Grant Programs Intended to Encourage Faith-Based and Community Organization Participation in Federally 

Funded Social Efforts

Program Agency

Start date 

of program

Total funds

awarded through 

fiscal year 2005

Grantee/subgrantee 

eligibility Grant purpose

Access to 

Recoverya

Health and 

Human 

Services 

2004 $198,000,000 States, District of 

Columbia, territories, 

and tribal organizations 

To provide client choice among 

substance abuse treatment and 

support service providers, expand 

access to an array of treatment and 

recovery support options, and 

increase substance abuse treatment 

capacity. 

Compassion

Capital Fund 

(CCF) 

Demonstration 

Grantsa

Health and 

Human 

Services 

2002 $125,594,965 Nongovernmental

organizations; Indian 

tribal governmental 

organizations; nonprofit 

agencies, including 

faith-based 

organizations, public 

agencies, state and 

local governments, 

colleges and 

universities, and forprofit entities 

To help smaller organizations

manage their programs effectively, 

access funding, train staff, expand 

programs in their communities, and 

replicate promising programs.

Intermediary organizations receiving 

CCF grants also provide subawards 

to a diverse range of faith-based and 

community organizations. 

Mentoring 

Children of 

Prisonersa

Health and 

Human 

Services 

2003 $100,047,432 States, localities,

private, nonprofit, 

community and faithbased entities, and 

coordinated networks of 

such entities 

To support the establishment or 

expansion and operation of 

programs to provide mentoring

services for children of incarcerated 

parents. 

Compassion

Capital Fund 

Targeted 

Capacity-Building 

Programa

Health and 

Human 

Services 

2003 $22,587,556 Nonprofit, faith-based,

and community

organizations 

To increase the capacity of faithbased and community organizations 

with a proven track record of serving 

the needs of at-risk or low-income 

individuals and families. 

Ready4Worka Labor/Justice 2003 $21,700,000 Public/Private Ventures 

(non-profit organization) 

provides subgrants to 

lead agencies at 

18 sites 

To assist faith-based and community 

programs that provide mentoring 

and other transition services for men 

and women returning from prison. 

Prisoner Reentry 

Initiativea

Labor/Justice/

HUDb

2005 $19,840,000 Faith-based and 

community 

organizations 

To reduce recidivism and reincarceration by helping inmates find 

work when they return to their

communities. 

Grants for States 

for FBO/ 

Community-Based

Organization 

Partnerships 

Labor 2002 $11,874,147 States To increase the number of faithbased and community-based

organizations serving as committed 

and active partners in the One-Stop 

delivery system. 

Page 26 GAO-06-616 Faith-Based and Community Initiative
Program Agency

Start date 

of program

Total funds

awarded through 

fiscal year 2005

Grantee/subgrantee 

eligibility Grant purpose

Grants for 

Workforce 

Investment Boards 

for FBO/ 

Community-Based

Organization 

Partnershipsa

Labor 2004 $10,706,389 Workforce Investment 

Boards 

To encourage the formation of longterm partnerships with faith-based 

and community organizations that 

meet community needs related to 

hard-to-serve populations. 

Grants for 

Intermediaries for 

FBO/CommunityBased 

Organization 

Partnerships 

Labor 2002 $9,661,191 Nonprofit, community, 

or faith-based 

organizations with 

connections to faithbased and community 

grassroots 

organizations 

To increase the number of faithbased and community-based

organizations serving as committed 

and active partners in the One-Stop 

delivery system. 

Helping Outreach 

Programs Expand 

(HOPE) 

Justice 2002 $3,675,000 Faith-based and 

community 

organizations 

To foster the development of 

grassroots crime victim service 

providers to expand both public 

visibility and outreach to victims, 

thereby increasing the number of 

available service providers. 

Faith and 

Community-Based

Juvenile 

Delinquency 

Treatment 

Initiativea

Justice 2003 $3,500,000 One grant awarded to 

Florida Department of 

Juvenile Justice 

To establish a multifaceted faithbased initiative to provide positive, 

caring adult relationships, and

greater supervision and moral

leadership as youthful offenders 

transition back into their 

communities. 

Small Grassroots 

Faith-Based and 

Community-Based

Organizations 

Connecting with

the One-Stop 

Delivery System 

(Small Grassroots 

Program) a

Labor 2002 $3,408,981 Local nonprofit social 

service organizations 

with $350,000 or less in 

annual revenues or 

fewer than six 

employees 

To provide workforce services to 

specific populations or provide 

particular services not currently 

provided through the One-Stop

delivery system; expand the access 

of faith-based and community-based

organizations’ clients and customers 

to the services offered by the local 

One-Stops; and establish methods 

and mechanisms to ensure 

sustainability of these partnerships. 

Helping Outreach 

Programs to 

Expand II (HOPE 

II) 

Justice 2005 $3,000,000 Faith-based and other 

community 

organizations that will 

provide subgrants to 

grassroots, faith-based, 

and community

organizations to serve 

crime victims while also 

building their capacity. 

To increase the development and 

capacity of faith-based or 

community-based organizations to 

respond to underserved victims in 

high-crime urban areas. 

Page 27 GAO-06-616 Faith-Based and Community Initiative
Program Agency

Start date 

of program

Total funds

awarded through 

fiscal year 2005

Grantee/subgrantee 

eligibility Grant purpose

Rural Domestic

Violence and Child 

Victimization 

Enforcement 

Grant Program

Special Initiative: 

Faith-based and 

Community 

Organization Pilot 

Programa

Justice 2005 $1,024,965 Community

organizations (nonprofit, 

private entities) of rural 

states and faith-based

organizations of rural 

states (nonprofit, private 

entities). Private entities 

of nonrural states that 

are members of or 

central offices of 

national organizations 

may consider applying 

through an affiliated 

organization located 

within a rural state.c

To increase the level of services 

available to rural victims of domestic 

violence by increasing the number of 

first-time, grassroots faith—and/or 

community-based organizations 

receiving Office of Violence Against 

Women funding and technical

assistance in rural America. 

Enhancement of 

Public Housing

HOPE VI 

Communities 

through Mentoring 

Demonstration 

Programa

HUD 2005 $524,578 Public housing

authorities with HOPE 

VI Revitalization grants 

will partner with

grassroots, faith-based 

and other communitybased organizations. 

To determine if providing mentoring 

services to residents already 

participating in self-sufficiency

programs increases their likelihood 

of achieving self-sufficiency. 

Clergy Against 

Senior Exploitation 

(CASE)a

Justice 2002 $273,614 One grant awarded to 

Denver, Colorado, 

district attorney’s office 

To partner with faith communities in 

addressing the issue of elder fraud 

in Denver County. 

Source: GAO analysis based on information on the White House Office of Faith-based and Community Initiatives Website and agency

documents. 

Note: This table does not include programs that provide only technical assistance and not grant funds 

to faith-based and community organizations, such as Education’s Supplemental Educational Services

and HUD’s Grant Writing Training program. 

a

Denotes a pilot program identified as such by Centers for Faith-Based and Community Initiatives 

staff. 

b

As of April 2006, Justice and HUD had not disbursed any funding under the initiative. 

c

Grantees act as intermediaries and offer subgrants and technical assistance to small, faith-based or 

community organizations with less than 10 full-time employees, an annual domestic violence budget 

less than $100,000, and an overall annual operating budget less than $350,000. 

The President proposes $323 million in funds in his 2007 budget 

submission—a 36 percent increase from what was enacted in fiscal year 

2006—for five programs in order to foster faith-based and community 

organization participation.34 The President’s budget proposes an increase 

 34Compassion Capital Fund, Access to Recovery, Mentoring Children of Prisoners, Prisoner 

Reentry Initiative, and the President’s HIV/AIDs Initative. 

Page 28 GAO-06-616 Faith-Based and Community Initiative
in funding for the Compassion Capital Fund from $64 million to 

$100 million and the Prisoner Re-entry Initiative funding from $26 million 

to $60 million. In an effort to encourage more participation by faith-based 

and community organizations in combating the spread of HIV and AIDS, 

the President proposed new funding for an outreach program to the 

African-American community. 

Most of the 10 federal program offices that we reviewed included an 

explicit statement in their grant documents explaining that FBOs cannot 

use direct federal funds for inherently religious activities 35 However, less 

than half of program offices provided a similar statement explaining that

organizations may not discriminate against beneficiaries based on religion

or explaining the permissible hiring practices for FBOs. Most of the grant 

documents related to these two safeguards provided only a reference to 

federal or program regulations, and a few program offices provided no 

information on the nondiscrimination and hiring safeguards. In general, 

state and county offices in the four states we visited provided information 

on the safeguards to their formula grant awardees, although in several 

cases they provided incorrect information on whether FBOs may make 

hiring decisions on the basis of religion. While officials in all 26 of the 

FBOs that we visited told us that they understood that federal funds could 

not be used for inherently religious activities, officials at several 

organizations appeared to have misunderstood the safeguard that religious 

activities may only be conducted at a separate time or in a separate 

location from federally funded services. Few government agencies 

administering the programs we reviewed monitor organizations to ensure 

compliance with these safeguards, and the single audit, which is used to 

monitor organizations receiving a certain level of federal funding, 

generally does not include checks for these safeguards. 

Government Agencies 

Generally Provide

Grantees with 

Information on 

Safeguards, but Most 

Do Not Have 

Procedures in Their 

Monitoring Guidelines 

for Assessing 

Compliance 

 35We reviewed a program’s latest grant announcement and grant application for references

to the safeguards on inherently religious activities, nondiscrimination of program 

beneficiaries, and FBOs’ permissible hiring practices. We also requested from agency 

officials any additional guidance that they provided to applicants or grantees related to the 

use of grant dollars. 

Page 29 GAO-06-616 Faith-Based and Community Initiative
Seven of the 10 programs that we reviewed provided grantees with an 

explicit statement in one or more of their grant documents that federal 

funds for that program could not be expended for “inherently religious 

activities.” Most statements noted that organizations receiving direct 

federal funds cannot engage in inherently religious activities, such as 

worship, religious instruction, or proselytization as part of program 

services directly funded with federal funds. For example, Labor sent state 

workforce agencies a guidance letter in July 2005 reiterating its equal 

treatment rules and directing the agencies to develop policies and 

procedures to implement the safeguards. HUD also issued a memorandum 

to state agencies reiterating its equal treatment rules pertaining to 

Emergency Shelter program grantees. Table 5 summarizes the extent to

which information on each of the safeguards was included in programs’ 

grant documents. 

