Rural Economic Development: More Assurance Is Needed That Grant Funding Information Is Accurately Reported
Published: 2006-02-24T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: GAO was asked to update its 1989 report on the distribution of economic development funding using newer tools now available for measuring the distribution of federal funds to rural areas. GAO agreed to (1) identify federal economic development programs, (2) determine the best way to identify rural areas for this report, (3) determine the amount and share of economic development funding that rural areas receive, and (4) discuss the way federal agencies report data on economic development funding.
section_title: What GAO Found
paragraphs: Based on prior GAO reports, other research studies, and information provided by federal program officials and external rural development groups, GAO developed a list of activities as criteria to identify economic development programs. This list included job creation, infrastructure development, and other activities that are generally acknowledged to directly affect overall economic growth. Using this list, GAO identified 86 federal programs in 10 federal agencies and 3 regional commissions and authorities that provide economic development funding. Because federal agencies use different criteria as to what constitutes rural, determining how much funding has targeted rural areas required determining which method of defining rural was the best for tracking funding. Classification systems that can track funding data at the census tract level or below can better differentiate between rural and urban areas because they better reflect the economic and social diversity than do county-based systems that are based on political boundaries. Because limitations in the data did not allow tracking all the funding data to local levels, GAO used a system that used population and commuting relationships to classify census tracts and then classify each county as rural or urban based on the county's dominant commuting pattern. The 86 programs in 2002-2004 provided approximately $200 billion in total economic development funding, about $150 billion of which could be tracked to the county level or below. However, the amount of funding provided to rural areas varied widely by program, agency, state, and region. These calculations were complicated by significant problems with the data from the programs that federal agencies were reporting to Census. Although all federal agencies are required to submit obligations data for their programs quarterly, 44 of the programs GAO analyzed did not report any data or reported incomplete or inaccurate data for all or part of fiscal years 2002, 2003, or 2004. As a result, the reported obligations were off by more than $11 billon. Further, some 19 programs provided no information on obligations of about $4.5 billion, and another 25 programs reported amounts that varied significantly from actual obligations. The FAADS reporting requirement has been in place since 1982. But a lack of knowledge among program officials about the requirement and poor oversight has affected compliance with it.

section_title: Letter
paragraphs: In response to a congressional request, we issued a report in 1989 that  sought to determine the portion of overall federal economic development  funding that was being directed to rural areas to ensure that rural America  is not left behind. Our 1989 report sought to determine how much of $29  billion in economic development funding from 88 programs in 1987 had  gone to rural counties.  In that report, we defined rural counties as those  counties with urban populations of less than 20,000 (based on the 1980  Census)—a definition that was widely accepted at the time. We found that  while about 16 percent of the population lived in rural counties, those  counties received about 17 percent of the funding for the programs for  which we were able to report data.
Since our report was issued, researchers have developed more exact  methods of differentiating flows of federal funds between rural and urban  areas. The new systems generally rely on census tracts, which are far more  numerous than counties, and use software programs to “geocode,” or track,  federal funding to that level. Because of these developments and ongoing  concerns about the amounts rural areas have been receiving compared  with their urban counterparts, you asked us to update our 1989 report and  examine the share of economic development funds that support rural areas  today.
Examining this question requires defining and identifying what constitutes  an economic development program, defining what constitutes a rural area,  and obtaining and analyzing data on federal funding provided to these  programs. As we reported in 1989 and again in 2000, there is a lack of  agreement on the definition of “economic development.” As a result, we  agreed to (1) develop a way to identify federal economic development  programs, (2) determine which system of classifying geographical areas as  rural or urban best suits the purposes of this report, (3) use the economic  development framework and classification system to identify rural areas  and report the amount and share of economic development funding these  areas have received, and (4) examine issues related to reporting  requirements for federal agencies that disburse economic development  funds.
We identified economic development programs using the same list of  economic development activities that we used for our 2000 report,  supplemented by activities we identified through other research studies  and information provided by federal program officials and external rural  development groups. Using this list as our criteria, we identified about 135  programs from the Catalog of Federal Domestic Assistance (CFDA) that  appeared to fit our framework. We discussed these programs and our  reasons for choosing them with the administering federal agencies,  regional commissions, and regional authorities. Based on those discussions  and a more detailed review of the programs, we modified our framework  somewhat and reduced the number of programs to 86. We then attempted  to obtain obligation data for each of the programs from the Federal  Assistance Award Data System (FAADS), which is maintained by the U.S.  Census Bureau (Census) for the Office of Management and Budget (OMB)  and used to prepare the annual Consolidated Federal Funds Report  (CFFR). If we found that agencies were reporting inaccurate or  incomplete data to FAADS, in most cases we obtained the corrected data  directly from the federal agencies and regional commissions and  authorities. Following a recommendation we made in 2004 on defining  rural areas, we used a classification system that is based on characteristics  at the census tract level and geocoded the data to differentiate between  rural and urban areas. We compared our findings using both this new  system and the system that we used in our 1989 report. Appendix I contains  a full description of our scope and methodology.
We conducted our review from January 2005 through December 2005 in  accordance with generally accepted government auditing standards.
subsections: section_title: Background
paragraphs: According to the National Academy of Public Administration, federal  participation in economic development evolved during the 20th century.  Economic development programs implemented during the 1930s  characteristically involved direct federal action, bypassing state and local  governments. During the 1940s and 1950s, these programs were intended to  improve housing and commercial districts in central cities. In the 1960s, the  federal government created programs to provide economic development  assistance to economically distressed areas. These programs were  expanded in the 1980s and 1990s to utilize new technologies to create new  transit systems, clean up hazardous waste sites, and carry out other  economic development activities in urban and rural areas. Most recently,  economic development initiatives have included the revitalization of  disaster areas, including lower Manhattan after the September 11, 2001,  terrorist attacks and the Gulf Coast after the 2005 hurricane season.
A variety of federal programs and federally funded regional commissions  and authorities have helped advance economic development in  communities throughout the United States, including many communities  that are considered rural. Most of the nationwide programs do not have  specific rural economic development objectives, but the regional  commissions and authorities target economic rural areas specifically. For  this reason, a narrow definition of economic development programs that  only included those focusing exclusively on rural areas would include few  programs and limited dollars.
The nationwide programs also do not have a standard definition of  economic development. Department of Commerce officials, for example,  consider economic development programs as those that save or create  jobs. U.S. Department of Agriculture (USDA) officials consider economic  development broadly as activities that increase economic opportunities  and improve residents’ quality of life. Officials at other federal agencies,  including the Department of Defense (DOD), the Department of  Transportation (DOT), and the Department of Housing and Urban  Development (HUD), said that they did not have definitions of economic  development.
Like the concept of economic development, the notion of what constitutes  rural and urban areas has evolved over several decades, partly in response  to changes in residential and commuting patterns. As the cities and suburbs  have expanded and more remote areas have become accessible,  distinctions between rural and urban areas have blurred. Federal agencies  use different criteria as to what constitutes a rural area. Depending on the  agency and the program, the criterion most often used to define rural areas  is population, especially at USDA, which uses varying thresholds ranging  from 2,500 or less to 50,000. Some agencies and programs that fund  economic development activities do not focus on serving rural or urban  areas but instead provide competitive or formula-based grants to eligible  applicants from any location.
