Nonprofit Sector: Significant Federal Funds Reach the Sector through Various Mechanisms, but More Complete and Reliable Funding Data Are Needed
Published: 2009-02-26T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Increasingly, the federal government relies on networks and partnerships to achieve its goals, and many of these involve nonprofit organizations. GAO was asked to assess (1) the mechanisms through which federal dollars flow to nonprofits and (2) what is known about federal dollars flowing through them to nonprofit organizations in fiscal year 2006. To address these objectives, GAO conducted a literature review of funding; analyzed data from several sources, including the Federal Procurement Data System--Next Generation (FPDS-NG) and the Federal Awards and Assistance Data System (FAADS); and analyzed nonprofit organizations' roles in 19 federal programs.
section_title: What GAO Found
paragraphs: The federal government uses a variety of funding mechanisms to achieve national priorities through partnerships with nonprofit organizations, and the relationships are sometimes complex and multidirectional. Nonprofit organizations receive federal grant and contract funds both directly and through other entities, such as states, for performing activities or providing services to particular beneficiaries. Federal funds paid to nonprofit organizations as fees for services follow a somewhat more complex path. Credit through loan and loan guarantee mechanisms facilitate nonprofit organizations' access to capital. Similarly, some tax policies result in benefits to nonprofit organizations by either reducing their costs or increasing their revenues. With direct federal grants and contracts, and with some loans and loan guarantees, federal agencies generally select the nonprofit participant, directly control the amount of funding provided, and monitor nonprofit performance. With other mechanisms, such as tax expenditures and fee-for-service programs, the federal government sets criteria for acceptable recipients but does not directly select or monitor nonprofit performance. Due to limitations and reliability concerns with tracking systems' data, the data presently collected provide an incomplete, unreliable picture of the federal government's funds reaching the nonprofit sector through various mechanisms, although they suggest these funds were significant. No central source tracks federal funds passed through an initial recipient, such as a state, and the nonprofit status of recipients was not reliably identified in FPDS-NG or FAADS. Factors contributing to data limitations include the nonprofit status of recipients being self-reported and no consistent definition of nonprofit across data systems. The development of a system to report funding through subawards, currently underway, may enable more complete estimates of funding to the sector in the future. However, until the accuracy of nonprofit status is improved, accurately determining the extent of federal funds reaching the sector is not possible, leaving policy makers without a clear understanding of the extent of funding to, and importance of, key partners in delivering federal programs and services. Funding data sources identified the following as the approximate amounts of federal funds flowing to nonprofits in 2006 under different mechanisms, although most sources did not reliably classify nonprofit status of recipients: (1) $135 billion in fee-for-service payments under Medicare; (2) $10 billion in other types of fee-for-service payments; (3) $25 billion in grants paid directly to nonprofits; (4) $10 billion paid directly to nonprofits for contracts; and (5) $55 billion in federal funds paid to nonprofits by states from two grant programs, including Medicaid. (GAO could not assess other programs.) In addition, approximately $2.5 billion in loan guarantees and $450 million in loans were issued to nonprofits, and approximately $50 billion in federal tax revenues were foregone due to tax expenditures related to nonprofits.

section_title: Letter
paragraphs: Increasingly, the federal government relies on networks and partnerships  to achieve its goals, and many of these involve nonprofit organizations.  These organizations are involved in a wide array of missions including  healthcare, education, poverty alleviation, and economic development,  and their missions can align with or complement the objectives of federal  programs. Federal and nonprofit entities often partner with one another as  they work toward the same or similar goals. The relationships are  sometimes categorized and analyzed according to the various policy issues  they address, but another useful analysis involves the funding  relationships, particularly as they vary across different federal funding  tools used to accomplish agencies’ missions. These tools dictate how the  relationships between federal agencies and nonprofit organizations  operate, the roles that these entities and others (including other levels of  government) play, and the degree of control, oversight, and influence that  exists between the federal government and nonprofit organizations.
To examine the extent and structure of the partnering between the federal  government and the nonprofit sector, you asked us to focus on the funding  relationships between the two sectors. Therefore, our objectives in this  report are to provide information on (1) the mechanisms through which  federal dollars flow to nonprofit organizations (which we define as those  entities that are federally tax-exempt), and how federal involvement varies  across them, and (2) what is known about federal dollars flowing through  these mechanisms to nonprofit organizations in fiscal year 2006 (the most  recent year for which we could obtain data from all sources).
To better understand how funds to nonprofit organizations are tracked  and how mechanisms operate, we reviewed 19 federal programs selected  to provide information on a variety of direct and indirect mechanisms and  services across a variety of policy areas and sectors, and to include some  of the more highly funded programs involving nonprofit organizations. The  information obtained from this review is not generalizable to all programs  involving nonprofit organizations. Our steps included reviewing previous  related GAO reports and meeting with program officials. For each  program, we analyzed the roles of nonprofit organizations and how federal  involvement with and influence on these organizations varied across  funding mechanisms. To assess federal funding reaching nonprofit  organizations through various mechanisms, we conducted a literature  review of funding to nonprofit organizations, assessed the suitability of  various potential data sources, and analyzed data from several sources.  Our data sources included the Federal Procurement Data System—Next  Generation (FPDS-NG), Federal Awards and Assistance Data System  (FAADS), several systems at the Centers for Medicare & Medicaid  Services, the Department of the Treasury’s (Treasury) estimates of the  revenue loss of tax expenditures, and the Office of Management and  Budget’s (OMB) collection of information on federal credit programs.  Although we did not validate all of the data provided by these sources, we  took several steps to assess data quality. Overall, we determined that the  data were sufficiently reliable for our engagement purposes. However, we  identified significant reliability concerns regarding data from two systems,  FPDS-NG and FAADS, which limit the precision of our estimates. We also  reviewed research by others that provided perspective on the sector as a  whole. A detailed description of our scope and methodology can be found  in appendix I, and our findings on the reliability of nonprofit identification  in key data systems are detailed in appendix II.