Most of the Federal 

Programs We Reviewed 

Provided Grantees with a 

Statement on 

Nonallowable Activities, 

but Fewer Provided 

Information on Other 

Safeguards 

Page 30 GAO-06-616 Faith-Based and Community Initiative
Table 5: Extent to Which Safeguards Are Included in Program Grant Documents 

Safeguards stated In federal 

documents to granteea

Prohibition on inherently religious

activities unless separate in time 

or location from federally funded 

programs or services 

Prohibition on

discrimination against 

clients based on religion

Provision explaining 

permissible hiring by

FBOs

Agency/program 

Federal Project and Contract Grants 

Education/Mentoring Programs ● ● ●

HHS/Community- Based Abstinence 

Education Programb ■ ● ●

HHS/Mentoring Children Of Prisoners ■ ● ●

HHS/Microenterprise Development 

Program ■ □ □

HUD/Continuum of Care Programc■ ■ ■

Justice/Community Corrections 

Contracting 

d

● ●

Labor/Small Grassroots Program ■ ■ ■

Formula Grants

HHS/Abstinence Education Program ■ ■ □

HHS/Substance Abuse Prevention and 

Treatment Block Grant Program ● ● ●

HUD/Emergency Shelter Grants ■ ■ ■

Key: document

■ = provides statement in one or more of the following documents: grant application, announcement,

or guidance documents 

● = cites regulations 

□ = makes no reference to these safeguards

Source: GAO analysis based on review of agency documents. 

a

Documents include grant announcements, applications, award letters, and any additional guidance 

sent to grantees.

b

Safeguards were stated more clearly in HHS’s Health Resources and Services Administration’s 2003

and 2004 applications, which included an advisory memo and a questions and answers section. 

Advisory and question section was not included in HHS’s Administration for Children and Families’

2006 application package. However, the program’s application and grant award letter include a 

reference to the prohibition on inherently religious activities. 

c

HUD’s notice to agency and field office directors providing guidance to Continuum of Care grantees

covered by HUD’s 2003 equal treatment regulations expired September 2005. 

d

Justice officials told us that this safeguard does not apply to Community Correction Contracting 

programs and therefore the agency did not include it in the program’s contract documents. See

discussion below. 

Page 31 GAO-06-616 Faith-Based and Community Initiative
We found no reference to the prohibition on inherently religious activities 

in Justice’s Community Corrections Contracting program.36 Justice 

officials advised us that, under their equal treatment regulations, they 

believe that FBOs providing services in Community Corrections Centers 

(also referred to as halfway houses that allow inmates to leave the centers 

for religious services) are exempt from the prohibition related to 

inherently religious activities and therefore the agency does not include 

any reference to the prohibition in the contract documents for this 

program. The regulations provide that the restrictions on inherently 

religious activities do not apply where funds are provided to chaplains or

organizations assisting chaplains in certain settings such as community 

correction centers.37 According to these officials, given the duty to 

accommodate inmates’ rights to religious exercise, all FBOs providing 

services are essentially viewed as “assisting chaplains” and fall within the 

exception. Accordingly, Justice officials believe it is appropriate not to 

include any reference to the restriction on inherently religious activities in

the contract documents for community correction centers. 

We believe that the failure by Justice to include any reference to this 

restriction could create uncertainty for FBOs. For example, the omission 

could be read as allowing all providers of social services in these settings 

to engage in worship, religious instruction, or proselytization, regardless 

of whether the services assist chaplains or whether the religious activities 

are voluntary on the part of the participant. In other words, the scope of 

the exception for assisting chaplains is left uncertain and FBO program 

staff may not understand whether, to what extent, or under what 

circumstances, they may engage in religious activities using federal funds.

As table 5 shows, 4 of the 10 programs that we reviewed included an 

explicit statement in grant documents that grantees must not discriminate 

against beneficiaries on the basis of their religion. In contrast, most of the 

other programs refer applicants and grantees to either their agency’s equal 

treatment regulations or program regulations that contain this safeguard. 

For example, HHS’s Community-Based Abstinence Education program 

 36Community Corrections Contracting includes both Community Corrections Centers and 

Comprehensive Sanctions Centers. Bureau of Prison officials told us that while the 

Comprehensive Sanctions Centers have a more structured system for granting inmates 

access to the community, the process of contracting for and monitoring of these two 

programs is the same. Our interviews with FBOs included one that operated a Community 

Corrections Center and another that operated a Comprehensive Sanctions Center. 

37See 28 C.F.R. 38.1(b)(2). 

Page 32 GAO-06-616 Faith-Based and Community Initiative
refers the applicant to the agency’s equal treatment regulations,and 

SAMHSA’s Substance Abuse Prevention and Treatment Block Grant 

Program refers states to its charitable choice regulations. The Mentoring 

Children of Prisoners Program added a reference to HHS’s equal treatment 

regulation in its June 2006 announcement. However, we found that in 

some instances, the cited regulations contained out-of-date information on 

this safeguard. For example, HHS’s Mentoring Children of Prisoners and 

Microenterprise Development Programs’ Standard Terms and Conditions 

(attached to the grant award) cited a Web address for 2003 regulations that 

did not contain the equal treatment safeguards. 

Programs provided the least information on whether FBOs are permitted 

to make hiring decisions based on religion. Of the 10 federal program 

offices that we reviewed, only 3 provided information in grant documents 

about religious organizations’ hiring of employees that share their religious 

beliefs. Five other programs referred applicants or grantees to the equal 

treatment regulations, and 2 provided no reference to FBO hiring in their 

grant documents. In addition, Justice’s contract for its Community 

Correction Centers contains a reference to a clause that cites an executive 

order that does not apply to FBO contractors and thus provides incorrect 

information on FBO hiring.38 The one program in our review—Labor’s 

Small Grassroots Program—that is governed by statutory language

prohibiting FBOs from making employment decisions on religious 

grounds, includes information in its program grant documents explaining

the prohibition.39

The 7 competitive project and procurement grant programs differed with 

respect to whether they provided any training for new grantees on the 

safeguards. Five program offices provided training to grantees that 

included a discussion of the safeguards, while two did not. Officials from 

2 of the formula grant programs in our review explained how some state 

officials received training on the safeguards. An HHS official with the 

Abstinence Education formula grant program told us that state officials 

attended the February 2006 conference offered to new grantees for the 

 38Executive Order 13279 amends section 202 of Executive Order 11246 so that the 

prohibition on religious hiring does not pertain to a government contractor or 

subcontractor that is, among other entities, a religious corporation. 

39Labor’s Small Grassroots Program is governed by statutory language prohibiting FBOs 

from making employment decisions on religious grounds for positions that administer or

are connected with the program or activities that receive Workforce Investment Act 

assistance. 

Page 33 GAO-06-616 Faith-Based and Community Initiative
Community-Based Abstinence program and were given the opportunity to 

attend breakout sessions that focus on compliance with the equal 

treatment safeguards. SAMHSA officials told us that they hold sessions 

during the semiannual conference that directly discuss charitable choice 

regulations. Applicants and grantees interested in learning about the 

safeguards could also obtain access information on an agency’s Center for 

Faith-Based and Community Initiatives Web sites. 

For the three formula grant programs we reviewed, the grant program 

documents that state and county agencies provide to applicants and 

grantees contain information on allowable activities and 

nondiscrimination of beneficiaries and, in general, provide more explicit 

information on these two safeguards than the federal agencies. In addition, 

like federal program offices, state and county program offices in the four 

states we visited provided little information on FBO hiring, or in several 

cases, provided incorrect information. For example, we found that state 

and county offices in two states that administer the Substance Abuse 

Prevention and Treatment Block Grant and Abstinence Education 

program provided documents to grantees that included incorrect 

information on whether FBOs could hire based on religion. In one case, 

county officials acknowledged that they provided documents that 

contradicted one another on FBO hiring. They explained that one 

provision of their state contract says that organizations cannot 

discriminate in hiring, while another provision cites charitable choice 

hiring rules. 

Four of the 13 FBOs that we visited that provided voluntary religious 

activities for beneficiaries did not appear to adhere to the requirement to 

separate in time or location religious activities from program services 

funded with direct federal funds. In addition, 13 of the 26 did not 

understand the safeguard that pertained to permissible hiring on the basis 

of religion. On the basis of our discussions with FBO officials, we did not 

find any indications that FBOs did not serve a beneficiary based on a 

beneficiary’s religious beliefs. 

While officials in all 26 FBOs that we visited told us that they understood 

the prohibition on providing inherently religious activities with direct 

federal funds, 4 described engaging in activities that appear not to be 

permissible with federal funds under the equal treatment rules. For 

example, officials from 2 of these FBOs told us that that they would pray 

with beneficiaries at the beneficiary’s request. While voluntary prayer is 

State and County Agencies 

Provide Grantees 

Information on Allowable 

Activities and 

Nondiscrimination of 

Clients, but Several

Provided Grantees with 

Incorrect Information on 

FBO Hiring 

Some FBOs We Visited Did 

Not Appear to Understand 

the Requirement for 

Separation in Time or 

Location for Religious 

Activities and the 

Safeguard Pertaining to 

Hiring by Religious 

Organizations 

Page 34 GAO-06-616 Faith-Based and Community Initiative
permissible as long as it is offered separately in time or location from 

program activities conducted with direct federal funds, these officials 

indicated that they conducted prayer at the same time and location as 

their federally funded services.40 In addition, an official from another FBO 

said that he began each program session, which provided services to 

children, with a nonsectarian prayer that at times included a brief reading 

from the Bible. Finally, one FBO program manager told us that she 

discussed religious issues during the same time and at the same location 

as federally funded services if requested by a participant and no other 

participants objected. 

One program office has taken action to better define the separate in time 

or location requirement. Included as part of the settlement of a lawsuit 

that arose from the agency’s funding of a faith-based sexual abstinence 

education program was a set of “Safeguards Required” drafted by HHS’s 

Community-Based Abstinence Education Program office for the grantee. 

This document was intended to provide guidance to the grantee for 

operation of the program in compliance with existing law and regulations, 

and included a detailed explanation of ways in which the grantee’s 

activities might be separated in time or location. As of March 2006, HHS 

was considering providing similar information to all grantees to more 

clearly delineate how an organization could separate its religious activities 

from those provided with federal funds, according to the abstinence 

education program director. 

Some FBOs are also confused about the safeguard related to hiring by 

religious organizations. Only half of the 26 FBOs that we visited correctly

understood whether they could take religion into account when hiring 

staff. In general, FBOs that were prohibited by program legislation or state 

law from considering religion when making employment decisions 

understood the hiring safeguard. For example, 8 of the 9 FBOs that we 

visited in Ohio understood that the state had a statute that prohibits 

discrimination in employment based on religion.41 In addition, Labor’s 

Small Grassroots Program is governed by statutory language that prohibits

 40The preambles to most agencies’ published equal treatment regulations note that while 

the Supreme Court has not comprehensively defined inherently religious activities, the 

Court considers prayer and worship to be inherently religious. See, for example, the

Department of Justice’s final rule at 69 Fed. Reg. 2832, 2834. 

41See Ohio Rev. Code Ann. sec. 4112.02 (2006). The Ohio statute does not specifically 

include an exemption for religious organizations. 

Page 35 GAO-06-616 Faith-Based and Community Initiative
organizations from hiring based on religion. Program officials with 3 FBOs 

that had received funding from this program told us that they do not hire 

based on religion, and 2 of the 3 noted that the hiring safeguard was 

discussed during Labor’s grantee training. Most of the 13 FBOs that did not 

correctly understand the hiring safeguard were unaware that they could

consider religion when making employment decisions. 