FAADS is a centralized reporting system that OMB established in April 1980  to gather and disseminate information on the domestic financial assistance  provided by federal agencies. Authorized by the Consolidated Federal  Funds Report Act of 1982, FAADS is a quarterly report of financial  assistance awards made by each federal agency. OMB has designated  Census as its executive agent to manage and operate the system, which the  Congress and public officials use for policy and trend analyses, revenue  forecasting, oversight, and legislative initiatives. Federal agencies and  regional commissions and authorities that administer financial assistance  programs are required to report quarterly to FAADS on the financial  assistance awards they make.
section_title: Economic Development Programs Fund Activities Related to Job and Business Creation, Infrastructure, and Markets
paragraphs: Because federal agencies do not have a standard definition of what  constitutes economic development, we developed a list of activities that  were generally accepted as being directly related to economic  development. As agreed with your office, we based our framework on our  prior work, a review of other research studies, and discussions with federal  officials and rural development groups. We also held discussions with the  administering federal agencies, regional commissions, and regional  authorities to reach consensus on the activities and programs we selected.
Our framework includes nine economic development activities:   planning and developing strategies for job creation and retention;  constructing and renovating commercial buildings;  establishing business incubators (facilities to help small businesses get   developing infrastructure by constructing and repairing roads, water  and sewer systems, and airports;  promoting the development of new markets for existing products;   developing telecommunications and broadband infrastructure and  enabling technology transfer; and  developing and improving areas for tourism.
The first five activities listed above, with the exception of developing  airports, are from our 2000 report. That list was developed based on a  general consensus of officials from (1) the Department of Commerce’s  Economic Development Administration, whose mission is to help  economically distressed areas, (2) other federal agencies involved with  economic development, and (3) several national associations familiar with  economic development. For this report, we confirmed the 2000 list with  officials from the same federal agencies and organizations and also reached  a general consensus on the four additional items. In general, we focused on  activities that directly affected the overall development of an area, such as  job creation, rather than on activities that improved individuals’ quality of  life, such as housing and education. However, we did include job training  that had a direct impact on economic development by, for example,  preparing employees for work in a specific industry or business in a  particular area.
We identified 86 federal programs at 10 federal agencies and 3 regional  commissions that included one or more of the activities in our economic  development framework. Many of these programs were not labeled as  economic development programs, but some of their activities suggested  that they supported this goal. For example:  The goal of USDA’s Empowerment Zone and Enterprise Community  program for rural areas is to stimulate the creation of new jobs,  particularly for the disadvantaged and long-term unemployed, and to  revitalize economically distressed rural areas.
The Department of the Interior’s (Interior) Bureau of Indian Affairs  Facilities Operations and Maintenance program provides funding for  basic services at noneducational facilities located on reservations.
The Department of Commerce’s Trade Adjustment Assistance program  provides assistance to firms and industries adversely affected by  increased imports.
The Appalachian Regional Commission, which oversees the  Appalachian Development Highway System, aims to open up areas with  development potential where commerce and communication have been  inhibited by lack of adequate access.
The number of programs each agency and commission administered that  met one or more of the components of our economic development  framework varied from one at the Denali Commission—established in 1998  to address the needs of rural Alaska—to 29 at USDA. We included only  economic development programs that received funding during our review  period (fiscal years 2002 to 2004). Thus, we did not include programs such  as DOD’s base closing economic assistance programs because DOD  reported no obligations for these programs during those years. Appendix II  contains more detailed information on each of the 86 programs.
section_title: We Identified Rural Areas Using a System Based on Population and Commuting Patterns with Census Tracts
paragraphs: Since our 1989 report, which used county-level data to classify rural and  urban areas, a variety of more sophisticated classification systems have  been developed that use census tracts to differentiate between rural areas  and urban areas. These classification systems provide a more precise way  of differentiating between rural and urban areas than county-based  systems. Further, computer software programs can now geocode federal  funding data below the county level. Due to data limitations that only  allowed us to identify subcounty level recipients for about half of the  funding, we chose to use a system developed in 2001 which relies on both  population and commuting patterns of census tracts to classify each county  as rural or urban based on the counties dominant commuting patterns.  Although this approach does not fully resolve all the classification  problems inherent in county-based systems that are based on political  boundaries rather than demographic characteristics, it allowed us to  geocode most of the data and was most comparable to census population  data.
We considered a number of county-based and subcounty systems for  analyzing the data (table 1).
We found shortcomings with most of these systems. For example:  Many studies that have evaluated the rural share of federal programs,  including our 1989 report, have used the rural-urban continuum codes  devised by the Economic Research Service (ERS) of the USDA. These  codes distinguish counties by their degree of urbanization and proximity  to a metropolitan area or areas. While using rural-urban continuum  codes allows geocoding at the county level, the results are often  skewed, particularly in the western states, where counties often are very  large. For example, using this approach, more than 50 percent of the  nation’s rural population would live in counties that would be  considered urban (based on the 2000 Census).
Urban influence codes, which were developed by ERS in 1993 as a way  to measure rurality by quantifying the influence of urban areas on rural  areas, use only county-level data and are based solely on urban factors.  As a result, the classifications are heavily skewed toward urban.
Beginning in the 1990s, ERS and other organizations have developed  subcounty classification systems that attempt to better capture differences  between rural and urban areas. These subcounty classification systems  include elements such as commuting zones and labor market areas that are  more precise than the county level systems in order to capture the  economic and social diversity of rural areas. Some use census tracts  (about 62,000) or other geographic areas smaller than counties (about  3,000) that can better reflect rural-urban differences.
Census’s urbanized areas and urban cluster system defines rural areas by  exclusion—that is, it views as rural all areas that it has not already  identified as urban. Census defines urbanized areas as continuously built  up areas with a population of at least 50,000 and compromising one or  more places and adjacent densely settled areas. Urban clusters are densely  settled territories with at least 2,500 but fewer than 50,000 people.  Collectively, urbanized areas and urban clusters are referred to as urban  areas and essentially depict densely settled territory as it may appear from  the air (see fig. 1).
On the basis of these definitions, data from the 2000 Census suggest that 59  million Americans (20 percent of the population) reside in rural areas. As  we reported in our 2004 report, using urbanized areas and urban clusters is  an effective way to make consistent eligibility determinations for individual  rural economic development programs when data is available at the census  tract level. However, we found that our ability to track funds to the local  level varied significantly across agencies. For example, while rural housing  and most other USDA program data could be geocoded to the local level,  most DOT spending could be tracked only to the counties. Thus, while  geocoding data using urbanized areas and urban clusters would effectively  show rural and urban differences, limitations with the data would only  allow us to geocode about half of the data under this classification system.
Ultimately, we chose the dominant RUCA system, developed by the  Washington State Office of Community and Rural Health in 2001, because it  uses both census tracts and county codes to determine which areas are  rural. Using this system we were able to code 99 percent of the economic  development funding. The dominant RUCA system is based on the 10- tiered subcounty RUCA system developed by ERS in conjunction with the  Department of Health and Human Services (HHS) in the late 1990s. RUCA  reflects both where people live and work by using both population and  commuting relationships to classify census tracts. The dominant RUCA  system classifies each county as rural or urban based on the dominant  commuting patterns.
Figure 2 shows a map of the rural and urban areas as defined by both the  census tracts on which the RUCA codes are based and by the dominant  RUCA system that we used due to the data limitations.
Although the census tract RUCA code map better reflects where people live  and work, using the dominant RUCA system we determined that 19 percent  of the U.S. population resided in rural areas. This figure is comparable to  the 20 percent figure cited in the 2000 Census.
The rural-urban continuum classification system does not explicitly define  rural. However, the rural-urban continuum codes can be combined to  create rural and urban designations. (See fig. 3.)