We conducted this performance audit from January 2008 to February 2009  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
subsections: section_title: The Nonprofit Sector
paragraphs: The nonprofit sector is diverse and has a significant presence in the U.S.  economy. Of the estimated 1.8 million tax-exempt organizations in fiscal  year 2007, about 63 percent were public charities or foundations that  benefited the broad public interest, and were referred to as 501(c)(3)  organizations, and about 8 percent were social welfare organizations.  Nonprofit organizations provide services in a wide variety of sectors,  including policy areas such as health care, education, and human services.  Approximately three-quarters of the revenues of 501(c)(3) entities that  filed IRS Form 990 in 2005 were from entities within two subsectors.  Public charities within the health subsector reported about $672.1 billion,  or approximately 59 percent of the revenues reported, and nonprofit  organizations within the education subsector reported about $188.2  billion, or approximately 16 percent.
While the majority of nonprofit organizations individually have relatively  small operating budgets, as a whole the nonprofit sector has a significant  presence in the U.S. economy, according to researchers of the nonprofit  sector. In 2005, nonprofit organizations that submitted Form 990 to the  Internal Revenue Service (IRS) held an estimated $3.4 trillion in total  assets and received $1.6 trillion in revenues. As we reported in 2007, in  addition to representing a significant portion of the U.S. economy, the  sector grew substantially from May 2000 to May 2006. Specifically,  researchers indicated that the number of registered public charities, a  large subset of all nonprofit organizations, grew over 30 percent from  about 646,000 to about 851,000, although organizations that have gone out  of existence may have been included in those numbers. In 2005, we  reported that the nonprofit sector accounted for over 9.6 million  employees in 2002, which was about 9 percent of the civilian workforce.
As we have previously reported, the federal government is increasingly  partnering with nonprofit organizations because nonprofits bring many  strengths, such as flexibility to respond to needs and access to those  needing services. Federal agency officials we spoke with reported that  they may target nonprofit organizations when authorized by program  regulations or when nonprofit organizations are the best source of a  particular service, but they generally do not focus on the profit-making  status of partners when distributing funding. For example, the Department  of Labor is authorized by law to provide grants to public and nonprofit  private organizations as part of its Senior Community Service Employment  Program. Further, while the Department of Housing and Urban  Development does not specifically target Emergency Shelter Grant  Program funding to nonprofit organizations, a large portion of this funding  reaches nonprofits because these organizations play a prominent role in  delivering emergency shelter services for the homeless.
section_title: Federal Funding Mechanisms
paragraphs: The federal government uses a variety of funding mechanisms to achieve  national priorities through partnerships with nonfederal parties such as  nonprofit organizations. Federal grants and cooperative agreements are  forms of assistance authorized by statute in which a federal agency  transfers something of value, such as money or property, to a party for a  purpose, undertaking, or activity of the grantee that the government has  chosen to assist. Federal contracts are mutually binding legal  relationships obligating the seller, in this case the nonprofit entity, to  furnish the supplies or services, and the buyer, in this case the  government, to pay for them. The federal government typically uses  contracts (rather than grants) as a mechanism when the principle purpose  of the funded activity is to provide something for the direct benefit of the  federal government. For example, contracts can be used to procure  independent evaluations of programs, to conduct research for agency  missions, or to buy information technology services for an agency. Federal  credit and insurance programs, which include direct loans and loan  guarantees, provide an alternative to direct spending and can fill market  gaps when private lending and insurance companies cannot meet  economic demands. Tax expenditures are reductions in tax liabilities that  result from preferential provisions, such as exclusions, credits, and  deductions. They result in revenue forgone by the federal government and  create incentives for certain behaviors, such as making charitable  donations to nonprofit organizations. Fee-for-service, or voucher-type,  mechanisms provide funding to organizations through the ultimate  recipient of services. For example, under a fee-for-service mechanism,  physicians may receive payments for each service provided (such as an  office visit).
Several cross-governmental databases provide information on federal  funding through the mechanisms described above. The Federal Assistance  Award Data System (FAADS) provides financial data on grants and other  forms of assistance that are made by the federal government, whereas the  Federal Procurement Data System—Next Generation (FPDS-NG) collects  federal procurement data. OMB is responsible for USAspending.gov, a  Web site mandated by the Federal Funding Accountability and  Transparency Act of 2006 (FFATA) that establishes a single searchable  location for financial information on grants, contracts, credit, and fee-for- service payments. Also, the IRS Form 990 provides detailed financial  information on tax-exempt entities with annual gross receipts greater than  $25,000. In addition, the Federal Audit Clearinghouse provides information  on nonprofit organizations and other nonfederal entities that spend more  than $500,000 a year in federal awards. Treasury’s Office of Tax Analysis  lists tax expenditures and estimates their cost, as reported by OMB in the  President’s Budget submission.
section_title: Funding Mechanisms Are Varied and Relationships Can Be Complex
paragraphs: Federal agencies partnering with nonprofit organizations use several  different funding mechanisms, and relationships between nonprofit  organizations and federal agencies vary. The type of funding mechanism  used determines the level of federal influence over nonprofit selection and  oversight of performance.
subsections: section_title: Grants and Contracts Provide Both Direct and Indirect Funds to Nonprofit Organizations
paragraphs: Nonprofit organizations sometimes work directly with federal agencies as  grantees and contractors, in a relatively straightforward relationship. Our  analysis of the 2006 data on federal funding to nonprofit organizations  indicated that grants were provided to nonprofits directly under about 700  different programs. Types of activities funded through direct grants to  nonprofit organizations included social services and research. For  example:    The National Institutes of Health provide grants for extramural  research to accomplish its mission related to public health needs.  About 84 percent of its budget in fiscal year 2007 supported extramural  research by researchers at various entities, including nonprofit higher- education institutions, research institutes, and hospitals.
The Administration for Children and Families in the Department of  Health and Human Services provides Head Start grants to nonprofit as  well as for-profit entities. Public and private nonprofit and for-profit  agencies can receive direct grants to provide educational, health,  nutritional, and other services to low-income children and families.