Program Offices Are Not 

Required to Monitor FBO 

Grantees Differently than 

Other Grantees, and Few 

Program Offices in our 

Review Include References 

in their Monitoring 

Guidelines on Compliance 

With Safeguards 

Federal and state program offices are not required under federal 

requirements to monitor FBO grantees any differently than secular 

organizations, and in our review, few program offices use monitoring tools 

that include checks for compliance with these safeguards. Federal 

agencies monitor grantees for compliance with program regulations 

primarily through such monitoring activities as desk audits, site visits, and 

single audit compliance reviews. However, many faith-based and 

community organizations may not be covered by the single audit because 

they do not expend $500,000 or more in federal funds in a given year. 

Further, for those FBOs that do meet this financial threshold, single audit 

guidelines do not generally instruct auditors to check for compliance with

the equal treatment safeguards. 

Federal program offices monitor grantees by reviewing financial reports 

(standard reports that collect data on grantee disbursements) and 

performance reports that grantees submit. Program officials told us that 

they review these reports to identify any financial or programmatic issues 

that may require them to do additional follow-up with the grantees. 

Performance reports focus on programmatic issues and collect 

information on the number of beneficiaries served and program outputs. 

None of the reports that we reviewed contained any questions related to 

compliance with the safeguards. 

Program Offices Monitor 

Grantees Primarily through 

Desk Audits and Site Visits 

Program offices also monitor grantees for compliance with program rules 

through site visits. Many federal officials told us that they use a risk-based 

approach when determining which sites to visit. Several program officials 

told us that they do not single out FBOs for site visits and do not consider 

them at higher risk for noncompliance than other organizations. Grantees 

often selected for visits include ones that receive high dollar grants, novice 

grantees, grantees that have had prior problems, and grantees with high 

staff turnover. Program officials typically use written monitoring 

guidelines or site visit protocols when conducting site visits. 

We found that only 2 of the 7 federal direct programs had monitoring 

guidelines that contained any reference to the equal treatment safeguards, 

Page 36 GAO-06-616 Faith-Based and Community Initiative
and one program—established in 2002—had not yet developed a 

monitoring tool. HHS’s Community-Based Abstinence Education Program 

recently developed a monitoring tool that includes a question on whether 

the project is being implemented “in a manner consistent with all other 

Federal requirements (e.g., faith-based issues, civil rights, etc.)” and 

whether the grantee is “aware of the regulations regarding the use of 

federal funding for inherently religious activities.” Similarly, Labor’s 

monitoring handbook contains a general reference to avoiding client

discrimination, but does not include a discussion of compliance with the 

safeguards. An HHS Mentoring Children of Prisoners program official told 

us that the program office had not yet developed a monitoring tool for its 

mentoring program. 

The number of site visits conducted by program offices varied widely. 

Officials noted that the number of grantees in a given program affects how 

frequently their staff can conduct site visits. A Labor official in a field 

office told us that Labor officials try to visit all Small Grassroots Program 

grantees at least once during the span of the grant. HUD officials noted 

that visiting 10 percent of all grantees annually amounted to about 600 

visits in 2004, and an Education official noted that visiting 5 percent of 

grantees had become increasingly difficult as the number of grantees grew

each year. Since its move to HHS’s Administration for Children and 

Families from the agency’s Health Resources and Services Administration

in 2005, the Community-based Abstinence Education program has 

conducted two site visits. The program’s director said he hopes his office 

will complete around 20 in 2006, but that he would like to visit all grantees 

at least once during their 3-year grant period.42

State and county agencies are responsible for monitoring grantees of 

federal formula grants. Similar to federal agencies, state and county 

officials in the four states we visited conduct desk audits of grantees and 

conduct site visits to a limited number of organizations. Many use risk 

assessment to determine which grantees to visit while others attempt to 

visit all grantees within a certain time frame. Only 5 of the 13 state or 

county program offices we visited included a reference to the prohibition

on using direct federal funds for inherently religious activities or services. 

Georgia’s monitoring tool for its Emergency Shelter Grants program states 

that housing and services are to be provided in a “manner that is free from 

 42According to Health Resources and Services Administration officials, their office did not

conduct any site visits during the 4 years they administered the program. 

Page 37 GAO-06-616 Faith-Based and Community Initiative
religious influence,” and its abstinence education performance and 

outcome scorecard has a space for organizations to indicate that their 

“curriculum does not teach or promote religion.” Similarly, Texas’ 

abstinence education on-site evaluation report includes as one of its 

review criteria a check to ensure that direct federal funds are not used for 

sectarian worship, instruction, or proselytization. In addition, the 

monitoring manual for Sacramento County, California, includes a check to 

ensure that grantees include in their program policies and procedures 

information on the requirement that FBOs certify that they will comply 

with all the requirements of SAMHSA’s charitable choice provisions and 

implementing regulations. 

Program offices also use the single audit to monitor recipients that expend

$500,000 or more in federal funds in a fiscal year. OMB provides specific 

audit guidelines for some programs. While three programs we reviewed—

the Substance Abuse Prevention and Treatment Block Grant Program, 

Emergency Shelter Grants, and the Continuum of Care Supportive 

Housing Program—have program-specific guidance, they varied on 

whether and how they included information on the equal treatment 

regulations.43 For example, single audit guidance for the Substance Abuse 

Prevention and Treatment Block Grant Program provided the auditor with 

audit steps related to the equal treatment provision prohibiting 

organizations from expending direct federal funds on inherently religious 

activities, while Emergency Shelter Grant guidance refers the auditor to 

the program regulations that discuss what faith-based organizations can 

and cannot do with direct federal funds. In contrast, the single audit 

guidance on HUD’s Supportive Housing Program contains no reference to 

the prohibition on using direct federal funds for inherently religious 

activities. 

Single Audits Are Also Used to 

Monitor Grantees, but 

Guidelines Do Not Consistently 

Reference Safeguards 

The other 7 programs we reviewed do not have OMB program-specific 

audit guidelines. OMB’s single audit guidelines used for programs that do 

not have program-specific guidelines also contain no reference to the 

prohibition on using direct federal funds for inherently religious activities. 

Instead, OMB’s general guidelines direct auditors to refer to grant 

documents or laws and regulations to determine which activities are 

 43We also reviewed all the programs cited in the White House Faith-Based and Community 

Initiatives Report Grants to Faith-Based Organizations FY 2004 to ascertain how many of

these programs had program-specific single-audit compliance guidelines. Out of the 

81 programs that are administered by the five agencies in our review, we found that 12 had 

program-specific guidelines. 

Page 38 GAO-06-616 Faith-Based and Community Initiative
allowed or unallowed with federal funds. We interviewed three 

independent auditors, who told us that unless these safeguards were 

referenced in the single audit guidelines or included in grant documents—

which typically outline the key provisions of the grant—an auditor would 

not likely test for compliance with these provisions. Two auditors we 

interviewed noted that they did not check for the safeguards because the

safeguards were not referenced in the single audit guidelines for HUD’s 

Continuum of Care and, at that time, SAMHSA’s Substance Abuse 

Prevention and Treatment Block Grant Program, the two programs 

administered by the FBOs they audited. The other auditor, who had 

recently audited an FBO that had received an Abstinence Education grant,

told us that he had developed his own audit plan by reviewing the grant

application package. He explained that because he readily found a 

reference in the application to the prohibition on providing inherently 

religious activities, he was able to discuss with the program manager how 

this issue was conveyed to program staff and reviewed written feedback 

from the students to ascertain whether any religious discussions had 

occurred while staff were providing federally funded services.

44

 44The auditor did not find any indication that the FBO had violated the prohibition on 

inherently religious activities. 

Page 39 GAO-06-616 Faith-Based and Community Initiative
OMB and the White House Office of Faith-Based and Community 

Initiatives (WHOFBCI) assess agencies’ progress in implementing the 

initiative and highlight this progress through a number of published 

vehicles.45 However, the federal government’s efforts to assess the 

initiative’s progress in achieving its long-term goal of greater participation 

may be hindered by the accuracy of data collected on the number of FBOs 

receiving federal grants because the government has not established 

consistently applied criteria for what constitutes a faith-based organization

and has not required organizations to self-identify as such. Moreover, little 

information is available to assess agencies’ progress toward the long-term 

goal of improving participant outcomes because outcome-based 

evaluations for most pilot programs have not yet been completed. In 

addition, OMB faces other challenges in measuring and reporting on 

agencies’ progress in meeting the two long-term goals of the initiative. 

Through the President’s Management Agenda (PMA) issued in 2001, OMB 

identified expected short-term, intermediate, and long-term results or 

goals for the initiative.46 OMB and WHOFBCI assess and track agencies’ 

implementation of the initiative by using the Executive Branch

Management Scorecard, a traffic-light system showing agencies’ grades on

their efforts to carry out activities in accordance with the initiative’s 

Standards for Success. Developed in 2003, the initiative’s Standards for 

Success describe expectations on the progress agencies are making in 

implementing certain responsibilities for the initiative, such as collecting 

accurate data on the participation of faith-based and community 

organizations and conducting outcome-based evaluations of pilot 

programs. Center officials at the agencies that we reviewed told us that 

they are focusing their efforts on implementing the standards for success 

and achieving the short-term goals of the initiative. Specifically, they are 

working on “leveling the playing field” for faith-based and community 

OMB and WHOFBCI 

Assess Agencies’ 

Progress in 

Implementing 

Initiative, but Data 

Limitations and a 

Lack of Information 

May Hinder Ability to 

Measure Progress 

toward Achieving 

Initiative’s Long-Term 

Goals 

OMB and WHOFBCI Grade 

Agencies’ Progress in 

Implementing the Initiative 

by Assessing Their 

Progress on Several 

Activities

 45In May 2006, OMB published on its Web site the Standards for Success used to gauge the 

progress agencies are making in implementing the initiative.

46Through the PMA, OMB has emphasized improving government performance through five

governmentwide goals and a number of agency-specific initiatives, one of which is the 

Faith-Based and Community Initiative. 

Page 40 GAO-06-616 Faith-Based and Community Initiative
organizations to compete for federal funds. Table 6 specifies OMB’s green 

and yellow standards for success for the initiative, and appendix III lists 

the best practices that are referenced in the Standards for Success. 

Table 6: OMB’s Green and Yellow Standards for Success for Executive Agencies with Centers for the Faith-Based and

Community Initiative 

GREEN Standards for Success 

Agency: 

1. Has implemented a comprehensive outreach and technical assistance strategy for enhancing opportunities of faith-based and 

community organizations (FBCO) to compete for federal funding, including working with state and local officials to expand access to 

Federal funding awarded through them. This strategy employs 12 of 15 best practices; 

2. Regularly monitors compliance with the equal treatment regulations at the State and local levels, promptly addresses violations

once they are detected, and has a process in place to ensure that compliance information is used to inform future funding. 

