United States General Accounting Office

GAO Report to the Chairman, Committee on

Government Reform and Oversight,

House of Representatives

January 1996 DEFICIT REDUCTION

Better Targeting Can

Reduce Spending and

Improve Programs and

Services

GAO/AIMD-96-14

GAO United States

General Accounting Office

Washington, D.C. 20548

Accounting and Information

Management Division

B-266015 

January 16, 1996

The Honorable William F. Clinger, Jr.

Chairman, Committee on

 Government Reform and Oversight

House of Representatives

Dear Mr. Chairman:

You asked us to summarize previously issued GAO work suggesting better

targeting of federal programs and services as a strategy for downsizing

government. In previous reports,1

 we have identified instances in which

individuals, organizations, and jurisdictions outside the population

originally targeted for assistance have received program funds, service

benefits, or tax subsidies. As agreed with your office, this letter presents

examples illustrating better targeting in a wide range of federal programs

and services and discusses targeting in general.

Results in Brief Targeting is a promising approach to deficit reduction that can bring about

both reduced spending as well as improved federal programs and services.

When resources are poorly targeted, the federal government spends more

money than needed to reach its intended audience and achieve program or

service goals. Moreover, in a climate of large budget deficits, the

inefficiencies resulting from poorly targeted programs and services have

sometimes called into question the legitimacy of continuing these

activities or maintaining them at their current levels.

The question of whether funding for particular programs should be

reduced and the allocation of resources altered are issues for the Congress

to decide. Regardless of the form increased targeting takes, some

beneficiaries of federal programs will receive less funding and resources,

while others could receive somewhat more. In some cases, increased

targeting would be wholly consistent with stated legislative and program

objectives. In other cases, however, the Congress would need to refocus

these objectives to be consistent with how it wishes to shift resources.

As the Congress examines federal programs and considers how to meet its

deficit reduction goals, our past work suggests many different kinds of

1

See Addressing the Deficit: Budgetary Implications of Selected GAO Work for Fiscal Year 1996

(GAO/OCG-95-2, March 15, 1995) and Deficit Reduction: Opportunities to Address Long-Standing

Government Performance Issues (GAO/T-OCG-95-6, September 13, 1995).

Page 1 GAO/AIMD-96-14 Targeting Beneficiaries
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programs and services for which resources could be better targeted.

Examples include the following:

• Formulas for grants to state and local governments, such as the Maternal

and Child Health block grant formula, could be revised to better reflect

differences in the fiscal capacity of recipient jurisdictions to fund the

program from their own resources as well as differences in jurisdictions’

needs for the program. If grant funding were reduced, this strategy could

permit lower overall funding while simultaneously reallocating remaining

grant funds more equitably.2

• Eligibility rules for federal benefit programs, such as the Market

Promotion Program, could be altered to restrict or reduce benefits going

to some groups or individuals without altering program or service

objectives.

• Fees could be instituted for individuals, groups, and/or industries that

directly consume certain kinds of government-provided, business-type

services (for example, inspections, claims processing, or recreation). In

addition, existing charges, such as those applied to private ski operators

using federal land, could be increased in these business-type activities so

that a greater portion of the activity costs are borne by the direct

beneficiaries.

• Tax preferences, such as those given to state and local governments that

issue industrial development bonds (IDBs), could be narrowed or

eliminated by revising eligibility criteria and/or limiting the amount of the

preference allowable.

Scope and

Methodology

As agreed with your office, we limited our examination of targeting

opportunities to our published work. To answer your questions about

whether targeting can help the federal government downsize and to

provide illustrative examples of a targeting strategy for deficit reduction,

we updated information from our March 1995 report on the budgetary

implications of our work.3

 At this date, the Congress is considering several

of the options described in this report. Notwithstanding pending

congressional actions, we included the options because they illustrate how

2

An equitable allocation of federal assistance to state and local governments is promoted when grant

formulas reflect three dimensions of need: (1) the number of people potentially eligible for services

under a given grant program, (2) the cost of providing such services, and (3) the ability of state and

local taxpayers to support the nonfederal share of financing such services. Funding formulas that

reflect these three dimensions would promote an equitable allocation of federal resources in the sense

that if all states imposed taxes at comparable rates, comparable services would be available to those

with similar needs.

3

GAO/OCG-95-2, March 15, 1995.

Page 2 GAO/AIMD-96-14 Targeting Beneficiaries
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targeting can fit in an effective deficit reduction strategy. That report

presents a deficit reduction framework consisting of three broad themes.