The Senior Community Service Employment Program, funded by the  Department of Labor’s Employment and Training Administration,  provides grants to nonprofit organizations to provide subsidized, part- time work-based training to older workers through employment in the  community service sector. Under this program, nonprofit organizations  can also be the beneficiary of this subsidized labor.
Federal agencies also contract directly with nonprofit organizations to  provide goods or services for the direct benefit of the federal government.  Contracts are tracked in FPDS-NG, which we found to be somewhat  unreliable in categorizing entities as nonprofit, although suitable for  providing some order of magnitude. (See results of our reliability analysis  in app. II.) It showed that of the federal contracts provided to nonprofit  organizations in fiscal year 2006, about two-thirds were awarded by the  Department of Energy and the Department of Defense and about one-tenth  by the Department of Health and Human Services. Even so, the percentage  of dollars contracted to nonprofit organizations within these agencies is  relatively small. For example, nonprofit contracts constituted only 1  percent of the Department of Defense’s total 2006 contract dollars, while  about 10 percent of the Department of Health and Human Services’  contract dollars were awarded to nonprofit organizations. Some programs  contract with nonprofit organizations to help administer programs. For  example, the Centers for Medicare & Medicaid Services contract with  quality-improvement organizations, which can be nonprofit organizations,  to monitor provider performance.
Nonprofit organizations also receive grants indirectly through other levels  of government, or as subgrantees of other grantees, and are sometimes  subcontractors to other federal contractors. Some federal programs are  set up as large grants to states, with the expectation that they will then be  further disbursed for local program implementation, and nonprofit  organizations are sometimes used for further service delivery. For  example:    The Department of Health and Human Services’ Administration for  Children and Families oversees the Social Services Block Grant,  providing funds to states to furnish social services to residents.  Depending on the state, nonprofit organizations compete with other  organizations for these funds to provide a wide range of social  services, which can include daycare, protective services, adoption,  case management, health-related services, and transportation.
Similarly, the U.S. Department of Agriculture’s Food and Nutrition  Service provides grants to state agencies under its Child and Adult  Care Food Program. States reimburse institutions and organizations  that provide nutritious meals and snacks to eligible children and adults  enrolled for care at participating child and adult day care homes and  centers, emergency shelters, and after-school care programs. Both the  sites providing the nutrition service and the organizations that manage  site operations, keep records, and submit claims are sometimes  nonprofit organizations.
Nonprofit organizations can also be subcontractors to other federal  contractors. For example, a nonprofit university performing research  under a federal contract could subcontract with another nonprofit  university to complete a portion of the research where its researchers  have a particular specialty.
section_title: Nonprofit Organizations Obtain Federal Funds through Fees and Direct Payments for Services
paragraphs: Federal funds also reach nonprofit organizations through other more  complex routes, such as through reimbursement for fees that they charge  their clients. The Medicare program is a significant example of such a  program. Individuals aged 65 and older as well as certain disabled  individuals seek health care at various facilities, some of which are  nonprofit hospitals, nursing facilities, and managed care organizations.  The facility is then paid by the Medicare program.
Other programs involving direct payments for services in which nonprofit  organizations can be recipients include voucher programs. These allow the  beneficiary of a program to choose the source of services, while the  services are paid by the program. The Pell Grant program, for example,  operates under this principle. It provides need-based grants to low-income  students to promote access to postsecondary education. Students may use  their grants at any of about 5,400 participating postsecondary institutions,  many of which are nonprofit. In these cases, the nonprofit institution acts  as an intermediary between the student and the Department of Education.
section_title: Nonprofit Organizations Provided Access to Additional Funds through Federal Loans and Loan Guarantees
paragraphs: Nonprofit organizations are involved in credit relationships with the  federal government, in some cases as the recipient of funds loaned or  guaranteed by federal agencies, and in some cases as the guaranty agency.  In general, the federal government loans money and guarantees others’  loans as a way of increasing the availability of funding for borrowers or  activities it considers important. The Rural Development Electric Program,  operated by the U.S. Department of Agriculture’s Rural Development,  Utilities Programs, is an example of a program where loans and loan  guarantees are provided directly, in this case to electric utilities to serve  customers in rural areas. The loans and loan guarantees help finance the  construction of electric distribution, transmission, and generation  facilities; system improvements; and other activities, including energy  conservation programs. In this program, nonprofit organizations can also  be intermediaries, issuing loans that are guaranteed by the federal  government.
Similarly, the Hospital Mortgage Insurance Program, implemented by the  Department of Housing and Urban Development’s Federal Housing  Administration, operates a loan guaranty program that insures loans.  These federally guaranteed loans finance the construction, modernization,  equipping, or refinancing of acute-care hospitals. The program facilitates  affordable financing of nonprofit, for-profit, and government-owned  hospitals by protecting lenders against losses they might incur if hospitals  fail to make their mortgage payments. The program generally targets  hospitals deemed too risky to obtain private bond insurance but able to  pass certain agency underwriting tests. In addition, the program serves as  a credit enhancement and improves the credit rating of the hospital,  resulting in a lower interest rate for the loan.
Finally, some federal programs use loans and loan guarantees to  encourage activities that indirectly result in increased revenues to  nonprofit organizations. For example, within student loan programs, the  federal government both guarantees loans and provides loans directly to  students for postsecondary education, often at nonprofit institutions. The  various loans available within the Federal Family Education Loan Program  are set up to provide incentives to lenders (such as banks, credit unions,  and savings and loan associations) to make loans to students enrolled at  eligible postsecondary institutions. Guaranty agencies, which are state or  nonprofit organizations, administer several portions of the program by  providing technical assistance and training to schools and lenders on  procedures, providing counseling to borrowers, reimbursing lenders with  federal funds when borrowers default on their loans, and initiating  collections. Conversely, with the Federal Direct Student Loan program,  the federal government provides loans directly to vocational,  undergraduate, and graduate postsecondary school students and their  parents, rather than through private lenders. In both cases, nonprofit  higher-education institutions benefit from the availability of funds.
section_title: Nonprofit Organizations Benefit from Federal Tax Policies
paragraphs: Federal tax policies provide significant financial benefits to nonprofit  organizations while resulting in revenue forgone by the federal  government. Unlike some of the other mechanisms discussed above, they  do not provide federal funds but rather either reduce taxes needing to be  paid, reduce other costs, or increase revenues. Classification as section  501(c) type organizations provides these entities exemption from paying  federal income tax. Further, certain types of organizations are  specifically exempted from paying income taxes; for example, credit union  income is exempt from income taxes.