Compliance monitoring activities include 10 of 13 best practices;a

3. Collects accurate and timely data on participation of FBCO and other applicants, including government entities, in selected Federal 

non-formula grant programs and has taken steps to expand data collection efforts to formula grant programs and make them a 

routine part of program administration. Programs are working to make this information accessible to the public; 

4. Implements pilot programs to strengthen the partnership between FBCO and the Federal government to deliver services and inform 

implementation of the Initiative, and expands the use of pilots to test new strategies when appropriate; AND 

5. Undertakes outcome-based evaluations of its pilot programs where FBCO participate, provides quarterly progress reports and 

interim results to the WHOFBCI throughout the life of the program, and builds an evaluation component into new pilots. 

Incorporated FBCO component into broader program evaluations when appropriate. 

YELLOW Standards for Success 

1. Has developed a comprehensive outreach and technical assistance strategy for enhancing opportunities of faith-based and 

community organizations (FBCO) to compete for federal funding, including working with state and local officials to expand access to 

Federal funding awarded through them, and has begun to implement the plan. This strategy employs 8 of 15 best practices; 

2. Has taken steps to ensure barrier free access for FBCO to the Federal competitive grants process. These steps include 7 of 

15 best practices; 

3. Has established procedures to collect data on participation of FBCO in selected Federal programs; 

4. Has implemented pilot programs to strengthen the partnership between FBCO and the Federal government to deliver services; 

AND 

5. Has undertaken outcome-based evaluations of its first set of pilot programs and has provided progress reports to WHOFBCI. 

Source: OMB. 

a For compliance monitoring activities, only 3 of the best practices pertain to monitoring whereas the 

other 10 best practices involve activities to inform faith-based and community organizations, state and 

local officials, and others about the regulations. 

OMB and WHOFBCI grade agencies both on current status and on 

progress in implementation. OMB and WHOFBCI award an agency with a 

green status if it meets all of the yellow and green standards for success, 

yellow if it has achieved the yellow but not all of the green standards for 

success, and red if the agency fails to meet any one of the yellow 

standards. OMB and WHOFBCI assess each agency’s progress on a 

Page 41 GAO-06-616 Faith-Based and Community Initiative
quarterly basis, and according to OMB officials, they use this performance 

information to identify problems and to develop corrective actions. 

Of the five agencies that we reviewed, three agencies have a green status 

(Education, Justice, and HUD), and two have a yellow status (Labor and 

HHS) for current status during the first 2006 rating quarter. These agencies 

received a green status for progress in implementation for the rating 

quarter except HUD, which was downgraded to a yellow status from the 

previous rating quarter. OMB and agencies publish these summary scores 

in a number of places, such as in OMB and agency budget and 

performance documents as well as on their respective Web sites. 

According to OMB and some center officials, OMB negotiates with the 

agencies on a quarterly basis to set milestones that agencies must meet to 

maintain their green status. 

The OMB Web site contains the Standards for Success for achieving the 

PMA’s five governmentwide goals,47 as well as the standards for the 

initiative. It lists the agencies that have performed best in meeting the 

individual standards for success (i.e., getting to green) for the goals. 

Efforts to Measure 

Agencies’ Progress toward 

Achieving Initiative’s Longterm Goals Is Hindered by 

Data Limitations and Lack 

of Information 

Although OMB’s scorecard highlights agency progress in implementing the 

initiative, there are difficulties in assessing progress towards the two longterm goals for the initiative specified in the PMA. Efforts to assess the 

progress in achieving the initiative’s long-term goal of increasing 

participation of faith-based and community organizations is hindered in 

part by difficulties agencies encounter in attempting to determine whether 

or not an organization is faith-based. Further, assessing achievement 

toward the other long-term goal of improving participant outcomes is 

hindered because agencies have not completed most of the OMB-required 

outcome-based evaluations of their pilot programs. In addition to the 

issues already noted, OMB and the WHOFBCI face other challenges in

measuring and reporting on agencies’ progress in meeting the broad longterm goals of “greater participation of faith-based and community 

organizations” and “improved participant outcomes.” 

 47The five governmentwide goals under the PMA are (1) strategic management of human

capital, (2) competitive sourcing, (3) improved financial performance, (4) expanded 

electronic government, and (5) budget and performance integration. 

Page 42 GAO-06-616 Faith-Based and Community Initiative
As set forth in the PMA, one of the long-term goals of the initiative is for 

federal agencies to facilitate greater participation of faith-based and 

community organizations in providing federally funded social services. 

Although the Administration has not defined a “faith-based and community 

organization” or a “faith-based organization,” it directs the centers for 

faith-based and community initiatives to collect data on federal grants 

awarded to FBOs and community-based organizations. The WHOFBCI has 

published data on FBOs for all five agencies for fiscal years 2003-2005. In 

March 2006, the WHOFBCI reported that in fiscal year 2005 the federal 

government awarded, through seven federal agencies, more than 

$2.1 billion in competitive social service grants to FBOs—an increase of 

7 percent over the previous year. The WHOFBCI also reported that 

between fiscal years 2003 and 2005, grants to FBOs increased by 38

percent and funding increased by 21 percent. 

Data Issues Affect Efforts to 

Measure Progress of Agencies 

in Meeting Long-Term Goals 

The WHOFBCI’s report states that federal agencies make good-faith 

efforts to collect accurate data on grants awarded to FBOs, and we also 

found that agencies are making significant efforts to collect this data. 

However, they face constraints in collecting accurate data. Specifically, 

the government has not established criteria for what constitutes a faithbased organization that all federal agencies must use, and federal agencies 

do not require organizations to self-identify as faith-based. Although no 

method can ensure that all data collected are accurate, having consistently

applied criteria or requiring self-identification would provide greater 

assurance that agencies are collecting accurate data than the current 

method.48 In addition, the WHOFBCI has not reported on grants awarded 

to community-based organizations. Consequently, it is unclear whether the 

reported data provide policymakers with a sound basis to assess the 

progress of agencies in meeting the initiative’s long-term goal of increasing 

participation of faith-based and community organizations. 

As we’ve previously reported, a long-standing challenge for the federal 

government has been producing credible data on outcomes achieved 

through federal programs. Policymakers need credible data to make 

resource allocation decisions on what programs to fund. Concerns about 

 48Accuracy includes both validity and reliability. Validity means that we are measuring what 

we think we are measuring. Reliability is the likelihood that a measurement procedure will 

obtain the same results if repeated. Thus, reliable data would largely be free from random

error components. Without a single clear definition, there is the risk that individuals are 

using different definitions inconsistently to identify different organizations. Therefore, the

FBO data may not be valid or reliable. 

Page 43 GAO-06-616 Faith-Based and Community Initiative
the accuracy of the data collected on FBOs have previously been raised by 

others. For example, during a June 2005 House hearing on the centers for 

faith-based and community initiatives, two former officials from the 

WHOFBCI and a former HHS center director questioned the accuracy of 

the data.49 In short, they questioned the methods used to collect data on 

which organizations are faith-based and the credibility of the reported 

data. 

In 2001, the Administration noted that a lack of a standard definition for 

what constitutes a faith-based organization was an obstacle to federal 

agencies in determining how much federal funding FBOs receive.50

Without using consistently applied criteria across federal agencies or 

requiring organizations to self-identify, each center is responsible for 

determining which grantees in selected programs are faith-based. One 

vehicle the centers use for identifying FBOs is a voluntary survey that is 

sent to all grant applicants and which asks, among other questions, 

whether the applicant is a “faith-based/religious” organization. However, 

the extent to which applicants return the survey varies across the centers, 

and several center officials reported that the response rate for this survey 

has been low. 

In cases in which applicants do not complete the voluntary survey, 

agencies rely on other methods of identification, such as administrative 

reports, Web sites, and phone inquiries by center and program staff. 

Moreover, a variety of agency staff collects this data without consistently 

applied criteria. Some agencies rely on center officials to collect this data, 

while others rely on either program staff or contractors. For example, one 

center official said that because there is no established definition of an 

FBO, officials are careful not to direct the program office staff on what 

characteristics to look for when identifying these organizations. Such 

methods involve considerable work on the part of program and center 

officials and, in some cases, discretion in determining which organizations

are faith-based. Another document that collects information on 

organizations’ characteristics is OMB’s mandatory application for federal

 49For a discussion of congressional oversight of the Faith-Based and Community Initiative 

and data issues, see H.R. 1054 Authorizing Presidential Vision: Making Permanent the 

Efforts of the Faith-Based and Community Initiative, hearing before the House 

Committee on Government Reform, Subcommittee on Criminal Justice, Drug Policy, and 

Human Resources, 109th Cong. (June 21, 2005). 

50White House (2001). Unlevel Playing Field: Barriers to Participation by Faith-Based

and Community Organizations in Federal Social Service Programs. Washington, D.C. 

Page 44 GAO-06-616 Faith-Based and Community Initiative
financial assistance that all applicants must complete. Although the 

application instructs applicants to identify themselves from a list of 

organizational categories, no category for faith-based organization is 

included.51

Some center officials told us that they believed that many FBOs may be 

reluctant to identify themselves as such on the voluntary survey because 

of concerns that being labeled faith-based might work against them in the

grant process. However, it is unclear the extent to which FBOs are 

reluctant to self-identify. Some FBOs may not be concerned as indicated 

by the fact that they have religious organizational names and their mission 

statements include religious references. In addition, according to HUD 

officials, since 1997 HUD has asked organizations applying for Continuum 

of Care programs to self-identify whether or not they are “a religious 

organization, or a religiously-affiliated or motivated organization.” HUD 

officials reported a high response rate from its applicants on this question 

and noted that for this program, they rely on these data rather than the 

voluntary survey to identify grantees that are FBOs. Finally, most of the 

26 FBOs we visited said they filled out the voluntary survey, and almost all 

said they would not be hesitant to self-identify as faith-based if asked. 

Developing criteria for what constitutes an FBO is a challenging task. 

Some organizations have a historical religious connection but only provide 

secular social services, while other organizations are churches where faith 

permeates the nonfederal services provided. The problem of determining, 

without consistently applied criteria across federal agencies whether an 

organization is faith-based or not is illustrated by one center official telling 

us that his agency considers all of the local Young Men’s Christian 

Association (YMCA) and the Young Women’s Christian Association 

(YWCA) entities to be FBOs on the basis of the religious affiliation 

contained in their organizational names and mission statements of the 

national organizations. Meanwhile, an official at another agency said that

his agency looked beyond the national organization to see if the local 

entities consider themselves to be faith-based. 

An official at one local YWCA in Texas told us that the organization does 

not consider itself to be an FBO. Similarly, several California organizations

 51One of the types of applicant categories available for applicants to check is “not for profit 

organization.” However the application does not contain any further breakdown of this

category. 

Page 45 GAO-06-616 Faith-Based and Community Initiative
listed by the WHOFBCI as FBOs told us that despite their religioussounding names, they did not consider themselves to be FBOs. This issue 

will also be a concern as centers seek to collect additional data on FBOs 

receiving state-administered formula grant programs. Several state 

officials said that they believed that having a standard definition for FBOs 

would help them if they are asked to collect data on which of their 

grantees are FBOs. 