The first focuses on reassessing the objectives of federal programs and

services. Our premise is that periodically reconsidering a program’s

original purpose, the conditions under which it continues to operate, and

its cost-effectiveness is appropriate. The second focuses on improved

targeting of federal programs and services to beneficiaries. This theme

concerns how efficiently federal programs and services reach their

intended recipients. The third focuses on improving the efficiency of

program and service delivery. This theme suggests that focusing on the

approach or delivery method can significantly reduce spending or increase

collections.

This letter expands on the second theme—improved targeting—as a

strategy that allows for reducing the deficit while improving the design of

federal government activities. We did this work in Washington, D.C., from

August 1995 through October 1995.

Applying the

Targeting Framework:

Illustrative Examples

The following examples from our work illustrate potential opportunities to

better target federal programs and services. Examples are detailed under

one of four strategies for better targeting the intended beneficiaries: revise

grant formulas, change eligibility rules, target fees and charges, and

narrow tax preferences.

Revise Grant Formulas At a time when federal domestic discretionary resources are constrained,

better targeting of grant formulas offers a strategy to concentrate lower

federal spending levels on states or localities with greater needs and lower

capacity to absorb grant reductions. Through this process, federal funding

reductions would fall more heavily on those communities with lesser

relative needs and with greatest fiscal capacity to finance services from

their own revenue base. We have issued many reports over the past

decade showing that the allocation of federal grants to state and local

governments is not well targeted. This work has been confirmed by many

economic analyses from other sources.4

 As a result, program recipients in

areas with relatively lower needs and greater wealth received a higher

level of services than those available in harder pressed areas, or wealthier

areas were able to provide the same level of services at lower tax rates.

4

See, for example, Federal-State-Local Fiscal Relations, U.S. Treasury Department, Office of State and

Local Finance, (Washington, D.C.: 1985).

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Reductions in federal grants to states could be targeted by adjusting the

allocation formulas to concentrate funding on those states with relatively

lesser fiscal capacities and greater needs. Similarly, reductions in federal

grants to local governments could be targeted by either concentrating cuts

on areas with the strongest tax bases or by changing program eligibility to

restrict grant funding in places with high fiscal capacity and/or few

programmatic needs.

Maternal and Child Health

Services Block Grants

For example, in 1992 we reported that Maternal and Child Health (MCH)

Services block grants could be allocated more equitably.5

 This program

was designed to secure basic health care for low-income and

moderate-income expectant mothers, their infants, and children with

special health care needs. However, our report concluded that the

allocation method for distributing MCH grants to states ran counter to the

equity standards we developed. We found that while the number of

children at risk, the costs of providing maternal and child health services,

and the states’ ability to pay for these services varied from state to state,

the current MCH allocation method did not consider these factors. As a

result, Louisiana—with the second highest proportion of children at risk

and average service costs—ranked 14th in per capita grant funding.

Similarly, at the time of our analysis, Kansas and Illinois received nearly

equal per capita grants, even though Illinois had about 28 percent higher

health care costs. In practical terms, this meant that Illinois consumers

had to spend more money than Kansans to buy the same MCH services.

We concluded that a new MCH allocation method that strikes a balance

between each state’s (1) need adjusted for costs and (2) ability to pay

could substantially improve the overall equity of the MCH program. Federal

spending for the MCH program reached a reported $687 million in fiscal

year 1994. If overall funding for this program were reduced, such a new

allocation method could help target the remaining MCH program funds

more equitably.

Medicaid Program Formula In another example, we found that the Medicaid program formula does not

target most federal funds to states with weak tax bases and high

concentrations of poor people.6

 In 1990, we reported that while the

program covered 75 percent of those below the poverty line nationwide,

the coverage varied from 37 percent in Idaho to 111 percent in Michigan.

5

Maternal and Child Health: Block Grant Funds Should Be Distributed More Equitably (GAO/HRD-92-5,

April 2, 1992).

6

Medicaid Formula: Fairness Could Be Improved (GAO/T-HRD-91-5, December 7, 1990) and Medicaid:

Alternatives for Improving the Distribution of Funds to States (GAO/HRD-93-112FS, August 20, 1993).

Page 4 GAO/AIMD-96-14 Targeting Beneficiaries
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We suggested that a formula using better indicators of states’ financing

capacities and poverty rates coupled with a reduced minimum federal

share would more equitably distribute the burden state taxpayers face in

financing Medicaid benefits for low-income residents in their respective

states.