Nonprofit organizations also benefit indirectly from tax expenditures that  are aimed at encouraging certain kinds of behavior by taxpayers when  those behaviors involve nonprofits. For example, tax expenditures  encourage charitable giving, stimulate economic development in  disadvantaged areas, finance postsecondary education, and encourage  adequate healthcare coverage. In some cases, these behaviors primarily  involve nonprofit organizations, such as with charitable contributions. In  other cases, nonprofit organizations are significant providers of services  being targeted, although these services are also provided by for-profit and  government-operated entities. For example, individuals deducting  education and health care expenses could incur those expenses at all three  types of entities.
Some tax expenditures have more complex interrelationships between  nonprofit organizations and governmental units. For example, tax-exempt  bonds are used to finance the construction of facilities used by 501(c)(3)  organizations. These bonds are issued by state and local governments.  Interest income from these bonds is exempt from federal income tax, the  alternative minimum tax, and, in general, state income taxes. The tax  exemption lowers the bond issuer’s borrowing costs as investors require  lower returns than they otherwise would. In addition, state and local  governments can create other entities, including nonprofit entities to issue  bonds on behalf of a governmental unit. Similarly, the low-income housing  tax credit also involves multiple parties. Nonprofit and other types of  developers of low-income rental housing receive the federal tax credits  from state agencies to develop or rehabilitate low-income housing.  Developers then sell these credits to investors to raise capital (or equity)  for their projects, which reduces the debt that the developer would  otherwise have to borrow. In addition, a few large nonprofit organizations  also provide technical assistance to nonprofit developers and serve as  intermediaries for facilitating the sale of tax credits to investors.
section_title: Type of Funding Mechanism Generally Determines the Level of Oversight and Influence That Federal Agencies Have over Nonprofit Organizations
paragraphs: The amount of federal involvement in selecting and overseeing nonprofit  performance varies across funding mechanisms. With some funding  mechanisms, federal agencies generally select nonprofit recipients,  determine how much funding nonprofit organizations will receive, and  monitor nonprofit performance. With direct contracts and grants, agencies  select nonprofit organizations by soliciting requests for proposals and  holding open competitions. The National Institutes of Health, for example,  competitively awards grants by using a system of peer review that  assesses applications on scientific merit and agency funding priorities.  Also, with direct contracts and grants, federal agencies evaluate nonprofit  performance and can under certain circumstances choose to terminate  contracts or may choose not to renew contracts and grants when  nonprofit organizations perform poorly. For example, in the Head Start  Program, the Administration for Children and Families conducts on-site  monitoring reviews of grantee programs every 3 years and administers an  extensive annual survey of grantees to evaluate performance. If a  nonprofit grantee is not meeting program requirements, the agency has  authority to remove the grantee from the program. With some credit  programs, federal agencies also select nonprofit organizations and monitor  performance, but their opportunity to evaluate performance occurs before  they provide funding to the nonprofit. The Department of Housing and  Urban Development, for example, uses a variety of financial criteria to  determine nonprofit organizations’ future performance before providing  hospital mortgage insurance to hospitals. After it has awarded insurance  to a hospital, the department monitors a hospital’s performance while  using the loan and can require poorly performing hospitals to hire  consultants to improve performance.
In programs using other funding mechanisms, the federal agency sets  eligibility standards for nonprofit recipients but relies on other  government entities to select nonprofit organizations and monitor  performance. For example, with indirect grant programs such as the  Social Services Block Grant, the federal government provides funding to  states, which have broad discretion to determine the services provided,  define individual beneficiary requirements, and allocate funding to  recipients. While the federal agency does not monitor the performance of  individual nonprofit and other recipients receiving this grant funding,  states are required to monitor the performance of nonprofit recipients.
With fee-for-service programs such as Medicare, states determine service  provider eligibility, but individuals choose their providers. While the  federal agency has overall responsibility for administering Medicare, state  agencies—typically state health departments—monitor, survey, and  inspect health care service providers. Additionally, some tax expenditure  programs, such as the low-income housing tax credit, leverage state or  local governments to select or monitor nonprofit performance, or both.  With the low-income housing tax credit, nonprofit developers compete for  the credits, and states allocate them based on broad federal guidelines.  While the IRS issues regulations for the program, it relies on state  authorities to monitor and certify which projects remain eligible to receive  tax credits. The IRS may then recapture taken credits or deny issuance of  further credits for reported noncompliance with low-income housing tax  credit laws.
In other programs, individuals select nonprofit organizations, and federal  oversight of nonprofit performance is limited. With student loan programs,  for example, the Department of Education determines institutions’  eligibility to participate in the programs, while the institutions’ funding is  dependent on the number of students that choose to matriculate and the  financial need of those students. The Department of Education monitors  the performance of nonprofit postsecondary institutions through  reviewing their default rates, which measures the extent students are  defaulting on their loans, and performing periodic program reviews.  Further, with charitable deductions, agencies do not select nonprofit  organizations or monitor nonprofits’ performance. Instead, individuals  providing contributions determine which nonprofit will receive funding,  and the IRS’s role is limited to determining 501(c)(3) eligibility, monitoring  certain filing requirements, and revoking section 501(c)(3) status. While  the IRS may revoke the 501(c)(3) status of nonprofit organizations in  certain circumstances, it does not assess whether nonprofit organizations  use the revenues from charitable contributions to meet the goals of the  contribution, although some information is publicly available to  individuals.