Other attempts have been made to develop criteria for what constitutes an 

FBO for collecting data on federal funding to FBOs. A February 2006 study 

by the Roundtable on Religion and Social Welfare Policy sought to assess 

the extent of federal support of faith-based social service providers by 

examining the direct recipients of discretionary grant awards made by the 

federal agencies that have initiative-related centers. Drawing on past 

research on key characteristics of the faith character of organizations, the 

study developed five characteristics by which to define an organization as

an FBO. These characteristics include whether the organization used overt 

religious words or symbols in its name and whether religious or spiritual 

references were contained in the organization’s mission or value 

statement.52

Progress in achieving the initiative’s second long-term goal of improved 

participant outcomes cannot yet be determined because agencies have not 

completed most of the outcome-based evaluations for their ongoing pilot 

programs. OMB’s Standards for Success for the initiative requires agencies 

to undertake outcome-based evaluations of their pilot programs and build 

an evaluation component into new pilots. Outcome-based evaluations may 

involve several years of data collection before the analysis can take place,

and several of these pilot programs were initiated only a few years ago. 

Outcome Evaluations of Many

Pilot Programs Have Not Begun 

Generally, pilot programs help agencies demonstrate actual benefits that 

may be achieved using a particular approach. While outcome evaluations 

are an important component of program management in that they assess 

whether a participant is achieving an intended outcome—such as 

obtaining employment or completing high school—they cannot measure 

whether the outcome is a direct result of program participation. Other 

influences, such as the state of the local economy, may affect an 

 52See Montiel, Lisa M., and David J. Wright Getting a Piece of the Pie: Federal Grants to 

Faith-Based Social Service Organizations, The Roundtable on Religion and Social Welfare 

Policy, February 2006, Washington, D.C. 

Page 46 GAO-06-616 Faith-Based and Community Initiative
individual’s ability to find a job as much as or more than participation in 

an employment and training program. Many researchers consider impact 

evaluations—a form of outcome evaluation—to be the best method for 

determining the effectiveness of a program; that is, whether the program 

itself rather than other factors leads to participant outcomes. However, 

impact evaluations can be time-consuming and expensive and may not be 

appropriate in all circumstances.53

As shown in table 7, an outcome evaluation was completed or evaluations 

were under way for 7 of the 15 pilot programs for faith-based and 

community organizations. Justice completed an outcome-based evaluation 

for the Clergy Against Senior Exploitation pilot program in Denver. The 

evaluation suggests that the participants who completed the survey 

believe that they were more knowledgeable about types of fraud and fraud

prevention and were better prepared to report fraud after completing the

program than prior to the program. While such results are promising, the 

evaluation design does not allow for complete confidence that the pilot 

achieved its intended outcome of helping participants avoid becoming 

victims of fraud. For one of the six evaluations underway, we could not 

determine from the design plan provided to us on the Faith and 

Community-Based Juvenile Delinquency Treatment Initiative whether the 

evaluation would be outcome-based. While officials at Justice provided us

with a list of research questions related to the process and outcome 

evaluation under way, no specific information about the research design

was provided. 

 53For further information about the different types of program evaluations, including 

process, outcome, and impact evaluations, see GAO, Performance Measurement and

Evaluation: Definitions and Relationships, GAO-05-739SP (Washington, D.C.: May 2005). 

Page 47 GAO-06-616 Faith-Based and Community Initiative
Table 7: Most Required Outcome Evaluations Not Completed, and Some Design Plans May Not Support an Evaluation of 

Program Outcomes 

Agency Pilot and date established

Outcome

evaluation completed

Evaluation 

underway 

Intend to conduct 

outcome evaluation

No outcome 

evaluation planned

Life Connections-2002 X 

Faith and Community-Based 

Juvenile Delinquency Treatment 

Initiative–2003

X

CASE–2003 X

Justice 

Rural Domestic Violence and Child 

Victimization Enforcement Grant 

Program: Special Initiative FaithBased and Community 

Organizations Pilot Program–2005 

X 

Small Grassroots Program–2002 X 

Ready4Work–2003 X

Grants for Workforce Investment 

Boards–2004 X

Labor 

Prisoner Reentry Initiative–2005 X 

Education Supplemental Educational Services2004 X

Compassion Capital Fund 

Demonstration Program–2002 X

Compassion Capital Fund Targeted 

Capacity-Building Program–2003 X

HHS 

Mentoring Children of Prisoners–

2003 Xa

Access to Recovery–2004 X 

HUD Unlocking Doors Initiative–2005 X 

Mentoring Pilot Project–2005 X 

Total 1 6 6 2

Source: Education, HHS, HUD, Justice, and Labor program documents and interviews with agency officials. 

a

Center officials at HHS said they intend to conduct an impact evaluation of the Mentoring Children of 

Prisoners program that includes outcome data and analysis. 

Of the six pilot programs in which center officials said they intend to 

conduct outcome-based evaluations, HHS and HUD provided to us a total 

of five design plans. Three of the five design plans appear to support 

Page 48 GAO-06-616 Faith-Based and Community Initiative
outcome-based evaluations.54 However, for two of the five design plans, we 

could not determine whether the evaluations would be outcome-based 

because the plans lacked clarity and specificity about how the agency 

would conduct these evaluations. Specifically, for HHS’s Access to 

Recovery and Mentoring Children of Prisoners pilot programs, the written 

materials did not describe the methodology or research plans for the 

evaluations. With regard to the sixth pilot program, Labor did not provide 

us with any written materials with which to assess whether the evaluation

for the Small Grassroots Program would be outcome-based or not. For the 

two pilot programs in which agencies do not plan to conduct an outcomebased evaluation, HUD completed a non-outcome-based evaluation, and 

Labor officials told us they have no plans to conduct an evaluation for the 

Grants for Workforce Investment Boards pilot program. 

Our previous work has shown that it is important for agencies to 

collaborate with OMB to increase the likelihood that evaluations will meet 

OMB’s needs. As agencies move forward with their design plans for 

evaluating pilot programs, it will be important for agencies to discuss the 

expectations for the scope and purpose of evaluation designs with OMB so 

that these evaluations will meet the intended need. Evaluations designed 

for internal audiences, such as agency officials, and others designed for 

external audiences, often have a different focus. Evaluations that agencies 

initiate typically aim to identify how to improve the allocation of program 

resources. Studies requested by program-authorizing or oversight bodies,

such as OMB, are more likely to address external accountability—to judge 

whether the program is properly designed or is solving an important 

problem. 

Although determining whether or not FBOs are more effective than 

secular organizations in helping program participants is not an explicit 

goal of the initiative, this issue has been part of the discussion since the 

initiative’s inception. In the five agencies we reviewed, we identified only

one program evaluation, by Education, that will seek to compare the 

effectiveness of FBOs with that of secular organizations.55 Judging from 

 54The three pilot programs in which design plans appear to support outcome evaluations

are HHS’ Compassion Capital Fund Demonstration Program, the Compassion Capital Fund

Targeted Capacity-Building Program, and HUD’s Mentoring Pilot Project. 

55Education stated that it plans to compare the performance of faith-based and community 

organizations to non-faith-based and community organizations in certain departmentfunded programs by asking questions such as if the quality of programs funded by the 

department increased from 2001 to 2004 as a result of the participation of faith-based and

community organizations in the grant application process.

Page 49 GAO-06-616 Faith-Based and Community Initiative
our literature review of independent, nongovernmental studies, very few 

studies attempt to make this comparison. We identified four studies 

comparing the effectiveness of faith-based organizations with that of 

secular organizations and determined that three of these studies lack 

methodological rigor. The fourth study did not find a statistically 

significant difference in the ratings made by people with low income of the 

effectiveness of faith-based organizations compared with nonsectarian 

organizations. However, the results of this study are not generalizable 

because the study’s sample of respondents is for only two counties in 

Pennsylvania.

56

Agencies are tasked by OMB to achieve the two long-term goals of the 

initiative: 

OMB Faces Challenges in 

Measuring and Reporting on 

Progress in Meeting Long-Term 

Goals of Initiative • greater participation by faith-based and community groups because 

of regulatory and statutory reform, streamlined contracting 

procedures, and improved coordination and outreach activities to 

disseminate information more effectively at the grassroots level to 

faith-based and community organizations; and

• improved participant outcomes by placing a greater emphasis on 

accountability and by making federal assistance better tailored to 

local needs through the use of faith-based and community groups. 

Some center officials stated that achieving green status on OMB’s 

scorecard did not necessarily mean that an agency had accomplished 

these long-term goals, but rather indicated the extent to which agencies 

had implemented OMB’s Standards for Success. 

OMB has not fully assessed or reported on agencies’ progress toward 

achieving the two long-term goals of the initiative and is likely to 

encounter challenges in doing so. For example, with regard to the first 

goal of greater participation by faith-based and community groups, we 

have already noted that although the WHOFBCI has reported annually on 

the numbers and amounts of federal competitive grants awarded to FBOs, 

there may be issues of accuracy with these data. Moreover, this data 

reporting effort has focused on FBOs, not on community-based 

organizations—the other group of organizations specified in the long-term 

 56See, Wuthnow, Robert, “The Effectiveness and Trustworthiness of Faith-based and Other 

Service Organizations: A Study of Recipients’ Perceptions,” Journal of Scientific Study of 

Religion. 43:1, (2004). 

Page 50 GAO-06-616 Faith-Based and Community Initiative
goal. In addition, OMB also faces the challenge of translating the general 

goal of greater participation into measurement standards that do not 

create perverse incentives or unreasonable expectations for agencies. The 

general goal of greater participation could be measured in various ways, 

such as through the number or percentage of these groups among federal 

grant applicants, the number or percentage of grants awarded to these 

groups, or the amount or percentage of grant funds awarded to these 

groups. 

With regard to the second long-term goal of improving participant 

outcomes, OMB is also likely to face challenges in assessing agencies’ 

progress. For example, OMB has tasked agencies with performing 

outcome-based evaluations of the pilot programs in their faith-based and 

community initiative, but as we have noted, most of these evaluations have

not been completed. In addition, it is unclear whether the outcome-based 

evaluations of pilot programs that eventually will be completed will 

provide sufficient information for assessing progress towards the second 

long-term goal—in part, because the goal of improved participant 

outcomes could be measured in different ways. Finally, it is unclear 

whether assessing agencies’ progress toward this long-term goal would 

also take account of participant outcomes in some of the other nonpilot 

programs in which faith-based or community organizations receive grants, 

and if so, whether sufficient data would be available for these programs. 

These varied challenges do not undercut the importance of moving from a 

focus on processes to long-term results in assessing agencies’ performance 

in implementing the faith-based and community initiative. GAO has 

previously reported that results-oriented agencies continuously strive to 

improve their strategic planning efforts and do not view strategic planning 

as a static or occasional event.57

The Administration’s efforts to expand opportunities for faith-based and 

community organizations to provide federally funded social services have

garnered support from many parties while at the same time prompting 

concerns from others about whether federal funds should be used to 

support the activities of FBOs and whether adequate measures are in place 

to ensure that these organizations are not using federal funds to support 

religious activities. Most of the programs that we reviewed provided some 

Conclusions 

 57See GAO, Agencies Strategic Plans under GPRA: Key Questions to Facilitate 

Congressional Review, GAO/GGD-10.1.16 (Washington, D.C.: May 1997).