For example, in our 1989 report we defined as rural any county whose  urban population was less than 20,000 people. Using this definition, slightly  more than 10 percent of the U.S. population resides in rural areas, or only  half the 20 percent rural figure cited in the 2000 Census.
section_title: The Amount of Economic Development Funding Rural Areas Received Varied across Programs, Agencies, States, and Regions
paragraphs: The 86 economic development programs we identified that met one or  more of the criteria from our list of economic development activities  provided about $200 billion in funding to the 50 states and Washington, D.C.  for fiscal years 2002 through 2004. We were able to use geocoding to track  about $150 billion of those dollars to the county level or below. We could  not track beyond the state level another $50 billion that was passed through  state capitals to county and local jurisdictions because we could not  identify final recipients. If we had geocoded the funding for pass-through  programs at the state capitals, the share of spending associated with urban  areas—where state capitals are typically located—would have been  overstated. For the approximately $150 billion that we could geocode to  the county level or below, our analysis showed that during fiscal years 2002  through 2004, rural areas received more economic development program  assistance dollars per capita than their urban counterparts. The overall  shares of funding varied by the administering program and agency, and by  the state and region receiving the money, with rural areas receiving a  greater share of the funding in some cases and urban areas in others.
When we analyzed economic development funding by program, we found  wide variations in the percentage of funding that went to rural areas. The  funding ranged from a high of 100 percent for the Interior’s Improvement  and Repair of Indian Detention Facilities Program down to about 1 percent  for DOT’s Transit Planning and Research Program and HUD’s Brownfields  Economic Development Initiative. The programs with the highest  percentage of rural funding tended to be from USDA, whose funding  decisions are primarily based on specific definitions of rural, and from  Interior and the commissions and authorities whose programs serve rural  areas. In contrast, HUD, the Environmental Protection Agency (EPA), and  DOL were among the agencies with the lowest percentage of funding  reaching rural areas who also had significant pass-through dollar amounts.
Most program funding by these agencies to eligible applicants is done using  a formula or on a competitive basis without differentiating between rural  and urban areas.
USDA had the most programs providing economic development funding for  rural areas, but DOT provided the largest amount of economic  development funding overall (fig.4). DOT also accounted for the largest  overall amount of pass-through dollars ($37.9 billion), but higher  percentages of funds from EPA, DOL, and HUD were sent to state capitals.  We were unable to track 88 percent of EPA’s funding, 79 percent of DOL’s,  or 75 percent of HUD’s below the state level, and excluded those dollars  from our analysis. Examples of programs that we could not track below the  state level are DOL’s Employment Service program and EPA’s capitalization  grants for clean water and drinking water.
Figure 5 shows the approximately $150 billion in economic development  funding that we could track below the state level by agency under both the  dominant RUCA and rural-urban continuum models during fiscal years  2002–2004. Under both models, the amount of federal agency, regional  commission, or authority funding to rural areas varied widely. For example,  using the dominant RUCA model we found that the amounts provided to  rural areas ranged from 7 percent or less for the portion of DOL and EPA  funding we could track to about 58 percent for USDA and 77 percent for  the Delta Regional Authority.
The share of economic development funding that rural areas received also  varied by state. Under the dominant RUCA model, the shares varied from  85 percent of the total funding in Wyoming to 3 percent in Massachusetts.  Figure 6 shows the percentage of economic development funding in each  state that went to rural areas.
The amounts also varied by region of the country. As shown in figure 7,  rural residents in the western states generally received more economic  development funding per capita than residents in the mid-Atlantic and  midwest states. For example, Alaska and North Dakota residents received  more than $1,200 a year during fiscal years 2002 through 2004, while  residents of all states east of the Mississippi River received $800 or less per  year during the same time period.
Detailed information on the share of federal economic development  funding that rural areas received, listed by program, agency, state, and  county under both the dominant RUCA and rural-urban continuum  classification systems, can be viewed at www.gao.gov/cgi-bin/getrpt?GAO- 06-436sp.
section_title: Data Submitted to Census Were Often Inaccurate and Incomplete
paragraphs: OMB requires that all federal agencies submit financial assistance award  data to Census for their programs on a quarterly basis, but our review  showed that the data submitted were often inaccurate and that some data  were missing altogether. We worked with Census officials to find the  reasons for the incorrect and missing data, and ultimately we received  corrected information from seven agencies and three commissions. With  these corrections, we determined that the data were sufficiently reliable for  our analysis. The agencies involved took a number of significant actions in  order to provide corrected data for the programs we reviewed, and these  actions should improve FAADS reporting in the future.
During our review, which covered fiscal years 2002 through 2004, we  looked at the quarterly files of standardized records that FAADS maintains  on financial assistance awards made by federal agencies. For those  programs for which information had been submitted to FAADS, we  checked the amounts against agency obligation data provided by the  agency or the CFDA record. When we found significant discrepancies, we  contacted the agencies to determine the reasons for these differences. If  the FAADS data were deemed incorrect, in most cases we obtained  corrected information from the agencies and replaced the FAADS  information with that data for our analysis. In cases where the discrepancy  could not be resolved, we used the agency obligations data provided to us  by the agency.
We found that for 44 of the 86 economic development programs included in  our analysis, the administering agencies either did not report any funding  data or reported incomplete or inaccurate data to FAADS during all or part  of fiscal years 2002 through 2004. Total obligations that were reported to  Census during those years for these programs were off by more than $11  billion, including obligations of about $4.5 billion for 19 programs (22  percent) that had not been reported at all, and a total of about $7 billion for  25 programs that was either over- or underreported. The programs we  reviewed accounted for less than 10 percent of the federal programs that  should be providing obligation information to FAADS. Since the FAADS  reporting requirements are the same for all federal agencies and  commissions that administer financial assistance programs—not just those  involved in economic development—the amount of unreported and  misreported funding is likely far greater than the $11 billion we identified  during our review.
Even though the FAADS reporting requirement has been in place since  1982, for the agencies we reviewed, several factors affected the extent of  compliance with the FAADS requirements. These factors included:  a lack of controls and resources at Census to determine whether  agencies were actually submitting the data,       a lack of knowledge among program officials about the FAADS   poor oversight and coordination at the agencies responsible for  ensuring both compliance with the reporting requirement and the  accuracy of the data submitted.
A Census official noted that, over the years, Census has worked with  agencies to increase reporting compliance, but with limited success.  Because we identified so many programs for which data had not been  reported to FAADS, we worked with agency officials to identify the  agencies’ reasons for not submitting the information. The agencies were  either unaware of the requirements, did not have computer databases  containing the necessary information, or were using expenditure instead of  obligation data. Several program officials subsequently instituted  corrective actions to improve FAADS reporting, and these improvements  should eventually be reflected in the annual CFFR.
subsections: section_title: Census Cannot Assure Compliance with FAADS Reporting Requirements
paragraphs: Our review showed that Census could not ensure that federal agencies  were complying with the FAADS reporting requirements. According to our  Standards for Internal Control in the Federal Government and related  documents, an agency’s system of internal control should include  appropriate measures that will ensure the validity, accuracy, and  completeness of the data in agency systems and capture erroneous data  that can then be reported, investigated, and promptly corrected. However,  according to a Census official, a lack of resources had kept the bureau from  establishing an effective system to monitor whether agencies were  submitting the required information. Further, Census does not have an  adequate process for determining whether an agency has failed to report  particular program data in a given year.