Federal spending for Medicaid in fiscal year 1994 reached a reported

$82 billion, and the Office of Management and Budget (OMB) projects

spending to reach $136.5 billion by fiscal year 2000. Should the Congress

act to reduce federal Medicaid spending, a revised grant allocation system

could help target the reduced funding more equitably. Along these lines, a

block grant that the Congressional Budget Office (CBO) estimated would

reduce federal Medicaid spending by $163 billion over the next 7 years was

included in the recently passed Balanced Budget Act of 1995. Under this

proposal future Medicaid costs would be reduced and equity in the

distribution of the remaining funding would be improved because the

allocation formula uses new factors that more precisely measure

differences in states’ fiscal capacity and poverty levels.

Title I Grants to Local

Educational Agencies

In another example, Title I grants to local educational agencies (LEAs),

which fund supplementary education services for low achievers in poverty

areas, could be modified to improve targeting among counties. Under

these grants, formerly known as Chapter 1 grants, school districts have

broad discretionary powers to determine how resources are distributed to

schools, specifying the grades served and the type and extent of services,

and defining which students are low achievers. In 1992, we reported that

these factors resulted in considerable variation among students who

receive Title I LEA services.7

 For example, in some school districts Title I

LEA funds served only children scoring below the 20th percentile on

standardized tests. In other districts, program funds served some children

scoring above the national average (the 50th percentile).

We found that the legislatively mandated formula for Title I LEA grants did

not (1) accurately reflect the distribution of poverty-related low achievers,

(2) provide extra assistance to areas with relatively less ability to fund

remedial education services, or (3) adequately reflect differences in local

costs of providing education services. We concluded that modifications to

the Title I LEA allocation method could target more funds to counties with

the largest numbers of poverty-related low achievers and those least able

to finance remedial instruction.

7

Remedial Education: Modifying Chapter 1 Formula Would Target More Funds to Those Most in Need

(GAO/HRD-92-16, July 28, 1992).

Page 5 GAO/AIMD-96-14 Targeting Beneficiaries
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Federal funding for Title I grants to local educational agencies reached a

reported $6.3 billion in fiscal year 1994. If the Congress decides to reduce

funding for these grants, a revised formula could better target Title I LEA

grants to those counties with the greatest overall need. The formula could

be revised to rely on a more precise method of estimating the number of

poverty-related low achievers, use an income adjustment factor to grant

additional assistance to areas least capable of financing remedial

instruction, and employ a uniform measure of educational services costs

that recognizes differences within and between states.

Change Eligibility Rules Changing eligibility rules to better target the intended beneficiaries of

federal programs offers another strategy that can allow for deficit

reduction by concentrating reductions on beneficiaries with little

demonstrable need for government assistance. We have issued many

reports in recent years showing that programs could be better targeted to

more cost-effectively address those beneficiaries most in need.

Vaccines for Children Program For example, we found that the Vaccines for Children (VFC) Program is not

well targeted.8

 This program was created to improve immunization rates

for measles, mumps, rubella, and other childhood diseases by lowering the

cost of immunization for all children. However, we found that most

children had already been immunized because cost was not a significant

barrier and that a disproportionate number of children in underserved

areas were not immunized. We suggested that the Congress consider

targeting the program. Services could be improved by directing VFC funds

to children in those particular geographic areas where underimmunization

has been a persistent problem. Fiscal year 1995 costs for the childhood

vaccine program were estimated at about $450 million.

Market Promotion Program Based on our examinations of the Market Promotion Program (MPP), we

believe that the program’s eligibility rules could be tightened to provide

support to small, generic, new-to-export companies, but not to large

companies with substantial corporate advertising budgets.9

 The MPP uses

federal funds to subsidize efforts to expand export markets for U.S.

agricultural products by financing such activities as advertising and

consumer promotions. From 1986 through 1994, about one-third of MPP

funds and those of its predecessor program (the Targeted Export

8

Vaccines for Children: Reexamination of Program Goals and Implementation Needed to Ensure

Vaccination (GAO/PEMD-95-22, June 15, 1995).

9

International Trade: Changes Needed to Improve Effectiveness of the Market Promotion Program

(GAO/GGD-93-125, July 7, 1993).