section_title: Data Limitations Leave Decision Makers without Complete Information on Funding to Nonprofit Organizations, Although Data Suggest That Significant Federal Funds Reached Nonprofit Organizations in 2006
paragraphs: The federal government tracks and provides information on funding in  order to provide decision makers and the public with accurate information  on the sources and uses of federal funds, among other reasons. The  Federal Managers’ Financial Integrity Act of 1982 requires that agencies  establish controls to ensure that expenditures applicable to agency  operations are properly recorded and accounted for to permit the  preparation of accounts and reliable financial and statistical reports. In  fulfilling this responsibility, federal agencies collect a range of information  on funding mechanisms and recipients, and this information is  consolidated and reported to a few governmentwide data systems that  consolidate data across most of the federal government. With the  development of USAspending.gov—a publicly available Web site of federal  spending, mandated by the FFATA, that provides information on entities  awarded federal grants, loans, contracts, and other forms of federal  assistance—such data are readily available to the public. In addition, in  conjunction with performance data, this information can be used as a tool  for reexamining federal roles and the efficiency and effectiveness of  various mechanisms and partners in the pursuit of federal objectives.  These data are also used as inputs for the development of economic  analyses such as the Consolidated Federal Funds Report, which analysts  use to measure and assess federal expenditures in state and substate  areas.
subsections: section_title: Data Limitations and Reliability Concerns Contribute to an Incomplete and Unreliable Picture of Federal Funding
paragraphs: The data presently collected provide an incomplete and, for portions,  unreliable picture of federal funding to nonprofit organizations. First,  information on funding reaching nonprofit organizations through indirect  mechanisms is generally not available, though we present some estimates  for some programs in table 1. Therefore, we cannot conduct a  comprehensive assessment of how much federal money reaches nonprofit  organizations through subcontracts, subgrants, or through fee-for-service  payments to for-profit enterprises that are subsequently spent on nonprofit  organizations or through other mechanisms. Nonprofit organizations may  receive considerable funding through indirect mechanisms, in particular  through indirect grants to state and local governments. According to OMB,  federal grant outlays to state and local governments amounted to $434  billion in 2006, and one study estimated that about 26 percent of such  funds reached nonprofit organizations in fiscal year 2001.
Second, nonprofit entities are not reliably identified, which limits the  reliability and completeness of reported funding amounts in two key data  systems, FPDS-NG and FAADS. These systems are the only  governmentwide systems for obtaining detailed information on federal  procurement and assistance, and their data are used to populate  USAspending.gov. However, in developing the funding information  outlined above, we found that nonprofit organizations are not reliably  identified in either of these systems. For example, based on our testing of  a sample of records, we estimate that 8 percent of the records in FAADS  coded as nonprofit organizations are actually other entity types, and that 5  percent of records coded as other entities are actually nonprofits. (See  app. II for further details on our approach and results of reliability testing.)  Similarly, 27 percent of the vendors in FPDS-NG with nonprofit contract  actions also had contract actions where they were classified as not being  nonprofit organizations. This represents 1,768 vendors, who constituted a  majority of reported nonprofit obligations ($8 billion of $12 billion total).
We have previously reported concerns about the accuracy and  completeness of data in FPDS-NG and FAADS. For example, we reported  in February 2006 that data submitted for inclusion in FAADS on financial  assistance awards related to economic development were often inaccurate  and incomplete. During the course of our current review we identified  one program that FAADS data indicated provided almost $1 billion to  nonprofit organizations. However, program officials told us that the  program only provided a total of around $150 million to all recipients.  According to OMB, figures in FAADS and FPDS-NG have, in the past, been  incomplete, untimely, and inaccurate. For example, agencies have  reported loan guarantee amounts only when a default occurs.
In addition to these overall concerns about the reliability and integrity of  the databases, several ways in which the data are captured and stored  prevented us from distinguishing funding to nonprofit organizations from  funding to other groups. For example:    Nonprofit institutions of higher education in FAADS are classified  along with other private higher-education institutions. Based on a  sample of these records, we estimate that 95 percent of the records in  this category were actually nonprofit organizations. (See app. II for  further details.)
Similarly, tax expenditure estimates in various areas include benefits  to nonprofit as well as other entities. For example, though Treasury  estimates that the low-income housing tax credit cost the federal  government $4.4 billion in 2006 in forgone revenues, the portion of that  total that is related to projects developed by nonprofit organizations is  not systematically assessed.
section_title: Limitations and Reliability Concerns Caused by Various Factors
paragraphs: Limitations in the data presently collected may be caused by several  factors including a reliance on data that are not verified and a lack of clear  guidance defining a “nonprofit” organization. Agency officials told us that  the nonprofit status of organizations can be self-reported by recipients or  entered by agency officials and not verified in most data systems we  examined including FPDS-NG, FAADS, and Medicare’s Health Plan  Management System (HPMS) which provides information on Medicare  managed care and prescription drug plan payments. Furthermore, there is  no consistent, governmentwide definition of “nonprofit.” Guidance for  registrants in the Central Contractor Registration, which agencies may use  to identify the nonprofit status of entities for federal assistance and  contracts in FAADS, FPDS-NG, and USAspending.gov, asks registrants  simply to identify whether they are “for profit”, “non profit”, or “other not  for profit.” Similarly, HPMS provides no guidance for recipients. These  concerns are not new, as we have previously reported that data in FPDS- NG and FAADS can be improved. For example, we have recommended  automating data checks and improving knowledge among program  officials about reporting requirements.
section_title: Efforts to Improve Data Collection May Improve Information on Federal Funding to Nonprofit Organizations, Though Concerns Will Likely Remain
paragraphs: Efforts are underway to improve the funding data collected by the federal  government and may, if appropriately implemented, provide further and  more accurate information on federal funding to nonprofit organizations.  In March 2008, OMB issued a memo with new guidelines, emphasizing the  need to report timely, accurate, and complete data for FAADS and FPDS- NG, as prescribed by the Federal Funding Accountability and  Transparency Act of 2006 (FFATA). The act, and OMB’s efforts to  implement it, may improve data collected on grants, contracts, credit, and  fee-for-service payments. First, the act requires data on subawards such as  subcontracts and subgrants to be collected and reported. These indirect  mechanisms are likely to be a major way nonprofit organizations receive  federal assistance and this will represent the first time data will be  collected to address it. Second, the act requires the use of unique  identifiers for entities receiving certain types of federal assistance. It is  currently very difficult to assess the nonprofit status of a single recipient  across federal funding databases or over time because these databases do  not have a unique entity identifier. Having unique identifiers could  facilitate agency and outside analysts’ verification and tracking of  nonprofit organizations and their status and therefore could facilitate the  identification of errors and improve the data. Third, recognizing that data  in the past have been incomplete, untimely, and inaccurate, OMB has  issued guidance for agency data submissions under FFATA that specifies  more exactly how agencies are to report credit assistance (loans and loan  guarantees) and requires agencies to ensure that they provide appropriate  oversight for the accuracy of data and validate all data submissions. If  appropriately pursued, such validation could encourage agencies to  implement policies and processes to improve the quality of data they  submit to federal funding sites.