Although Census prepares quarterly compliance reports showing whether  agencies are meeting their reporting requirements, the reports we reviewed  did not capture the extent of the misreporting we found. While Census  officials told us that they had attempted to “persuade” agencies to submit  data in the past, it became apparent from our findings that the effect of  these efforts had been limited. During the course of our review, we talked  with Census officials about the significant lack of compliance with FAADS  reporting requirements, and officials from Census and OMB held several  discussions about the problem. The culmination of these discussions was a  meeting held in April 2005 between OMB, Census, and most of the agencies  responsible for reporting information to FAADS. The purpose of the  meeting was to allow OMB and Census to explain to the agencies the  importance of submitting their obligation information on all programs on a  quarterly basis as required. In addition, in June 2005, officials from the two  agencies met with representatives of HUD to emphasize the need for  compliance and accurate reporting, and in November 2005 Census and  OMB held a second multiagency meeting.
Even after this renewed emphasis on compliance and accurate reporting,  Census officials told us that some agencies had continued to submit  improper data that were not necessarily reliable, forcing Census to devote  staff resources to cleaning up the information. For example, the officials  said that even though they had frequently pointed out data problems to  HUD, the same errors kept occurring with each submission. HUD officials  told Census and OMB staff at a June 2005 meeting that they would try to  improve their reporting accuracy. According to a HUD official, the agency  was commended by OMB at the November 2005 multiagency meeting for  reducing its error rate by half. However, Census officials told us that while  HUD’s progress is commendable, HUD’s error rate remains higher than that  of most agencies.
section_title: Federal Agency Staff Lacked Knowledge about FAADS Reporting Requirements
paragraphs: A number of federal program officials who had not submitted FAADS  information to Census were not aware that they were required to do so. In  fact, a number of federal agency and regional commission officials told us  that they had never heard of FAADS. As shown in table 2, CFDA program  funding not reported to Census for fiscal years 2002, 2003, or 2004,  accounted for about $4.5 billion.
In the following examples of nonreporting that we found during our review,  the agency officials involved were not familiar with FAADS:  Staff at two of the three regional commissions and authorities we  included in our analysis had never heard of FAADS or the CFFR and  were not aware of the reporting requirements. We provided information  to these officials about FAADS and the Census’s involvement in  collecting the data. Between the two organizations, more than $340  million had not been reported to FAADS during our 3-year review  period. As a result of our discussions about FAADS, officials at both  commissions said that they would contact Census and begin reporting  the information.
Two different HUD program officials noted that they were not familiar  with FAADS or the requirements to submit quarterly data. As a result,  for fiscal year 2002 more than $50 million dollars in funding provided by  the Brownfields Economic Development Initiative and the Rural  Housing and Economic Development program was not reported to  FAADS.
A DOD program official was not familiar with FAADS and was only  vaguely familiar with his program’s CFDA number. As a result, $53  million in program obligations was not reported in fiscal years 2002  through 2004. Initially, the FAADS data we received directly from DOD  indicated that the program had received no funding for the 3 years we  included in our review. However, subsequent discussions with the DOD  official revealed that this particular program had about $53 million in  obligations for fiscal years 2002 through 2004 that was not reported to  FAADS and reflected in the CFFR.
section_title: A Lack of Oversight and Coordination at Federal Agencies Caused Inaccurate Reporting to FAADS
paragraphs: While other program managers were aware of the FAADS reporting  requirements, the information they submitted to Census was either  incomplete or inaccurate, resulting in the misreporting of another  approximately about $7 billion dollars from various agencies during fiscal  years 2002 through 2004. Several factors affected the quality of the  reporting. First, in some cases data from several programs were combined.  Second, program officials sometimes did not capture all the necessary  information. And finally, agencies lacked the controls needed to ensure that  all of the programs and the correct data were submitted, resulting in  significant over- and underreporting of obligations.
The following examples show some of the different scenarios that affected  the completeness and accuracy of agencies’ submissions to FAADS:   Although the Appalachian Regional Commission had four separate  CFDA program numbers, for many years the agency had submitted all of  its information under one program. As a result, three CFDA program  accounts showed no funding, even though each represented a distinct  program. We also determined that the amount of funding data submitted  to FAADS appeared to be more than $30 million higher than the  Appalachian Regional Commission’s annual appropriation in fiscal year  2002 and more than $4 million higher than the Commission’s fiscal year  2003 appropriation. The Appalachian Regional Commission  subsequently determined that it had counted a portion of its FAADS  submission twice and agreed to submit revised data that would  reapportion its data correctly among the four CFDA program accounts  and correct for the over-counting. These changes should lower its fiscal  year 2002 total by more than $31 million, and its fiscal year 2003 total by  $4.5 million. Also, the Appalachian Regional Commission told us that it  has instituted internal controls to prevent duplicate submissions to  FAADS and to prevent the reporting of all investments under one CFDA  number.
Interior had not updated its “cross-walk” of internal data codes that is  intended to keep current with changes in the CFDA. As a result, Interior  had underreported its FAADS data by nearly $56 million for fiscal years  2002 and 2003. The staff member in charge of reporting to FAADS told  us that he had learned that some of his data codes were out of date only  after we questioned some inaccuracies in the data. Interior has since  rerun its data with the new codes and planned to resubmit corrected  information to Census for fiscal year 2004.
Also, Interior’s Outdoor Recreation, Acquisition, Development and  Planning program reported to FAADS obligations amounting to about  $64 million. Data we subsequently obtained from the agency showed  obligations totaling more than $290 million. An agency official explained  that until recently, there had been no monitoring of the information  submitted to FAADS.
HUD has consistently submitted to FAADS expenditure rather than  obligation data. When questioned about this practice, a HUD official  told us that the agency’s systems were set up to capture expenditure  data. We found significant differences between expenditures and  obligations in the funding information for two of the six HUD programs  we evaluated. HUD met with Census and OMB in June 2005 about the  issue and was considering ways to change its system to supply the  required obligations data. Subsequently, another HUD official told us  that a new system that would collect and report program obligation data  rather than expenditure data to Census would be operational some time  during 2006.
We questioned a FAADS submission by HHS for the department’s Native  American programs for fiscal year 2002 because the more than $82  million in obligations reported for that year totaled more than three  times the $26.2 million budget for this program. For fiscal year 2003, the  $37 million reported to FAADS was about $16 million more than the  $20.8 million actual obligation amount provided to us by HHS. For fiscal  year 2004, the $37 million reported to FAADS was about $13 million  more than the $23.9 million reported to us by HHS. An HHS official said  that she could not explain the discrepancies.
For HHS’s Health Care and Other Facilities program, the FAADS  submission for Fiscal Year 2002 totaled $620 million—more than $300  million more than what HHS’s internal system showed. An HHS official  agreed that the appropriate figure for the year was about $314 million  and said that HHS planned to review its data system to correct the  discrepancy.
We also questioned the figure of $1.3 billion that HHS reported for its  Community Services Block Grant Discretionary Awards program for  fiscal year 2002, because the department’s internal grant-tracking  system showed a figure of about $55 million. After looking into the  discrepancy, an HHS official indicated that the department had for  several years mistakenly combined the Community Services Block  Grant program and the Discretionary Awards program under the  Discretionary Awards CFDA program number. However, the $1.3 billion  total reported to FAADS also appeared to be incorrect, as the total  obligations for the two programs combined in fiscal year 2002 was about  $700 million—about $600 million less than what was reported to Census.  HHS has agreed to correct the discrepancy, beginning with its fiscal year  2006 submission.
The Small Business Administration (SBA) did not include in its FAADS  submission the funding for a special loan program under its Small  Business Loan program that was set up to assist the World Trade Center  area after the September 11, 2001, terrorist attacks. As a result, the  agency’s obligations were underreported by about $828 million for fiscal  year 2003 and about $3.1 billion for fiscal year 2004. According to an  SBA official, the agency will review the data that it provides to FAADS  more closely in order to avoid such discrepancies in the future.