Page 6 GAO/AIMD-96-14 Targeting Beneficiaries
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Assistance (TEA) program) supported private for-profit companies’

brand-name promotions. These companies included many large for-profit

businesses with substantial corporate advertising budgets, such as Sunkist

Growers and E.J. Gallo Winery. In fiscal year 1995, MPP funding was

reduced to $84.5 million from the budgeted level of $110 million.

Eligibility rules could be revised to ensure that MPP funds are supporting

additional promotional activities rather than simply replacing company or

industry funds. While large firms receive MPP funds to increase exports of

U.S. agricultural products, the resources otherwise available to such firms

may indicate that they have no demonstrable need for government

assistance.

Crop Price Supports Our reviews of U.S. Department of Agriculture crop price supports show

that the program’s eligibility rules allow producers to avoid payment limits

and reduced program payments.10 These income support payments, known

as deficiency payments, are the principal payments made to producers

who participate in farm programs for wheat, feed grains, cotton, and rice.

The payments are designed to protect producers’ incomes when crop

prices fall below a legally established target price. The Food Security Act

of 1985 limited the payments for those commodities to $50,000 per person

annually. For the act’s purposes, a person is broadly defined as an

individual, an entity (such as a corporation, limited partnership,

association, trust, or estate), or a member of a joint operation (such as a

general partnership or joint venture). Despite reforms made by the

Congress in 1987, producers have avoided the payment limit by

reorganizing their farming operations to include additional persons.

According to OMB, deficiency payments amounted to $6.4 billion in fiscal

year 1994. One option to further tighten payment limits as a means to

reduce program costs would be to change eligibility rules to limit

payments to $50,000 per individual and only provide benefits to individuals

actively engaged in farming.

Veterans Disability

Compensation

In another example, narrowing eligibility rules for veterans disability

compensation could generate savings without affecting veterans who

suffered disabilities as a result of military service. In 1994, CBO reported

that about 250,000 veterans were receiving about $1.5 billion annually in

Department of Veterans Affairs (VA) compensation for diseases neither

caused nor aggravated by military service. Our study of five other

10Agriculture Payments: Number of Individuals Receiving 1990 Deficiency Payments and the Amounts

(GAO/RCED-92-163FS, April 27, 1992) and Agriculture Payments: Effectiveness of Efforts to Reduce

Farm Payments Has Been Limited (GAO/RCED-92-2, December 5, 1991).

Page 7 GAO/AIMD-96-14 Targeting Beneficiaries
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countries’ veterans programs shows that they do not compensate veterans

under these circumstances.11 Dollar savings could be achieved by targeting

disability benefits more narrowly, as is done by other countries.

Target Fees and Charges to

Beneficiaries for

Business-type Government

Activities

Adjusting fees and charges to the beneficiaries of some business-type

federal programs and services offers a third targeting strategy to reduce

the deficit. Fees exist for many services provided by the federal

government, including customs and other inspections, use of recreation

and other facilities, and mail delivery. However, in many cases, the direct

beneficiaries of these kinds of governmental activities contribute little to

support the program or administrative costs of the activity. As a result, the

programs and services are often overused and/or under-provided, and

money must be found elsewhere in the budget to make up the difference

between administrative costs and beneficiary charges.

Child Support Enforcement

Program

For example, although many beneficiaries of the Child Support

Enforcement Program have higher incomes than the population originally

envisioned to be served by this program they pay relatively little to

support the program’s administrative costs. The Congress created the

Child Support Enforcement Program in 1975 to strengthen state and local

efforts to obtain child support for both families eligible for Aid to Families

with Dependent Children (AFDC) and non-AFDC families. Child support

enforcement services were made available to non-AFDC individuals because

it was believed that many families might not have to apply for welfare if

they had adequate assistance in obtaining the support due from the

noncustodial parent.

In 1994, the program collected a reported $7.3 billion for 8.2 million

non-AFDC clients. Bureau of the Census data for 1991 showed that about 65

percent of the individuals requesting non-AFDC child support enforcement

services in that year had family incomes, excluding any child support

received, exceeding 150 percent of the federal poverty level. Because

states have exercised their discretion to charge only minimal application

and service fees, they are doing little to recover the federal government’s

66-percent share of program costs. In fiscal year 1994, state fee practices

returned $33 million of the reported $1.1 billion spent to provide non-AFDC

services. Rising non-AFDC caseloads and new program requirements could

lead to administrative costs exceeding $1.6 billion by fiscal year 2000, with

very little offset from those benefiting from the services.