Officials from the General Services Administration (GSA) and OMB  indicated they have considered an approach to verify the nonprofit status  of nonprofit organizations receiving grants. A GSA official indicated that  GSA is considering using the Central Contractor Registration (CCR) to  validate information on these recipients’ nonprofit status. While using the  CCR to verify nonprofit status presents challenges, such as there being no  central registry for state nonprofit designations and having a time lag with  data from IRS’s publicly available master file of federally tax-exempt  organizations, an OMB official noted that this is potentially a source for  validating nonprofit status.
section_title: Data Sources Suggest Significant Federal Funds Reach Nonprofit Organizations
paragraphs: Our analysis of data presently collected suggests that significant federal  funds reached nonprofit organizations in 2006, as shown in table 1.  Although we identified a number of data limitations and reliability  concerns with several key data sources as discussed above, we  nevertheless found the data overall to be sufficiently reliable to provide an  approximate indication of the general magnitude of federal assistance  across these mechanisms. Available data, and our estimates based on  these sources, suggest that federal funding made up a significant portion  of nonprofit organizations’ total revenues. The Urban Institute estimated  that nonprofit organizations that submitted Forms 990 to the IRS received  $1.6 trillion in revenues in 2005. (See app. I for specific information on  data sources and analysis.)
Fee-for-Service and Vouchers—Data from the Medicare program  and the Federal Award and Assistance Data System (FAADS) indicate  that federal fee-for-service or voucher programs provided nonprofit  organizations with about $145 billion in 2006. Medicare was the  largest source of such funds, having paid nonprofit health care  providers and managed care plans about $135 billion in calendar year  2006. Other fee-for-service or voucher programs, such as federal Pell  Grants and the Federal Work-Study program, obligated about $10  billion to nonprofit organizations in 2006. Together, these data suggest  that nonprofit organizations received about one-third of total federal  fee-for-service funding.
Direct Grants—A large number of direct grant programs provided  about $25 billion to nonprofit organizations in 2006, about 5 percent of  total grant funding.
Contracts—About $10 billion was obligated in actions with nonprofit  organizations, representing less than 3 percent of total contract  obligations in 2006.
Indirect Grants—Comprehensive data on grant funds that indirectly  reach nonprofit subrecipients are not available. We examined two  specific programs that make up a large portion of total funding to  states, Medicaid and the State Children’s Health Insurance Program  (SCHIP), and estimate that around $55 billion was passed on by states  to nonprofit organizations based on program-reported expenditures  and the share of nonprofit organizations in the health care sector  overall. There are a number of other programs for which federal funds  flow through states to nonprofit organizations but we did not attempt  to estimate that funding. We did attempt to identify information on  federal funds flowing through the three states that, according to  FAADS, received the highest amount of federal financial assistance— California, New York, and Texas. However, state officials indicated  that none of these states collected data across agencies on federal  funding provided to nonprofit organizations, although we did identify  some individual state agencies that maintained these data. For  example, the Texas Department of State Health Services’ records  indicated that over $280 million in federal funds were encumbered on  active contracts with nonprofit organizations during the state’s fiscal  year 2007. Since we were unable to comprehensively assess such  funding to nonprofit organizations, we believe that total funding to  nonprofits through indirect grants was likely more than $55 billion in  2006.
Indirect Contracts—We did not identify any information on which to  assess the funding nonprofit organizations received indirectly through  other contractors.
Further, some federal policies result in additional funds being available to  nonprofit organizations.
Credit—Available data from FAADS indicates that about $450 million  in direct loans and $2.5 billion in loan guarantees were issued directly  to nonprofit organizations in 2006, though OMB has raised concerns  with how some of these data are reported. For example, we found  that these data do not include one of the largest federal credit  programs, the Federal Family Education Loan program. Based on data  from OMB, we estimate that in 2006, the federal government had about  $120 billion in outstanding loans or guarantees involving nonprofit  organizations through four key credit programs. This includes our  estimate of student loans that were used at nonprofit institutions of  higher education. Based on OMB’s estimates of the future costs to the  federal government of these credit programs, the future costs of credit  involving nonprofit organizations is likely to be about $15 billion.
Tax Policies and Tax Expenditures—Though more difficult to  assess and not directly comparable to funding through other  mechanisms, federal tax policies provide significant financial benefits  to nonprofit organizations. As described above, federal tax policy  benefits nonprofit organizations by (1) exempting nonprofits from  having to pay federal income taxes on activities substantially related to  the purpose that led to the nonprofits’ tax exemption, and (2) through  specific tax expenditures, or tax provisions that grant special tax relief  for certain behaviors by taxpayers or for taxpayers in special  circumstances. Researchers have estimated the amount of revenue the  federal government may forgo by not taxing nonprofit income, and the  Treasury’s Office of Tax Analysis annually compiles a list of tax  expenditures and estimates of their cost. There has been no  comprehensive research on the revenue lost from not taxing nonprofit  organizations, although existing research offers estimates for specific  portions of the nonprofit sector. One study estimated that the value of  the federal and state income tax exemption for charitable nonprofit  organizations was about $10 billion in 2002. In 2005, the Joint  Committee on Taxation estimated that taxing large credit unions  similarly to the way that other thrift institutions are taxed would raise  $6.5 billion between 2006 and 2010. However, in their assessment of  the consequences of taxing nonprofit organizations more broadly, the  Congressional Budget Office found that taxing nonprofits would likely  yield less tax revenues than their size and share of economic activity  might suggest because nonprofits were likely to reduce their taxable  income by lowering prices and increasing compensation and other  costs.