According to the Census official who oversees the FAADS program, most  of the agency staffs who submitted the data to Census had very little  involvement with program operations, adding that the individual program  managers who were most knowledgeable about the data’s accuracy and  completeness generally did not get involved. OMB has required since fiscal  year 1982 that agency officials review and sign off on a compliance form  when submitting quarterly data. The form contains a series of statements,  including one that reads, “All agency financial assistance award programs  are covered in agency’s FAADS sources.” However, the official we spoke  with who oversaw the program and had been involved with it since 1996  said that he had never seen a compliance form accompanying a quarterly  report. It appeared that neither Census nor OMB was enforcing the  requirement. Both Census and OMB staff told us that OMB had previously  considered amending its guidance (Circular A-89) on reporting financial  assistance data to specifically require that each agency appoint an official  responsible for certifying that the FAADS data were accurately reported to  Census. However, at the time of our review, the guidance had not been  amended.
Officials in a number of agencies commented about the lack of controls for  submissions of data to FAADS and told us that requiring data certification  would likely improve data quality. For example, one FAADS coordinator  noted that the agency had no internal control checks in place to determine  which programs should report cost information in any particular quarter or  whether program personnel were submitting the required cost information.  Other agency officials indicated that their agencies had no controls over  FAADS data, including having individuals responsible for certifying that the  data submitted was correct. Finally, one USDA official noted that USDA  had been recording some FAADS information manually rather than through  an electronic system but added that the agency is expected to automate the  data collection system in 2006.
section_title: Conclusions
paragraphs: The federal government funds a wide variety of programs that provide rural  areas with economic development money. These programs provide  assistance that directly supports communities’ economic well-being  through such activities as creating and helping to retain jobs; constructing  and repairing roads, airports, and water systems; establishing business  incubators; and developing and improving tourist areas. Exactly how much  assistance rural areas receive from the various economic development  programs depends on how “rural” is defined, a definition which is  constantly changing as advances in transportation, computer technology,  and telecommunications—along with the spread of suburbia—continue to  blur many of the distinctions between rural and urban life. We found that  the amount of economic development funding provided to rural areas  varied widely by program, agency, state, and region.
However, both the Congress and the public are at a disadvantage in trying  to assess the exact levels of funds rural areas receive because agencies  have not provided accurate funding data for economic development  programs. Our review showed that the data were often inaccurate or had  not been reported at all. As a result, the information published by Census in  reports issued to the Congress and the general public for the programs we  examined was off by billions of dollars. We reviewed fewer than 10 percent  of the programs that are required by OMB to provide obligation information  to Census. Because the reporting requirements do not differ for the  remaining 90 percent or more of the programs that are required to report to  FAADS, the accuracy of the remaining program data are likely  questionable. OMB has recently begun to meet with agency officials to  improve agency reporting, and several agencies have agreed to implement  changes that should ensure more accurate and complete compliance. Such  efforts should improve the data submitted to FAADS. But the types of  errors we identified will persist unless OMB emphasizes the importance of  establishing improved controls at the agencies and at Census, including  requirements that agencies certify their FAADS submissions and that  Census notify agencies when significant errors occur.
section_title: Recommendations
paragraphs: To better ensure that Census receives accurate funding information from  federal agencies, OMB should consider improving its oversight of  compliance with FAADS reporting requirements. We recommend that the  Director of the Office of Management and Budget:   regularly reach out to individual agencies on FAADS reporting  requirements and on ways to improve the quality of the data provided to  Census, and  amend its guidance to require agency officials to certify the accuracy  and completeness of their FAADS data reported to Census, and   provide support to Census with its work in notifying agencies that do  not report or significantly misreport their FAADS data.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided Commerce and OMB with a draft of this report for review and  comment. The Deputy Secretary of Commerce provided written comments  that are provided in appendix III. OMB provided oral comments, stating  that it agreed that improvements are needed in the FAADS reporting  process. OMB officials said that they would continue to regularly reach out  to individual agencies on FAADS reporting requirements, and when  requested by Census, will provide support in notifying agencies that do not  report or significantly misreport their FAADS data. They also said that they  would discuss the need for having higher-level agency officials certify  FAADS data submitted to Census at their next agencywide outreach  meeting in April 2006.
The Deputy Secretary of Commerce wrote that the Census generally agrees  with the report’s conclusions and recommendations and that the  difficulties GAO encountered with FAADS provide insights into the breadth  and depth of the complexities involved for its staff in collecting, analyzing,  and tabulating this large governmentwide data set. He wrote that the  department will work with OMB and the individual reporting agencies to  identify additional resources and streamlined methodologies to make  future data more complete and accurate.
The Census official who oversees FAADS provided us with oral comments  that expanded on the Deputy Secretary’s comments, stating that he agreed  with the need for OMB to regularly outreach to individual agencies and to  require agency officials to certify the accuracy and completeness of data  reported to FAADS. He also agreed that there is a need to identify and  notify agencies that do not report or significantly misreport their FAADS  obligation data, and noted that his office has been routinely reporting  problems to agencies. However, he said that his office needs more support  from OMB to succeed in this area. For example, he said that Census  contacted 12 federal agencies in mid-September 2005 informing them about  significant data problems with their fiscal year 2004 FAADS data  submissions, including many of the items we reported as missing in this  report. However, he said that 7 of the 12 agencies did not respond in any  way as to how they planned to correct the types of discrepancies in the  future. In light of this new information, we revised our recommendation to  acknowledge that OMB should provide additional support to Census in  notifying agencies that do not report or significantly misreport their FAADS  obligation data.
In addition to the comments we obtained from OMB and Commerce, we  also obtained technical comments from most of the other agencies and  commissions included in our review. We incorporated the comments in the  report as appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from its  issuance date. At that time we will send copies of the report to interested  members of Congress and congressional committees. We will also send  copies of this report to the Secretary of the Department of Commerce and  the Director of the Office of Management and Budget and we will make  copies available to others upon request. In addition, detailed information  about the share of federal economic development funding by program,  agency, state, and county will be available at no charge on the GAO website  at www.gao.gov/cgi-bin/getrpt?GAO-06-436sp.
If you or your staff have any questions concerning this report, please  contact me at (202) 512-4325 or at shearw@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on the  last page of this report. Key contributors to this report are listed in  Appendix IV.
section_title: Scope and Methodology
paragraphs: To examine the share of federal economic development funds that support  rural areas today, we (1) developed a framework for identifying federal  economic development funding; (2) determined the most informative  classification system for differentiating between rural and urban areas; (3)  used the economic development framework and classification system to  identify rural areas and report the amount and share of economic  development funding these areas have received; and (4) examined federal  agencies’ reporting of economic development funds. We interviewed  officials from the U.S. Departments of Agriculture (USDA), Commerce  (Commerce), Defense (DOD), Housing and Urban Development (HUD),  Labor (DOL), Health and Human Services (HHS), Interior (Interior), and  Transportation (DOT). We also interviewed officials from the Small  Business Administration (SBA), Environmental Protection Agency (EPA),  Appalachian Regional Commission, Denali Commission, and Delta  Regional Authority.
Because there is no commonly accepted definition of what constitutes  federal economic development, we developed a framework for discussing  economic development using our prior reports and research studies by the  National Council for Urban Economic Development, the Progressive Policy  Institute, the Cornell Community and Rural Development Institute, and the  Northeast-Midwest Institute‘s Center for Regional Policy. We also used  information provided by federal program officials and external rural  development groups, including the Aspen Institute Community Strategies  Group, the Sonoran Institute, the Southern Rural Development Initiative,  and the Progressive Policy Institute. We then used the framework to define  activities that were generally accepted as being related to economic  development and reviewed program descriptions from the Catalog of  Federal Domestic Assistance (CFDA) to assess which programs fostered or  assisted with economic development. We originally identified about 135  programs and held discussions with the administering agencies, regional  commissions, and authorities on our framework and the programs  selected. Based on those discussions we modified our framework and  eliminated programs that did not meet the modified framework. In some  cases we obtained more detailed information on programs beyond that in  the CFDA program descriptions. We settled on 86 programs to include in  our analysis.