Page 51 GAO-06-616 Faith-Based and Community Initiative
guidance to applicants and grantees on the requirement that federal funds 

for their programs not be used for religious activities, although some 

federal and state offices did a better job than others in clearly presenting 

information on this requirement to their grantees. We found instances 

where FBOs did not appear to understand the nuances associated with the 

equal treatment rule that prohibits FBOs from engaging in inherently 

religious activities while providing services supported with direct federal 

funds. We also found that Justice’s exemption to the restrictions on 

inherently religious activities for certain programs, including the 

correctional program we reviewed, lacks needed specificity and does not 

provide FBOs with clear guidance on what religious activities they can and 

cannot engage in with federal funds in correctional settings. 

We also found that many program offices only provided citations to 

federal or program regulations in their grant documents for the rules 

related to nondiscrimination against beneficiaries and permissible hiring 

by FBOs and that several provided outdated information. In many of the

programs we reviewed, government agencies are not systematically 

monitoring for compliance with the equal treatment safeguards. While 

government agencies are not required by federal regulation to specifically

monitor grantees for compliance with these safeguards, without some 

written guidelines—including those used in single audits—that require a

discussion and check of these safeguards during monitoring, the 

government has little assurance that the safeguards are protecting 

beneficiaries, government agencies, and FBOs as intended. Furthermore, 

one of OMB’s Standards for Success that agencies must meet to receive a 

green grade is to monitor grantees for compliance with the equal 

treatment safeguards. 

In addition to monitoring, program accountability can be facilitated 

through sound performance management and reporting, including reliable 

performance data. Collecting credible data on FBOs receiving federal 

funds is a difficult and time-consuming task, and the centers and program 

offices have made good-faith efforts to develop estimates for FBOs 

receiving federal grants. Nonetheless, without standard criteria across all 

agencies of what constitutes a faith-based organization or a requirement 

that FBOs self-identify, the data that the agencies collect may limit the 

ability of policymakers to assess the extent to which the initiative is 

progressing toward achieving its long-term goal of greater faith-based and 

community participation. While some have voiced concerns about 

requiring FBOs to self-identify, it is important to note that the surveys with 

this information are included in grant applications but are not considered 

when independent grant reviewers evaluate grant applications. In addition, 

Page 52 GAO-06-616 Faith-Based and Community Initiative
FBOs may not be concerned about identifying themselves as faith-based as 

indicated by the fact that they have religious organizational names and 

their mission statements include religious references that are often seen

by grant reviewers. 

Since 2001, agencies and OMB have emphasized progress toward the 

initiative’s short term goals. Now that many agencies have achieved green 

status for their work on eliminating barriers and undertaking outreach and 

technical assistance to local organizations, it will be important for OMB to

ensure that the initiative’s strategic, long-term goals clearly articulate what

OMB intends to measure so that it can assess whether agencies are 

achieving these goals and demonstrate whether agencies are using 

taxpayer dollars effectively. As with other strategic planning efforts, 

updating and revising long-term goals every several years is considered an 

effective performance management practice. Clarifying and fine-tuning 

strategic goals can help center officials manage their efforts toward 

achieving appropriate and realistic long-term goals. 

To improve grantee understanding and federal agency oversight of the 

equal treatment regulations for programs in which faith-based 

organizations are eligible for federal funding, we recommend that the 

Director of OMB: 

Recommendations for 

Executive Action 

1. ensure that all agencies with initiative-related centers include 

information on the equal treatment safeguards in program grant 

documents for which faith-based organizations are eligible, and 

2. direct federal agencies and, where appropriate, state agencies, to 

include a reference to the equal treatment safeguards in their 

monitoring tools the agencies use to oversee federally funded grantees, 

and 

3. ensure that program-specific single audit supplements, where 

appropriate, include a reference to these safeguards. 

To ensure that contractors for Justice’s correctional programs understand 

the exception to the prohibition on using federal funds for inherently 

religious activities, we recommend that the Attorney General: 

1. clarify the scope of the exception for chaplains and organizations 

assisting chaplains to the general prohibition against using federal 

funds for religious activities, and 

Page 53 GAO-06-616 Faith-Based and Community Initiative
2. include a clear explanation of the exception and its scope in the 

contracts for Justice’s correctional programs. 

To improve accountability of the Faith-Based and Community Initiative,

we also recommend that the Director of OMB: 

1. Work with the Secretaries of Education, HHS, HUD, and Labor, and 

Justice’s Attorney General, to develop a consistently applied method 

that will provide more accurate data on which organizations receiving

federal funds are faith-based. This effort could consider options such 

as developing consistently applied criteria of what constitutes a faithbased organization, making the voluntary OMB survey of grant 

applicants mandatory, or modifying OMB’s mandatory grant 

application form to include a category for faith-based organizations. 

2. Develop a plan for measuring and reporting on progress in achieving 

the long-term goals of the faith-based and community initiative. This 

effort may involve reassessing the two current long-term goals to 

determine whether they should be revised and clarifying their 

connection to the Standards for Success.

We received comments from Education, HHS, HUD, Justice, Labor, and 

OMB on a draft of this report. Comments from Education, HHS, HUD, 

Justice, and Labor are contained in appendixes IV through VIII. Education, 

HHS, HUD, Labor and OMB also provided technical comments, which we 

incorporated where appropriate. 

Agency Comments 

On May 31, 2006, we met with OMB officials to obtain their comments on 

our draft report. OMB officials stated that they generally agreed with the 

report’s recommendations to OMB. They agreed that our 

recommendations that OMB take action to help ensure that agencies 

include information on the equal treatment safeguards in program grant 

documents and in program monitoring tools were reasonable. OMB 

officials noted that these efforts would build upon agencies’ existing 

efforts to ensure that grantees are aware of these important safeguards. 

In regard to our recommendation that OMB ensure that agencies include a 

reference to the equal treatment safeguards in program grant documents, 

Education and HHS stated that they already provide sufficient information 

in their grant documents on these safeguards. Our report documents in 

table 5 which programs in our review include references to specific 

safeguards in their grant documents. While a few programs provide 

Page 54 GAO-06-616 Faith-Based and Community Initiative
information on all three safeguards we examined, most do not. 

Education’s Mentoring program that we reviewed provided only citations 

to the equal treatment regulations and did not, for example, explicitly state 

in its grant documents that grantees cannot provide inherently religious 

activities with direct federal funds. One of HHS’s programs included in our

review did not provide any information on 2 of the 3 safeguards we 

examined. We believe that including information on the safeguards in one 

or more key grant documents will provide greater assurance that grantees 

are aware of and understand the safeguards designed to protect the 

interests of FBOs, beneficiaries, and the government. 

Education, HHS, HUD, and Labor took issue with our recommendation 

that agencies be required to include a reference to the equal treatment 

safeguards in their monitoring tools. They stated that such a requirement 

would involve singling out faith-based organizations for greater oversight 

and monitoring than other program participants on the basis of presumed 

or confirmed religious affiliation. However, we are not recommending that 

that they monitor FBOs more frequently or any differently than they 

monitor other organizations. The equal treatment regulations are 

potentially applicable to all grantees providing federally funded services. 

While these regulations may have more relevance to FBOs and their 

activities, we do not believe that having agencies ensure compliance with

all applicable regulations, including the equal treatment regulations, 

results in any improper unequal treatment of FBOs. In our view, creating a 

level playing field for FBOs does not mean that agencies should be 

relieved of their oversight responsibilities relating to the equal treatment 

regulations. In addition, as noted in our report, several of the 10 program 

offices in our review included such a reference to equal treatment 

regulations in their monitoring guidelines, and officials from 2 other 

program offices told us that they intend to include information on these 

regulations as they revise their monitoring guidelines. For example, Labor 

officials stated in their comments that they have drafted detailed revisions 

to their monitoring tools that will enhance their efforts to ensure 

compliance with all facets of the equal treatment regulations.

HHS officials provided an additional comment on their efforts to ensure 

that their program staff understand the equal treatment regulations. They 

stated that HHS provides training to HHS program staff and state and local 

officials who administer federal program funds. We agree that such 

training can provide an important means for ensuring appropriate 

monitoring, but we believe that including information on these safeguards

in program monitoring tools, as several programs covered in our review 

currently do, is a prudent approach to ensuring that program staff will 

consider these safeguards when monitoring grantees. 

Page 55 GAO-06-616 Faith-Based and Community Initiative
OMB officials noted that grant-monitoring efforts could be strengthened 

governmentwide and that our recommendation that OMB ensure that 

program-specific single audit supplements include a reference to these 

safeguards would need to be considered in the context of grant-monitoring 

requirements overall. They stated that for some programs that already 

have extensive audit requirements, expanding the program-specific audit

requirements could pose additional burdens to the independent auditors 

conducting those reviews and might not be implemented uniformly. OMB 

also questioned the potential usefulness of this recommendation since 

smaller programs do not have a program-specific supplement and many 

faith-based and community organizations receiving federal grants do not 

expend $500,000 or more in federal funds and therefore would not be 

subject to a single audit. 

We agree that a governmentwide review of grant monitoring requirements 

would be valuable and we acknowledge that adding a reference to 

program-specific single audit supplements would add another audit step

for independent auditors and that agencies need to balance the additional 

requirement with the added assurance it would give providers. While we 

modified the recommendation to indicate that it might not be suitable to 

include a reference to the equal treatment safeguards in some programspecific supplements, we continue to believe that including these 

references wherever appropriate based on facts, circumstances, and risk, 

would help assure interested parties that grantees are using federal funds

appropriately. It is noteworthy that two of the three programs in our 

review that had a 2006 program-specific audit required auditors to check 

that funds were not expended for inherently religious activities. We agree 

with OMB that many programs do not have program-specific supplements 

and that many faith-based and community organizations may not be 

subject to the single audit because of the $500,000 threshold. However, 

including a reference to the safeguards in these supplements would 

provide an additional check for compliance with these safeguards when 

independent auditors conduct a single audit of larger organizations. 

Moreover, our recommendation that agencies include information on the 

safeguards in their program grant documents takes on increased 

importance for those organizations not subject to a single audit. As noted 

in our report, one of the independent auditors we spoke with said that he

developed his own audit plan by reviewing the grant application package.