Various specific tax expenditures also benefit nonprofit organizations.  Table 2 presents five tax expenditures that involve nonprofit organizations  and which Treasury estimated to represent $49 billion in forgone revenue  in 2006, primarily through the deductibility of charitable contributions.  The deductibility of charitable contributions creates an incentive for  corporations and individuals to provide support for charitable activities,  and the availability of tax-exempt bond financing can enable certain  nonprofit organizations to borrow funds at lower interest rates. Other tax  expenditures indirectly benefit nonprofit organizations by increasing the  demand for services provided by nonprofits as well as other entities. For  example, the exclusion of employer contributions for health care  insurance and various education-related tax expenditures are aimed at  broad health and education objectives and not particularly targeted at  nonprofit provision of those services. However, since nonprofit  organizations provide a large portion of health care and educational  services to the nation, some of the value of these tax expenditures reaches  nonprofits.
section_title: Conclusions
paragraphs: The federal government interacts with nonprofit organizations and a wide  range of other partners to accomplish mutual goals—providing health  care, ensuring that youth are educated, providing job training, increasing  the supply of low-income housing, and many other goals. Much of this  interaction is tied to federal funding available to nonprofit and other  recipients, or funding made available as a result of federal policies. The  available data indicate that these sources represent a significant portion of  the nonprofit organizations’ total revenues. Such funds come in many  forms, each with varying ways in which the federal government is able to  monitor and influence recipients’ performance. As a result, the federal  government’s ability to influence which nonprofit organizations are  involved and the quality of their services varies, and the involvement of  other parties—states, local government, and individual contributors— varies.
The significant extent and diversity of the federal government’s partnering  with the nonprofit sector should be better understood, but this  opportunity is being missed, in part, because of the absence of complete  and accurate data on federal funding reaching recipients of different types.  Although available data indicate that significant federal funding reaches  the nonprofit sector, the precise extent of that funding is not known  because of data limitations. As a result, the extent of the federal  government’s dependence on various sectors for delivering services also is  unknown.
Some efforts are underway to improve information on the funding  reaching nonprofit organizations and other types of organizations. One of  the areas that is hard to measure is the funding reaching nonprofit  organizations through indirect grants and contracts. The changes in  FFATA should improve the availability of this information. However, as  we found in reviewing data collected by agencies, there are concerns  about the quality of those data, particularly the type of entity, a data  element that is critical to accurately understanding the amount of federal  funding reaching nonprofit organizations. We have reported our concerns  on the quality of the data and recommended improvements in the past, but  this additional problem—that nonprofit status is sometimes incorrect and  defined differently across the federal funding data—has additional  implications. It prevents the federal government from accurately assessing  the extent to which it uses this sector and the potential effect of the  sector’s strength as a key partner in delivering federal services.
section_title: Recommendation for Executive Action
paragraphs: To better ensure the accuracy of information on federal funding provided  to nonprofit entities in the data available under FFATA, we recommend  that the Director, OMB, ensure that a consistent definition is identified and  used to categorize nonprofit organizations in USAspending.gov.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to OMB and the Departments of  Agriculture, Education, Health and Human Services, Housing and Urban  Development, and Labor. OMB responded in an e-mail that the use of CCR  would likely offer a consistent method of validating the Internal Revenue  Service tax-exempt status of nonprofit recipients at the prime level and at  lower tiers. However, in order to validate nonprofit status and effectively  capture award data of all nonprofits receiving funds passed through other  entities, the prime award recipients would have to require that those  receiving subawards at every award tier register in CCR and report their  award data directly to a central repository. OMB noted that states would  likely have the largest volume of multitier award activity and would be  responsible for ensuring compliance at every tier and for validating the  data, which could impose a major resource burden on states.
We recognize the additional difficulty of ensuring the accuracy of  information on those receiving subawards. However, we identified  unreliable information on nonprofit status for funds that were provided  directly to nonprofits, and ensuring the accuracy of information on these  direct recipients would be a first step to improving the data. We also  believe, however, that as the FFATA data are expanded to include data on  those receiving subawards, efforts are needed to ensure the accuracy of  that data, including the nonprofit status of recipients of federal funds. We  believe that this is the appropriate time—as OMB is continuing to develop  its approach to implementing FFATA’s subaward data requirements—to  identify approaches that could be effective in improving the reliability of  this information.
The Department of Housing and Urban Development also responded by e- mail, stating that it concurred with the draft and offering comments based  on information from its own verification and validation of FPDS-NG data.  It concurred that data limitations and reliability concerns contribute to an  incomplete and unreliable picture of federal funding, which limits the  reliability and completeness of reported funds. Further, it concurred that  the CCR should be used to validate information on recipients’ nonprofit  status and should have validation checks and a consistent definition  describing nonprofits. In addition to these formal comments, the  Department of Agriculture provided a technical comment, which we  incorporated. The Departments of Agriculture, Education, Health and  Human Services, and Labor did not provide formal comments.
We will send copies of this report to the Director of OMB and the  Secretaries of Agriculture, Health and Human Services, Housing and  Urban Development, Labor, and Education. In addition, the report will be  available at no charge on the GAO Web site at http://www.gao.gov.
If you have any questions about this report, please contact me at (202) 512- 6806 or czerwinskis@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 III.
section_title: Appendix I: Detailed Scope and Methodology
paragraphs: To identify the direct and indirect mechanisms through which nonprofit  organizations receive federal funds, we reviewed academic and  professional literature, met with experts on the nonprofit sector, reviewed  previous GAO reports on federal programs that involve nonprofit  organizations, reviewed 19 different programs (see table 3), and met with  agency officials. We judgmentally selected these programs using three  criteria: they (1) utilized a variety of direct and indirect mechanisms,   (2) provided services across a variety of policy areas and sectors, and   (3) represented programs among the higher dollar values of all federal  programs that involve nonprofit organizations. Although the information  obtained from this review cannot be generalized as representative of all  nonprofit programs or funding mechanisms, we believe it provides  valuable insight into how these funding mechanisms operate and the  relationship between the federal and nonprofit sectors.