In finalizing the framework, we focused on economic development  activities that directly affect the overall development of an area— particularly saving or creating jobs—rather than on activities that improve  individuals’ quality of life, such as housing or general education. For  example, we did include job training that had a direct impact on economic  development in an area by, for example, preparing employees for a specific  industry or business located in a particular area. However, we did not  include general educational programs, housing loan programs, research  and development programs, or other programs that do not directly impact  the economic development of an area.
To examine federal agencies’ reporting of economic development funds, we  reviewed the extent to which agencies reported information to the Federal  Assistance Award Data System (FAADS) for the 86 programs we selected  for review during fiscal years 2002 through 2004. FAADS produces a  quarterly file of standardized records on financial assistance awards made  by federal agencies. Each transaction record identifies, by CFDA program  code number, the type and amount of financial assistance, the type and  location of the recipient, and the geographic place of performance. We  assessed the reliability of the FAADS data by (1) performing electronic  testing of the required data elements for obvious errors in accuracy and  completeness, (2) comparing program totals by fiscal year to similar data  from the Consolidated Federal Funds Report (CFFR) database, (3)  reviewing related documentation, and (4) interviewing the Census Bureau  official knowledgeable about the data.
For those programs for which information had been submitted to FAADS,  we checked the amounts against agency obligation data provided by the  agency or the CFDA record. When there were significant discrepancies, we  contacted the agencies to determine the reasons for the discrepancies. If  the FAADS data were deemed incorrect, in most cases we obtained the  corrected information from the agencies and replaced the FAADS  information for our analysis. In cases where the discrepancy could not be  resolved, we used the agency obligations data provided to us by the agency.  Because HUD had submitted expenditure data instead of obligation  information as required by FAADS, we obtained obligation information  from HUD on each of the programs included in our analysis. In addition to  the more than 20 programs for which we identified discrepancies, we also  identified another 20 programs for which the agencies had not submitted  any information to FAADS for one or more of fiscal years 2002 through  2004. For each of these programs, we contacted agency staff to determine  why no information had been submitted to FAADS and what the obligation  information amounts were for each of the fiscal years. Also, because the  FAADS data provides detailed information on program recipients, such as  zip codes, we requested that each agency provide us with similar  information on program recipients so that we could geocode the  information.
Once we created the final database of spending for the 86 programs, we  used the information in the file to identify the locality that received the  funds. However, for approximately 50 percent of the funding, we could not  identify a recipient below the county level. Based on this finding and  consultations with USDA’s Economic Research Service, we decided to  analyze the dollars flowing to rural areas using the dominant Rural-Urban  Commuting Area (RUCA) approach. RUCA data is based on census tracts,  but the State of Washington’s Office of Community and Rural Health has  developed a system to classify counties based on their dominant RUCA  code if census tract data is not available. In order to produce county-level  RUCA estimates, we applied this approach to the entire country by  assigning dominant RUCA categories to every county. These analyses  allowed us to classify every county as urban or rural. Using the county-level  RUCA file, we were able to assign a dominant RUCA code to over 99  percent of the program dollars. We also classified every county as urban or  rural using ERS’s rural-urban continuum system, including those counties  considered completely rural or that contained urban populations of less  than 20,000 as rural counties, and other counties as urban counties.
Another data issue involved pass-through programs, or programs for which  the data showed the recipient to be the state government. For most of these  programs, state governments subsequently passed these funds through to  counties or local governments. However, we could not identify the  subsequent recipients. Using the CFDA program descriptions, we  determined that 12 of 86 programs appeared to meet this criterion, along  with the portion of the highway spending program that went to state  governments. For example, both DOT’s Formula Grants Program for Other  than Urbanized Areas and HUD’s Community Development Block Grant/  State’s program showed no funding going to rural areas. Both these  programs pass through funding to rural areas, but the data only coded the  funding to the state capitals. If we had geocoded funding for such pass- through programs, the share of spending associated with urban areas,  where state capitals are typically located, would have been overstated.  Excluding the pass-through funding reduced the total spending we  analyzed from about $200 billion to about $150 billion.
Significant noncompliance by a number of agencies that had failed to  submit obligation information for one or more programs, restricted our  ability to use the CFFR database to identify how all economic development  program funds were dispersed. While the reliability of the databases used  by Census to prepare the CFFR has been tested, we did not know the  extent to which agency data we obtained and analyzed directly from the  agencies were reliable. As a result, we contacted agency officials to  determine the controls used to ensure that the data they provided to us  were reliable and accurate. Specifically, we requested information  concerning the accuracy and completeness of the data, the use of the data  in developing financial statements about the programs, and any reviews or  audits of the quality of the data. The respondents indicated that the data  were correct and told us why they believed the information was accurate.  In addition, we questioned whether agency staff was aware of the FAADS  reporting requirements and in some cases requested data directly from  agencies. While the data we received directly from agencies were generally  not as comprehensive as the CFFR requires, we found that the information  was sufficient for our purposes.
We conducted our review from January 2005 through December 2005 in  accordance with generally accepted government auditing standards.
section_title: Funding Data for Selected Federal Programs That Fund Economic Development Activities
paragraphs: The following table lists each agency program by CFDA number and  program objective, the source we used to obtain fiscal year 2002-2004  funding data, and whether or not missing or corrected data was obtained  from the agency.
To bring private non-industrial forest land  under intensified management; to  increase timber production; to assure  adequate supplies of timber; and to  enhance other forest resources through a  combination of public and private  investments on the most productive sites  on eligible individual or consolidated  ownership of efficient size and operation.
To stimulate technological innovation in  the private sector, strengthen the role of  small businesses in meeting Federal  research and development needs,  increase private sector commercialization  of innovations derived from USDA  supported research and development  efforts, and foster and encourage  participation, by women-owned and  socially disadvantaged small business  firms in technological innovation.
To improve the quality of life in rural  America by supporting and maintaining a  network of State Rural Development  Councils  that create and facilitate cross- program collaborations.
To assist public or private nonprofit  organizations interested in providing sites  for housing; to acquire and develop land  in rural areas to be subdivided as  adequate building sites and sold on a  cost-development basis to families eligible  for low- and very-low-income loans,  cooperatives, and broadly based nonprofit  rural rental housing applicants.
To develop the capacity and ability of  private, nonprofit community-based  housing and community development  organizations, and low income rural  communities to improve housing,  community facilities, community and  economic development projects in rural  areas.
A foreign market access program that  provides funding for generic technical  assistance activities which take place  abroad.  The program provides cost- share assistance to small- and medium- sized U.S. agriculture and agribusiness  organizations that desire to promote,  enhance or expand the exports of U.S.  agricultural commodities and products  into eligible low-and middle-income  foreign countries.
With respect to nonfederal forest and  other rural lands, to assist in the  advancement of forest resources  management; the encouragement of the  production of timber; the control of insects  and diseases affecting trees and forests;  the control of rural fires; the efficient  utilization of wood and wood residues,  including the recycling of wood fiber; the  improvement and maintenance of fish and  wildlife habitat; and the planning and  conduct of urban and community forestry  programs.
To share receipts from the national forests  with the states in which the national  forests are located.