Regarding our recommendation that OMB work with agencies to develop 

more accurate data on FBO grantees, officials at OMB said that they agree

that having better data on the types of organizations applying for and 

receiving federal grants would help agency and Administration efforts to 

Page 56 GAO-06-616 Faith-Based and Community Initiative
gauge the success of the initiative. They said that federal agencies have 

been improving the quality of the data they collect, and which the White 

House reports annually, on FBOs receiving federal grants. However, OMB 

officials said that there are obstacles to obtaining better data and that they

are uncertain about the extent to which the data could be further 

improved. They noted that agencies are concerned about the practical and 

legal difficulties inherent in developing a uniform definition for what 

constitutes an FBO. OMB officials stated that OMB and agencies have 

discussed making the voluntary survey mandatory, but that this step has 

not been taken because of agency concerns that some FBOs would not be 

comfortable self-identifying and that mandatory self-identification might 

discourage participation. HHS also questioned our recommendation to 

improve the data that the centers collect on federal grants awarded to 

FBOs. HHS stated that our recommendation suggests the need to establish 

a uniform definition of an FBO, which HHS stated would be problematic 

and provide questionable benefit. 

We acknowledge in our report that developing criteria on what constitutes 

an FBO is a challenging task, and our recommendation does not dictate 

that agencies establish a uniform definition. However, in cases where an 

organization chooses not to self-identify, the various agency centers or 

program offices are currently applying criteria—whether explicitly or 

implicitly—that determine whether they categorize an organization as an 

FBO. We believe that greater consistency in their use of such criteria could 

help improve the accuracy of data on funds received by FBO grantees. In

addition, the extent to which FBOs are reluctant to self-identify is unclear. 

HUD includes in its Continuum of Care grant application a request for 

programs to self-identify, and HUD officials reported a high response rate 

from its applicants on this question. In addition, some FBOs have religious 

names and their mission statements include religious references. Without 

evidence that FBOs are reluctant to self-identify, we believe that agencies

should explore the possibility of making the voluntary survey mandatory 

or modifying the mandatory application form to include a category for 

FBOs. We believe that if one of the stated long-term goals of the initiative

continues to be greater participation of faith-based and community 

organizations in providing federally funded social services, then it is 

critical to systematically explore options for obtaining more accurate data

on participation. 

With regard to our recommendation to OMB to develop a plan for 

measuring and reporting on progress in achieving the two long-term goals 

of the faith-based and community initiative, OMB officials had a different

response for each long-term goal. For the long-term goal of improving 

Page 57 GAO-06-616 Faith-Based and Community Initiative
participant outcomes, OMB officials agreed that it is reasonable for OMB 

to publish the results of the outcome-based evaluations that agencies are 

required to conduct on their pilot programs. However, OMB officials said 

they did not see a need for OMB to develop a plan for measuring and 

reporting on progress with respect to the other long-term goal of greater 

participation of faith-based and community organizations. They noted that 

the White House is already reporting on the numbers of FBOs receiving 

federal grants and the amounts of these grants in selected programs and 

trends in these areas. However, OMB officials acknowledged that there is 

a lack of clarity about how the two long-term goals of the initiative are 

linked with OMB’s Standards for Success and that it thus may be 

appropriate to clarify their connection as part of a reassessment of the 

long-term goals. We agree with OMB that the long-term goals might need 

to be better aligned with the interim goal of expanding opportunities for 

faith-based and community organizations to compete on an equal basis for 

federal funding and we modified our recommendation to reflect this point. 

We also agree with HHS’s comment that it would be inappropriate to 

establish arbitrary participation goals. 

Our draft report had included a recommendation that OMB make publicly 

available the Standards for Success for the FBCI. OMB posted these 

standards on its Web site in late May and we accordingly deleted this 

recommendation in our final report.

Justice agreed with our recommendation that the Attorney General clarify 

the scope of the exception contained in Justice’s equal treatment 

regulations for chaplains and organizations assisting chaplains. With 

regard to our other recommendation to the Attorney General, Justice 

stated that the Department’s Federal Bureau of Prisons is open to 

discussing possible changes to its contract language to further clarify the 

scope of the exception to community corrections centers. See appendix IV

for our annotated responses to each of the comments Justice made in its 

letter. 

In several instances, agencies commented that our report omitted 

important information. For example, HUD stated that we do not define 

what safeguards are designed to protect FBOs, beneficiaries, and the 

government. However, this information is outlined in table 2 and the 

safeguards are discussed in detail on pages 29-36. HUD also took issue 

with our characterization of the initiative’s goals. HUD stated that we do 

not acknowledge the Administration’s stated goals for the initiative of 

removing barriers, leveling the playing field, and providing technical 

assistance. However, we discuss these goals in table 1 and on page 40.

Page 58 GAO-06-616 Faith-Based and Community Initiative
Labor also stated in its comments that the object of the initiative is to level 

the playing field. While our report notes that this is a stated goal of the 

initiative, our report also cites the stated long-term PMA goals of the 

initiative of greater participation of faith-based and community 

organizations and improved participant outcomes. Labor also commented 

that our report overlooks the data that Labor collects from grantees on 

outcome measures, such as employment and earnings. Our report 

discusses the long-term goal of improved participant outcomes and 

provides information on the status of the outcome evaluations for the 

15 pilot programs for faith-based and community organizations. The scope 

of our work did not include reporting the data being collected for 

individual outcome measures in the various programs. Finally, Education

stated in its comments that we did not find any indication of unallowable 

activity. This is true except with regard to the prohibition pertaining to 

inherently religious activities. We found that a few of the FBOs included in 

our review described engaging in activities that appear not to be 

permissible with respect to this prohibition, as noted on pages 34-35. 

Page 59 GAO-06-616 Faith-Based and Community Initiative
As agreed with your offices, unless you publicly announce its contents 

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

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

HHS, HUD, Education, and Labor; the Attorney General; the Director of 

OMB; appropriate 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. 

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

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

Appendix IX. 

Cynthia M. Fagnoni 

Managing Director, Education, Workforce, 

 and Income Security Issues 

Page 60 GAO-06-616 Faith-Based and Community Initiative
A

by Categor

ppendix I: Centers’ Estimated Expenditures

y, Fiscal Year 2005 

Page 61 GAO-06-616

Appendix I: Centers’ Estimated Expenditures 

by Category, Fiscal Year 2005 

Percent 

Source: GAO analysis of Education, HHS, HUD, and Labor data.

0 10 20 30 40 50 60 70 80 90 100 

Education 

HHS

HUD 

Labor 

Salaries/benefits

Other administrative costs

Contractual services

Travel 

Note: Justice was not able to provide a breakdown of its center’s expenditures. 

Faith-Based and Community Initiative
Appendix II: Selected Characteristics of 

Faith-Based Organizations GAO Visited 

Religious 

affiliation 

Federal funding 

program(s) 

Provide 

voluntary 

religious 

services for 

clients 

Received

federal 

funding prior

to FBCI 

Believes FBCI 

changed 

opportunities

for their 

organization 

Annual 

overall 

budget 

(dollars in 

thousands) 

Annual 

program

budget 

(dollars in 

thousands) 

Percentage of

federal funds in 

program budget

Christian Community-Based

Abstinence 

Education, HHS; 

Abstinence 

Education Program, 

HHS 

No No No 1,500 104 83

Christian Community-Based

Abstinence 

Education, HHS 

No Yes No 632 378 100

Christian Community-Based

Abstinence 

Education, HHS 

No Yes Yes 1,500 680 100

Jewish Microenterprise

Development 

Program, HHS

No Yes Yes 4,615 300 100

InterFaith Grants for Small 

Faith-Based and 

Community Nonprofit 

Orgs., Labor 

Yes No Yes 50 50 50

Christian Grants for Small 

Faith-Based and 

Community Nonprofit 

Orgs., Labor 

Yes No No 225 150 17

Christian Grants for Small 

Faith-Based and 

Community Nonprofit 

Orgs., Labor 

Yes No Yes 250 250 10

Baptist Mentoring Children of 

Prisoners, HHS 

No No Yes 550 270 75

Lutheran Continuum of Care,

HUD; Emergency 

Shelter Grants 

Program, HUD

No Yes No 41,000 5,550 20

Pentecostal Continuum of Care,

HUD 

Yes Yes No 3,200 525 40

Interfaith Microenterprise

Development 

Program, HHS

No Yes Uncertain 950 325 60

Evangelical Community

Corrections 

Contractor with

Bureau of Prisons, 

Justice 

Yes Yes No 3,000 825 100

Appendix II: Selected Characteristics of 

Faith-Based Organizations GAO Visited 

Page 62 GAO-06-616 Faith-Based and Community Initiative
Appendix II: Selected Characteristics of 

Faith-Based Organizations GAO Visited 

Religious 

affiliation 

Federal funding 

program(s) 

Provide 

voluntary 

religious 

services for 

clients 

Received

federal 

funding prior

to FBCI 

Believes FBCI 

changed 

opportunities

for their 

organization 

Annual 

overall 

budget 

(dollars in 

thousands) 

Annual 

program

budget 

(dollars in 

thousands) 

Percentage of

federal funds in 

program budget

Christian Abstinence

Education Program, 

HHS 

No No Yes 313 313 100

Christian Abstinence

Education Program, 

HHS 

No Yes No 100 100 92.5

Catholic Continuum of Care No Yes No 36,000 1,300 Less than 50

Protestant Emergency Shelter

Grants Program, 

HUD 

Yes Yes No 1,500 244 26

Christian Emergency Shelter

Grants Program, 

HUD 

No Yes No 300 300 25

Christian Continuum of Care,

HUD 

Yes Yes No 1,900 310 25

Christian Substance Abuse

Prevention and

Treatment Grants, 

HHS 

Yes Yes No 22,000 4,000 55

Christian Continuum of Care,

HUD; Emergency 

Shelter Grants 

Program, HUD

Yes Yes No 9,000 1,000 50

Christian Substance Abuse

Prevention and

Treatment Grants, 

HUD 

Yes Yes No 1,400 873 80

Protestant Community-Based

Abstinence 

Education, HHS; 

Abstinence 

Education Program, 

HHS 

Yes Yes Yes 1,281 439 83

Protestant Department of

Education Mentoring 

Programs 

Yes No Yes 300 103 99

Catholic Community

Corrections 

Contractor with

Bureau of Prisons, 

Justice 

Yes Yes Yes 1,500 1,500 100%

Page 63 GAO-06-616 Faith-Based and Community Initiative
Appendix II: Selected Characteristics of 

Faith-Based Organizations GAO Visited 

Religious 

affiliation 

Federal funding 

program(s) 

Provide 

voluntary 

religious 

services for 

clients 

Received

federal 

funding prior

to FBCI 

Believes FBCI 

changed 

opportunities

for their 

organization 

Annual 

overall 

budget 

(dollars in 

thousands) 

Annual 

program

budget 

(dollars in 

thousands) 

Percentage of

federal funds in 

program budget

Christian Continuum of Care,

HUD; Emergency 

Shelter Grants 

Program, HUD

No Yes No 1,354 260 38%

Christian Department of

Education Mentoring 

Programs 

No No No 250 106 80-85%

Source: GAO analysis of information obtained from interviews with officials from the 26 FBOs. 