11Disabled Veterans Programs: U.S. Eligibility and Benefit Types Compared With Five Other Countries

(GAO/HRD-94-6, November 24, 1993).

Page 8 GAO/AIMD-96-14 Targeting Beneficiaries
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We have reported and testified on opportunities to defray some of the

costs of child support programs.12 Based on this work, we believe that

mandatory application fees should be dropped and that states should

charge a minimum percentage service fee on successful collections for

non-AFDC families. Under this proposal, non-AFDC beneficiaries would pay

an increased share of the costs of administering this program.

Veterans’ Long-term Care As a second example, veterans’ long-term care costs could be reduced and

comparability among retirees increased if veterans’ copayments for these

services were increased. All veterans with a medical need for nursing

home care are eligible to receive such care in VA and community facilities

to the extent that space and resources are available. VA is required to

collect a fee, commonly known as a copayment, from certain veterans

with nonservice-connected problems and incomes above a designated

level. Nursing home care is free for other veterans who receive care in VA

or contract community nursing homes. By contrast, we found that state

veterans’ homes recovered as much as 50 percent of the costs of operating

their facilities through charges to veterans receiving services.13 Similarly,

through estate recoveries during the 12 months ending June 30, 1992,

Oregon recovered about 13 percent of the costs of nursing home care

provided under its Medicaid program. However, in fiscal year 1990, the VA

offset less than one-tenth of 1 percent of its costs through beneficiary

copayments.

OMB reported that in fiscal year 1994, VA’s operating expenses were about

$1.7 billion to provide nursing home and domiciliary care to veterans. The

Congress may wish to consider increasing cost sharing for VA nursing

home care by adopting cost-sharing requirements similar to those imposed

by most state veterans’ homes and by implementing an estate recovery

program similar to those operated by many states under their Medicaid

programs. The potential for recoveries appears to be greater within the VA

system than under Medicaid. Home ownership is significantly higher

among VA hospital users than among Medicaid nursing home recipients,

and veterans living in VA nursing homes generally contribute less toward

the cost of their care than do Medicaid recipients, allowing veterans to

build larger estates.

12Child Support Enforcement: Opportunity to Defray Burgeoning Federal and State Non-AFDC Costs

(GAO/HRD-92-91, June 5, 1992) and Child Support Enforcement: Opportunity to Reduce Federal and

State Costs (GAO/T-HEHS-95-181, June 13, 1995).

13VA Health Care: Offsetting Long-Term Care Costs by Adopting State Copayment Practices

(GAO/HRD-92-96, August 12, 1992).

Page 9 GAO/AIMD-96-14 Targeting Beneficiaries
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Ski Fee System In another example, we found that the current ski fee system does not

ensure that the Forest Service receives fair market value for the use of its

land.14 In 1991, privately owned ski areas operating on Forest Service

land—such as those in Vail, Colorado; Jackson Hole, Wyoming; and Taos,

New Mexico—generated $737 million in gross sales. After making

adjustments reflecting the revenues generated from federal land, these

areas paid about $13.5 million, or about 2.2 percent of the total revenues

generated, in fees to the government. When the Forest Service ski fee

system was developed in 1965, the rates were to be adjusted periodically

to reflect changes in economic conditions for these business-type

operations. However, the rates by which fees are calculated have not been

updated since the fee system was developed.

Narrow Tax Preferences Changing eligibility rules for tax preferences offers a fourth targeting

strategy to reduce the federal budget deficit. While tax expenditures can

be a valid means for achieving certain federal objectives, studies by GAO

and others have raised concerns about the effectiveness, efficiency, and

equity of some tax expenditures. As with poorly targeted fees, poorly

targeted tax preferences often lead to overutilization by beneficiaries and

reduced revenues that either add to the deficit or must be made up

elsewhere in the budget.

Industrial Development Bonds For example, tax-exempt industrial development bonds (IDBs) are poorly

targeted. IDBs are issued by state and local governments to finance the

creation or expansion of manufacturing facilities to create new jobs or to

promote start-up companies or companies in economically distressed

areas. However, in a review of IDB-funded projects, we found that only

about one-fourth of the projects were located in economically distressed

areas.15 We also found that the job creation benefits attributed to IDBs

would likely have occurred anyway. In addition, most developers

contacted said that they would have proceeded with their projects without

IDBs. Moreover, few companies obtaining tax subsidized financing were

start-up companies. OMB estimated that revenue loss due to the tax exempt

status of small issue IDBs reached $690 million in fiscal year 1994.