To share receipts from national  grasslands and land utilization projects  with the counties in which the national  grasslands and land utilization projects  are located.
Provide accelerated assistance to rural  communities faced with acute economic  problems associated with federal, state, or  private sector resource management  decisions and policies that are located in  or near a national forest and are  economically dependent upon forest  resources.  Aid is extended to these rural  communities to help them develop  strategic action plans to diversify their  economic base and to improve the  economic, social, and environmental well- being of rural areas.
To help rural areas analyze and assess  forest resource opportunities, maximize  local economic potential through market  development and expansion, and diversify  communities’ economic base.
To provide funds, on a cost-share basis,  for the construction of demonstration  modern timber bridges and modern  timber bridge technology transfer projects.   Primary focus is to assist in the  development and commercialization of  new technologies that incorporate  underutilize timber and related resources  to the extent that is economically feasible.
To assist small forest products  businesses, community leaders,  entrepreneurs, non-profits, and others  turn small diameter and underutilized  wood species into marketable forest  products, including biomass energy.   Programs may include:  (1) technical  assistance for processing and  manufacturing of small diameter or low  value hardwoods and softwoods; (2)  prototype development of potential new  products; (3) demonstration projects that  showcase innovative uses for small  diameter and low-value hardwoods and  softwoods; (4)economic feasibility  assessments related to using small  diameter and low-valued hardwoods and  softwoods; and (5) market assessments  for using small diameter and low-valued  hardwoods and softwoods.
To provide basic human amenities,  alleviate health hazards, and promote the  orderly growth of the rural areas of the  nation by meeting the need for new and  improved rural water and waste disposal  facilities.
Through the Emergency Community  Water Assistance Grant program, the  Rural Utility Service (RUS) is authorized  to help rural residents who have  experienced a significant decline in  quantity or quality of water to obtain  adequate quantities of water that meet the  standards of the Safe Drinking Water Act.
To construct, enlarge, extend, or  otherwise improve community facilities  providing essential services to rural  residents.
Intermediary Re-lending  To finance business facilities and  community development.
To assist public, private, or cooperative  organizations (profit or nonprofit), Indian  tribes or individuals in rural areas to  obtain quality loans for the purpose of  improving, developing or financing  business, industry, and employment and   improving the economic and  environmental climate in rural  communities including pollution  abatement and control.
To facilitate the development of small and  emerging private business, industry, and  related employment for improving the  economy in rural communities.
To provide water and waste disposal  facilities and services to low-income rural  communities whose residents face  significant health risks.
To establish and operate centers for rural  cooperative development to improve  economic conditions in rural areas by  promoting the development of new  cooperatives and/or the improvement of  existing cooperatives.
To provide for the establishment of  empowerment zones and enterprise  communities in rural areas to stimulate  the creation of new jobs, particularly for  the disadvantaged and long-term  unemployed, and to promote the  revitalization of economically distressed  areas.
To promote sustainable economic  development in rural communities with  exceptional needs.
To assure that people in eligible rural  areas have access to electric services  comparable in reliability and quality to the  rest of the nation.
To assure that people in eligible rural  areas have access to telecommunications  services comparable in reliability and  quality to the rest of the nation.
To provide supplemental financing to  extend and improve telecommunications  services in rural areas.
To promote rural economic development  and job creation projects, including  funding for project feasibility studies, start- up costs, incubator projects, and other  reasonable expenses for the purpose of  fostering rural development.
To encourage and improve the use of  telemedicine, telecommunications,  computer networks, and related advanced  technologies to provide educational and  medical benefits through distance  learning and telemedicine projects to  people living in rural areas and to improve  rural opportunities.
To provide assistance to rural  communities with extremely high energy  costs.
To promote long-term economic  development in areas experiencing  substantial economic distress and  investments to support the construction of  rehabilitation of essential public  infrastructure and develop facilities  necessary to generate high-skill, higher- wage jobs and private investment.
To help states, sub-state planning units,  Indian Tribes, and/or local governments  strengthen economic development  planning capability and formulate and  establish comprehensive economic  development, process and strategies  designed to reduce unemployment and  increase incomes.
To promote economic development and  alleviate underemployment and  unemployment in distressed areas by (1)  enlisting the resources of designated  university centers in promoting economic  development, (2) supporting innovative  economic development projects, (3)  disseminating information and studies of  economic development issues of national  significance, and (4) financing feasibility  studies and other projects leading to local  economic development.
To assist state and local interests design  and implement strategies to adjust or  bring about change to an economy.   Program focuses on areas that have  experienced or are under threat of serious  structural damage to the underlying  economic base.  Such economic change  may occur suddenly or over time, and  generally results from industrial or  corporate restructuring, new federal laws  or requirements, reduction in defense  expenditures, depletion of natural  resources, or natural disaster.  Aids the  long-range economic development of  areas with severe unemployment and low- family-income problems; aids in the  development of public facilities and  private enterprises to help create new,  permanent jobs.
To provide trade adjustment assistance  for firms and industries adversely affected  by increased imports.
To establish, maintain, and support  manufacturing extension centers and  services that improve the competitiveness  of firms by accelerating the usage of  appropriate manufacturing technology by  smaller U.S.-based manufacturing  companies.  To also partner with states to  develop such technical assistance  programs and services.
To assist various organizations identified  by Congress to achieve objectives  specified by Congress.
To increase assistance by the DOD for  eligible entities by furnishing Procurement  Technical Assistance to business entities,  and to assist eligible entities in the  payment of the costs of establishing and  carrying out new programs and  maintaining existing programs.
To assist local governments or states, on  behalf of local governments, to undertake  community economic adjustment- planning activities to respond to military  base closures and realignments.
To develop viable urban communities by  providing decent housing; a suitable living  environment; and expanding economic  opportunities, principally for persons of  low and moderate income.
To develop viable urban communities by  providing decent housing; a suitable living  environment and expanding economic  opportunities, principally for persons of  low and moderate income.
To provide for the establishment of  Empowerment Zones, Enterprise  Communities and Renewal Communities  in urban and rural areas, to stimulate the  creation of new jobs empowering low- income persons and families receiving  public assistance to become economically  self-sufficient, particularly for the  disadvantaged and long-term  unemployed and to promote revitalization  of economically distressed areas.
To return brownfields to productive use by  assisting public entities eligible under the  Section 108 Loan Guarantees program to  carry out qualified economic development  projects.  Grant assistance must enhance  the security of loans guaranteed under  the Section 108 program or improve the  viability of projects financed with loans  guaranteed under the Section 108  program.
To provide communities with a source of  financing for economic development,  housing rehabilitation, public facilities, and  large-scale physical development  projects.
To expand the supply of affordable  housing and access to economic  opportunities in rural areas.
To assist Indian tribes and Alaska Native  villages in the development of viable  Indian communities.
To provide limited routine maintenance on  paved, gravel, earth, and unimproved  roads, bridges, and airstrips.
To assist and support the inventory and  prudent development of energy and  mineral resources on Indian lands.
To promote conserving, developing, and  using fish, wildlife, and recreational  resources for the sustenance, cultural  enrichment, economic support, and  maximum benefit of Indians.
To provide funds for basic operating and  maintenance services of non-education  facilities that are owned or operated by  the Bureau of Indian Affairs and located  on reservations.
To provide safe, functional, code-and- standards compliant, economical, and  energy-efficient adult and/or juvenile  detention facilities.
To assist federally recognized Indian tribal  governments, Native American  organizations, and individual American  Indians in obtaining financing from private  sources to promote business  development initiatives on or near  federally recognized Indian reservations.