Page 64 GAO-06-616 Faith-Based and Community Initiative
Appendix III: Best Prac

Initiative’s Sta

tices for the 

ndards for Success 

Page 65 GAO-06-616 

Appendix III: Best Practices for the 

Initiative’s Standards for Success 

Best Practices for 

Outreach and Technical 

Assistance 

1. reviews agency programs to identify those of particular interest to 

faith-based and community organizations, 

2. implements a strategic outreach and technical assistance plan

(through White House regional conferences and workshops), 

3. creates a database of faith-based and community organizations and 

maintains grant solicitation mailing lists, 

4. produces informational materials in consultation with the White House 

Office of Faith-Based and Community Initiatives (WHOFBCI) 

5. organizes technical assistance workshops, 

6. provides Web-based outreach and technical assistance, 

7. participates in interagency conferences on the Faith-Based and 

community Initiative, 

8. incorporates Faith-Based and Community Initiative outreach goals into 

agencywide events. 

9. implements an action plan in consultation with WHOFBCI to enhance 

opportunities of faith-based and community organizations to compete 

for federal funds at the state and local levels (through White House 

regional conferences and workshops), 

Federally Administered 

Grant Programs 

State and locally

Administered Grant 

Programs 

10. Creates a database of faith-based and community organizations 

interested in state and locally administered grant programs, 

11. provides targeted Web-based outreach and technical assistance, 

12. distributes written outreach materials approved by WHOFBCI, 

13. coordinates with state and local agencies through regional offices on 

outreach activities, 

14. adopts successful outreach and technical assistance practices of other 

agencies, 

 Faith-Based and Community Initiative
Appendix III: Best Practices for the 

Initiative’s Standards for Success 

15. coordinates with regional offices to provide technical assistance 

workshops. 

1. posts a notice of the regulation on its center for faith-based and 

community initiative Web site, 

Best Practices for 

Implementation of Equal 

Treatment Regulations 

Education 

2. posts a notice of the regulation on Web sites of agency program 

offices, 

3. sends a program memo to state and local administrators of agency 

funds, alerting them to the final rule and asking them to ensure that 

their own processes and policies reflect the rule,

4. develops materials such as questions and answers, PowerPoint 

presentations, and easily accessible explanations of the rule in

consultation with WHOFBCI to educate internal and external

stakeholders about the regulations, 

5. educates agency grant staff, including field offices, that manage 

formula grants on the requirements of the regulation, 

6. arranges training for state and local officials who administer funds 

under the regulation (through White House regional conferences and 

workshops), 

7. educates governors’ offices and mayors’ offices about the 

requirements of the regulation (through materials to be provided at 

White House regional conferences and workshops), 

8. discusses the regulations at conferences, 

9. encourages organizations that represent grantees to highlight the 

regulations in constituent newsletters, 

10. sends a more detailed policy notice or guidance document to state and 

local officials on how to implement the rule. 

Page 66 GAO-06-616 Faith-Based and Community Initiative
Appendix III: Best Practices for the 

Initiative’s Standards for Success 

Compliance 11. enforces existing procedures when monitoring uncovers a violation, 

12. conducts a representative survey in consultation with OMB and 

WHOFBCI by program or by state to examine indicators of progress in 

complying with the regulations, 

13. reviews existing mechanisms to determine whether they include 

sufficient monitoring to ensure compliance with the equal treatment 

regulations.

Page 67 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from the Department Appendix IV of Justice : Comments from the 

Department of Justice 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

Page 68 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from the Department 

of Justice 

See comment 1. 

See comment 2. 

See comment 3. 

Page 69 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from the Department 

of Justice 

See comment 4. 

See comment 5. 

See comment 6. 

Page 70 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from the Department 

of Justice 

See comment 7. 

See comment 8. 

Page 71 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from

the Department of Justice 

The following are GAO’s comments on the Department of Justice’s letter 

dated May 22, 2006. 

1. The statement that Justice cites does not refer to the mission of the 

Administration’s Faith-Based and Community Initiative but to funds 

awarded since 2001 through new grant programs. (The goals of the 

initiative are discussed on pages 11 and 40.) On page 25, we state that 

these new programs were created to provide training and technical 

assistance to faith-based and community organizations and to increase 

the participation of these organizations in providing federally funded 

social services. As shown in table 4 (pages 26-28), eligibility for 

several of these grants is specifically targeted to faith-based and 

community organizations and the stated purpose of many of these 

grants is to increase participation of faith-based and community 

organizations in providing federally funded social services. For 

example, the stated purpose of Justice’s HOPE II program is to 

“increase the development and capacity of faith-based and/or 

community based organizations” to respond to victims in high-crime 

areas. In addition, as noted in HHS news releases, HHS’s Compassion 

Capital Fund awards are “designed to help grass roots, faith-based and 

community organizations enhance their ability to provide a wide range 

of social services.” We revised our statement on the highlights page 

and on page 22 to more fully reflect the purpose of these new grant 

programs. 

GAO Comments 

2. We fully explain the safeguard related to inherently religious activities 

in Table 2, p. 13. In regard to the point that this safeguard relates to 

direct and not indirect federal funding, table 2 notes that this safeguard 

refers to “direct” government funds. For further clarification, we 

added a footnote to this table to explain that this safeguard does not 

pertain to providers offering services through indirect funding, such as 

vouchers, and clarified throughout the report that inherently religious 

activities cannot be offered unless separate in time or location from 

direct federally funded program activities. 

3. GAO understands the authority of the government to provide chaplains 

and other spiritual accommodation for inmates in custody. However, 

as we discussed with Justice officials during our exit meetings, we 

believe that the scope of the exception for community corrections 

centers stated in Justice’s equal treatment regulations (28 CFR 38.1 (b) 

(2)) needs to be clarified and that an explanation of this exception 

should be contained in community correction program contracts. 

Justice currently does not include a discussion of this exception in its 

Page 72 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from

the Department of Justice 

contracts and we maintain that community corrections staff may not 

understand whether or under what circumstances they may engage in 

religious activities using federal funds. Our report also recommends, 

and Justice agreed that the Attorney General should clarify the scope 

of the exception in its equal treatment regulations. We did not include 

any FBOs administering the Community Corrections program when we 

stated that four of the FBOs we visited appeared to violate the 

safeguard related to the prohibition on inherently religious activities 

unless separated in time or location from federally funded services. 

4. GAO does not recommend that departments use a “bright line” 

definition of an FBO when collecting data on grantees. Our report 

acknowledges the efforts federal agencies make to collect accurate 

data on grants awarded to FBOs, including the voluntary survey used 

by all the agencies in our review (see page 44). However, as we note in 

the report, producing credible data on outcomes achieved through 

federal programs has historically been a challenge for the federal 

government. Various parties, including former officials from the White 

House Office of Faith-Based and Community Initiatives, have raised 

concerns about the accuracy of, and the methods used to collect, data

on FBOs. Our report calls for efforts among federal agencies to 

develop an improved method for identifying which organizations are 

faith-based. We note that this can be achieved through several options, 

including ones that do not require that agencies define what 

constitutes an FBO. Justice also raises the possibility that the 

initiative’s progress can be measured as long as the department 

distinguishes between public agencies and nongovernmental

organizations. However, this is not how the initiative is currently being

measured. The PMA lays out the long-term goals of the initiative, one 

of which specifically cites greater participation by faith-based and 

community organizations. The White House published data on the 

number of FBOs receiving direct federal grants for selected agencies in

2003-2005 but has not published data on the number of grants received 

by government versus non-governmental organizations. 

5. We revised the text on page 8 to reflect our findings in the report on 

the number of pilot program evaluations under way or completed. We

believe that table 7 on page 48 accurately reflects the status of the 

evaluations to the extent possible based on the limited information 

provided by some of the departments on many of these evaluations. In 

addition, we added a sentence on pages 8 and 46 that acknowledges 

the time it may take to collect outcome-based data and the fact that 

many of the pilot programs began recently. 

Page 73 GAO-06-616 Faith-Based and Community Initiative
Appendix IV: Comments from

the Department of Justice 

6. We discussed with Justice officials various competitive programs 

before deciding to review the Community Corrections Contracting 

program. We requested and Justice officials provided to us detailed 

information on several competitive grant programs, including 

information on the Community Corrections Contracting program. We 

chose this program because, in 2004, at least three times as many 

FBOs received grants from this program than any other Justice 

program in that same year. 

7. Appendix II of the draft report provided information on the grant 

program and department from which each of the 26 FBOs received its 

award or contract and table 3 (see page 24) shows whether the grant 

was a project grant, formula grant, or contract. 

8. GAO believes that including information on these safeguards in grant 

documents will improve grantee understanding of the equal treatment 

regulations. Given that Justice’s equal treatment regulations contain an 

exception to the safeguard related to the prohibition on organizations 

providing inherently religious activities unless separate in time or 

location from federally funded services, we believe that an explanation 

of this exception should be included in the contracts for Justice’s 

correctional programs. We do not recommend that an explanation of 

this exception be included in every program document, as Justice 

asserts. Rather, our recommendation clearly states that an explanation 

of the exception should be included in the contracts for Justice’s 

correctional programs. Justice states that the Bureau of Prisons is 

open to discussing possible changes to its contract language to further 

clarify the scope of the exception for community corrections centers. 

Page 74 GAO-06-616 Faith-Based and Community Initiative
Appendix V: Comments from the Department Appendix V of Education : Comments from the Department 

of Education 

Page 75 GAO-06-616 Faith-Based and Community Initiative
Appendix V: Comments from the Department 

of Education 

Page 76 GAO-06-616 Faith-Based and Community Initiative
Appendix VI: Comments from the Department Appendix VI: Comments from the of Health and Human Services 

Department of Health and Human Services 

Page 77 GAO-06-616 Faith-Based and Community Initiative
Appendix VI: Comments from the Department 

of Health and Human Services 

Page 78 GAO-06-616 Faith-Based and Community Initiative
Appendix VII: Comments from the Department of Housing and Urban Development 

Page 79 GAO-06-616

Appendix VII: Comments from the 

Department of Housing and Urban 

Development 

Faith-Based and Community Initiative
Appendix VII: Comments from the Department of Housing and Urban Development 

Page 80 GAO-06-616 Faith-Based and Community Initiative
Appendix VIII: Comments from the Appendix VIII: Comments from the Department of Labor 

Department of Labor 

Page 81 GAO-06-616 Faith-Based and Community Initiative
Appendix VIII: Comments from the 

Department of Labor 

Page 82 GAO-06-616 Faith-Based and Community Initiative
Appendix IX: 

A

GAO Contacts and Staff 

cknowledgments 

Page 83 GAO-06-616 

Appendix IX: GAO Contacts and Staff 

Acknowledgments 

GAO Contact Cynthia M. Fagnoni (202) 512-7215, FagnoniC@gao.gov

In addition to the contact named above, Andrew Sherrill, Assistant 

Director, and Elizabeth Morrison, managed this assignment. 

James Whitcomb, Lauren Jones, and Robert Sampson made significant 

contributions to this review. Richard Burkard and Jim Rebbe assisted in 

the legal analysis, Jean McSween provided methodological support, and 

Jonathan McMurray assisted in report development. 

 Faith-Based and Community Initiative

Staff 

Acknowledgments 

(130451) 
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