Qualified Mortgage Bonds Similarly, we found that achievement of public benefits from qualified

mortgage bonds (QMBs) is questionable. We found that QMBs did little to

14Forest Service: Little Assurance That Fair Market Value Fees Are Collected From Ski Areas

(GAO/RCED-93-107, April 16, 1993).

15Industrial Development Bonds: Achievement of Public Benefits Is Unclear (GAO/RCED-93-106,

April 22, 1993).

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increase home ownership, were usually provided to home buyers who did

not need them to obtain a conventional (unassisted) mortgage loan, and

were not cost-effective.16 OMB estimated that revenue loss due to the

tax-exempt status of QMBs amounted to $1.76 billion in fiscal year 1994.

Both IDBs and QMBs could be better targeted. For example, IDBs could be

focused on economically distressed areas or start-up companies, and QMBs

could be directed toward home buyers who could not reasonably qualify

for unassisted conventional loans.

Tax Treatment of Health

Insurance

In another example, the current tax treatment of health insurance gives

few incentives to workers to economize on purchasing health insurance.17

Some analysts believe that the tax-preferred status of these benefits has

contributed to the overuse of health care services and large increases in

our nation’s health care costs. Improved targeting for this subsidy could

play a role in reducing the associated revenue losses and improving the

efficiency of the nation’s health care system.

Targeting is a viable approach because higher income employees are more

likely to have health care coverage and, because they pay higher marginal

tax rates than low-income earners, the tax benefits from

employer-provided health benefits are greater for high-wage earners. The

Department of the Treasury estimated that revenue loss due to the

tax-exempt status of employer-provided health insurance amounted to

$33.5 billion in fiscal year 1992. An option to better target this tax

preference would be to place a cap on the dollar amount of health

insurance premiums that could be excluded from income. Including in a

worker’s income the dollar amount over the cap could improve the

efficiency of the health care system and, to a lesser extent, tax equity.

Alternatively, including health insurance premiums in income but allowing

a tax credit for some percentage of the premium would improve equity

since tax savings per dollar of premium would be the same for all

taxpayers, irrespective of the tax brackets.

16Home Ownership: Limiting Mortgage Assistance Provided to Owners With High-Income Growth

(GAO/RCED-90-117, September 26, 1990).

17Tax Policy: Effects of Changing the Tax Treatment of Fringe Benefits (GAO/GGD-92-43, April 7,

1992).

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Targeting Can Allow

for Deficit Reduction

While Improving

Programs and

Services

As the examples from our published work show, more effective targeting

is one of several available approaches that can allow for reducing

spending while improving federal programs and services. Programs and

services, such as grants to states to provide health care for low- and

moderate-income individuals or export promotion support for emerging

firms, are created due to some perception of eligibility and/or need. In

these instances, individuals, organizations, or jurisdictions outside the

original targeted population—that is, populations with a greater capacity

to provide the program or service from their own resources or having

fewer needs—have received program funds, services, or tax subsidies.

This poor targeting may have occurred because grant formulas or

eligibility rules were constructed too broadly or fees did not fully reflect

beneficiaries’ capacity to offset program costs. In other instances, the

circumstances creating a need for the program or service may have

changed.

The end result of poor targeting is that the federal government spends

more money than needed to reach the intended beneficiaries and achieve

its program or service goals. Moreover, in a climate of continuing large

budget deficits, the inefficiencies resulting from poorly targeted programs

and services have sometimes called into question the legitimacy of

continuing these activities or maintaining them at their current levels.

In many instances, broad support remains for the objectives of poorly

targeted programs and services. In these areas, better targeting can

increase the efficiency and effectiveness of the program or service while

allowing for program reductions. In other cases, poor targeting raises

fundamental questions about the program’s or service’s merit and/or

feasibility. In these circumstances, decisionmakers may want to consider

whether the program or service should be eliminated.

We are sending copies of this report to the Ranking Minority Member of

the House Committee on Government Reform and Oversight. Copies will

be available to others upon request. Major contributors to this report were

Page 12 GAO/AIMD-96-14 Targeting Beneficiaries
B-266015 

Margaret T. Wrightson, Assistant Director, and Timothy L. Minelli, Senior

Evaluator. Please contact me at (202) 512-9573 if you or your staff have

any questions concerning the report.

Sincerely yours,

Paul L. Posner

Director, Budget Issues

(935187) Page 13 GAO/AIMD-96-14 Targeting Beneficiaries
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