To manage recreational resource values  on the public lands administered by the  Bureau of Land Management and to  increase public awareness and  appreciation of those values.
To implement the National Fire Plan and  assist communities at risk from  catastrophic wildland fires by providing  assistance in the following areas:  provide  community programs that develop local  capability including:  assessment and  planning, mitigation activities, and  community and homeowner education  and action; plan and implement  hazardous fuels reduction activities on  federal land or on adjacent nonfederal  land that mitigate the threat of  catastrophic fire to communities and  natural resources in high risk area;  enhance local and small business  employment opportunities for rural  communities; enhance the knowledge  and fire protection capability of rural fire  districts by providing assistance in  education and training, protective clothing  and equipment purchase, and mitigation  methods on a cost -hare basis.
To provide financial assistance to the  states and their political subdivisions for  the preparation of Statewide  Comprehensive Outdoor Recreation  Plans and acquisition and development of  outdoor recreation areas and facilities for  the general public, to meet current and  future needs.
To assist persons to secure employment  and labor market information by providing  a variety of job search assistance and  labor market information services without  charge to job seekers and to employers  seeking qualified individuals to fill job  openings.
To assist sponsors, owners, or operators  of public-use airports in developing a  nationwide system of airports adequate to  meet the needs of civil aeronautics.
To assist state transportation agencies in  planning and developing an integrated,  interconnected transportation system by  constructing and rehabilitating the  National Highway System, including the  Interstate System; and for transportation  improvements to all public roads except  those functionally classified as local; to  provide aid for the repair of federal-aid  roads following disasters; to foster safe  highway design; to replace or rehabilitate  deficient or obsolete bridges; and to  provide for other special purposes.
To provide funds to the States to develop  and maintain recreational trails and trail- related facilities for both non-motorized  and motorized recreational trail use.
To improve, initiate, or continue public  transportation service in non-urbanized  areas and to provide technical assistance  for rural transportation providers.
To foster innovation in public transit  systems, through local demonstrations of  promising, but risky, new technologies  and service or operational concepts; to  address economic and social issues  resulting from human impacts on the  environment and develop risk assessment  methodologies, integrated assessments,  and other analytical tools for effective  policy formulation; to develop practical  know-how for solving fundamental  industry-wide problems, such as how to  accommodate the travel needs of persons  with disabilities, how to finance transit  infrastructure construction, and how to  meet the requirements of the Clean Air  Act; and to support developing  information and technical assistance to  convey the results of research, technology  development, and innovative  demonstrations for adaptation and local  implementation.
To provide competitive grants to local  governments, nonprofit organizations,  and designated recipients of Federal  transit funding to develop transportation  services to connect welfare recipients and  low-income persons to employment and  support services.  Job Access grants will  be for capital projects to finance operating  costs of equipment, facilities and  associated support costs related to  providing access to jobs.  The Reverse  Commute grants will assist in funding the  costs associated with adding reverse  commute bus, train, carpool or service  from urban areas, urbanized areas, and  other than urbanized areas to suburban  work places.
To assure that air transportation is  provided to eligible communities by  subsidizing air carriers when necessary to  provide service.
To increase the participation of minority  institutions in federally funded programs.   Also, to use the resources of minority  institutions to develop training and  technical assistance programs to  enhance small women-owned and  disadvantaged business enterprises to  successfully compete for Department of  Transportation contracts and projects.   The program is also geared to attracting  young talent to transportation-related  careers.
To help smaller communities enhance air  service and increase access to the  national transportation system.
To create opportunities for self-sustaining  economic development and improved  quality of life in the Appalachian region.
To provide a highway system which, in  conjunction with other federally-aided  highways, will open up areas with  development potential within Appalachia  where access to commerce and  communication have been inhibited.
To provide planning and development  resources in multi-county areas, to help  develop the technical competence  essential to sound development  assistance, and to meet the objectives  stated under the Appalachian Regional  Development program.
To assist the Appalachian Regional  Commission in accomplishing its  objectives by expanding the knowledge of  the region through state-sponsored  research. 7(j) Technical Assistance To provide business development  assistance to socially and economically  disadvantaged businesses by contracting  with qualified service providers who have  the capacity to provide business  development assistance to these  businesses or individuals.
To establish privately owned and  managed investment companies to  provide equity capital and long term loans  to small businesses, and to provide  advisory services to small businesses.
To provide guaranteed loans for small  businesses that are unable to obtain  financing in the private credit marketplace  but can demonstrate an ability to repay  loans.
To assist small businesses by providing  long-term, fixed-rate financing for fixed  assets through the sale of debentures to  private investors.
To assist women, low-income, and  minority entrepreneurs, business owners,  and other individuals possessing the  capability to operate successful business  concerns and to assist small businesses  in areas experiencing lack of credit due to  economic downturns.
To create state revolving funds that will  provide a long-term source of financing  for constructing wastewater treatment  facilities and implementing other water  quality management activities.
To create state revolving funds that will  provide a long-term source of financing  for the costs of infrastructure needed to  achieve or maintain compliance with  requirements of the Safe Drinking Water  Act and to protect public health.
To support Brownfields training, research,  and technical assistance related to the  following categories: (1) community  involvement, (2) health impacts of  Brownfields sites, (3) science and  technology relating to Brownfields  assessment, remediation, and site  preparation, (4) integrated approaches to  Brownfields cleanup and redevelopment,  (5) economics of Brownfields cleanup and  redevelopment, (6) results analysis, and  (7) state, local and tribal government  Brownfields programs.
To provide training to facilitate  assessment, remediation, or preparation  of Brownfield sites.
To establish or enhance the capacity for  state and tribal response programs and to  capitalize revolving loan funds and  support insurance mechanisms for  Brownfields Cleanup.
To provide funding: (1) to inventory,  characterize, assess, and conduct  planning and community involvement  related to Brownfield sites; (2) to  capitalize a revolving loan fund (RLF) and  provide sub-grants to carry out cleanup  activities at Brownfield sites; and, (3) to  carry out cleanup activities at Brownfield  sites that are owned by the grant  recipient.
subsections: section_title: A Federal and State partnership designed to provide critical utilities and infrastructure throughout Alaska, particularly in distressed communities.
section_title: To (1) develop the transportation infrastructure of the region for the purpose of facilitating economic development in the region, (2) assist the region in obtaining the job training, employment related education, and business development (with an emphasis of entrepreneurship) that are needed to build and maintain strong local economies; (3) provide assistance to severely distressed and underdeveloped areas that lack financial resources for improving basic public services; and (4) provide assistance to severely distressed and underdeveloped areas that lack financial resources for equipping industrial parks and related facilities.
paragraphs: To support program activities of national  or regional significance to alleviate the  causes of poverty in distressed  communities.
To create new permanent employment  opportunities for low-income individuals  using four project designs priority areas:  (1) expansion of existing businesses  through technical and financial  assistance; (2) self- employment/microenterprise; (3) new  business ventures; and (4) non-traditional  employment initiatives that lead to  economic self-sufficiency for eligible  participants.
To provide financial assistance to Native  American community organizations to  develop and implement social and  economic development strategies that  promote self-sufficiency, improve social  and economic conditions, and increase  the effectiveness of Tribes and Native  American Organizations in meeting social  and economic goals.
To support State efforts to enhance  employment options for people with  disabilities by building Medicaid  infrastructure.
To construct, renovate, expand, equip, or  modernize health care facilities and other  health care related facilities.
section_title: Comments from the Department of Commerce
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to those named above, Andy Finkel, Assistant Director; Emily  Chalmers; Mark Egger; John McGrail; Rich LaMore; John Mingus; Marc  Molino; and Tom Taydus made key contributions to this report.