To assess federal funding reaching nonprofit organizations through  various mechanisms, we reviewed the literature on funding to nonprofits,  assessed the suitability of various potential data sources, and analyzed  data from those sources we determined to be most appropriate. We did  not validate all of the data provided through these various sources.  However, we took several steps to assess data quality. Specifically, in  sources where individual recipient-level data were available, we tested a  sample of records with the Internal Revenue Service’s (IRS) Master File  listing of all tax-exempt organizations and other sources. (For more  information, see app. II.) To assess the reliability of funding figures in  these data sources, we interviewed agency officials, performed various  quality checks, reviewed available documentation, and where possible  compared data to that from other sources. Overall, we determined that the  data were sufficiently reliable for our engagement purposes. However, we  identified significant reliability concerns regarding data from two systems,  Federal Procurement Data System—Next Generation (FPDS-NG) and  Federal Awards and Assistance Data System (FAADS), which we highlight  in the body of the report and in appendix II.
We used the following data sources to estimate federal funding to  nonprofit organizations:    FPDS-NG—We assessed federal contract funding to nonprofit  organizations by summing the funding for all contract actions involving  vendors identified as nonprofits in the FPDS-NG in fiscal year 2006.
FAADS—To assess federal grant, fee-for-service or voucher, and  credit assistance to nonprofit organizations, we used data from  FAADS. We compiled quarterly files for all of fiscal year 2006 and  removed any actions reported during fiscal year 2006 that are  corrections to data from previous fiscal years. We did not include  corrections to fiscal year 2006 data that were reported in subsequent  quarterly files. During the course of our analysis, we identified a set of  records with action obligation dates outside of fiscal year 2006 and  removed those we determined did not relate to fiscal year 2006  actions. FAADS contains several assistance types, and we considered  grants to include those actions coded as being block grants, formula  grants, project grants, and cooperative agreements. Direct payments  for specified use include payments under Medicare, and we consider  these to be fee-for-service or voucher programs. FAADS also reports  data on direct loans and loan guarantees. We did not comprehensively  assess the accuracy of the assistance types in FAADS. FAADS funding  amounts are primarily based on obligations.
Medicare—To assess Medicare program funding to nonprofit  organizations, we analyzed data from Centers for Medicare & Medicaid  Services (CMS) data systems and assessed information provided by  CMS officials. For Medicare Part A and B payments to nonprofit  organizations, we combined data on payments to providers in CMS’  Health Care Information System (HCIS) with the nonprofit status of  those providers in the Provider of Services (POS) files. We divided  entity types in the POS into nonprofit and other categories based on  our review of documentation and, where documentation was lacking,  tests of some recipients. We did not consider entities coded as  combined types, such as combined government and voluntary home  health facilities, to be nonprofit organizations. CMS officials provided  data on Medicare Part C (managed care) and D (prescription drug  benefit) payments to nonprofit and other plan types, which officials  told us represent nonprofit status from CMS’ Health Plan Management  System (HPMS) and payment figures to those plans from the  Automated Plan Payment System (APPS). All figures on Medicare  payments are for the calendar year 2006.
Medicaid and State Children’s Health Insurance Program—We  estimated the amount of federal funds that may have reached  nonprofit institutions through Medicaid and the State Children’s Health  Insurance Program (SCHIP) by examining program expenditure  reports and assessing a share of expenditures in select categories that  may have reached nonprofit organizations. Our calculations are based  on a preliminary version of CMS’ Financial Management Report for  fiscal year 2006 that was provided to us by CMS and is subject to  revisions. We combined federal Medicaid and SCHIP expenditures in  fiscal year 2006 in select service categories that we identified during  our review as significantly involving nonprofit organizations. We then  used nonprofit organizations’ share of total health care sector revenues  from the Census Bureau’s Service Annual Survey 2006 as a proxy for  the portion of federal expenditures in these categories that may reach  nonprofit organizations. The actual amount of funds reaching  nonprofit organizations through Medicaid and SCHIP could be greater  or less than our estimate for several reasons including how similarly  the programs rely on nonprofit organizations compared with the health  care sector overall. To assess the reasonableness of our estimate, we  discussed our approach and findings with internal GAO experts,  officials at CMS, and compared our results with those of other  researchers.
Other Indirect Grants through States—For perspective on the  extent to which states collect data on federal funding passed through  to nonprofit organizations, we spoke to officials from the three states  obtaining the most federal assistance funds in 2006, based on the  FAADS data from that year—California, New York, Texas—as well as  two states suggested by others as developing information systems to  track those funds—Michigan and Maryland. We discussed their present  and planned activities to track these funds and, when available,  obtained limited information that they collected.
Credit—In addition to using data from FAADS, we assessed federal  funding to nonprofit organizations through credit programs by  examining the Office of Management and Budget’s (OMB) compilation  of data on federal credit programs in the President’s Budget. OMB  reports on the face value of federal credit outstanding as well as the  estimated future cost of outstanding federal credit.
Tax Policy—To assess the costs of tax policies that benefit nonprofit  organizations, we reviewed the literature on nonprofits and taxes and  reviewed estimates of the value of nonprofits’ tax exemption and the  revenue loss estimates associated with various specific tax  expenditures. In particular, we assessed estimates of the costs of  several specific tax expenditures that benefit nonprofit organizations  in the Department of the Treasury’s Office of Tax Analysis list of tax  expenditures and estimates of their cost as reported by OMB in the  President’s Budget submission. We had analyzed the development of  these estimates extensively for recent work. We did not attempt to  identify all tax expenditures that involve nonprofit organizations. In  several cases, estimates of the cost of tax expenditures include tax  expenditures involving nonprofit and other entities. For example, the  exclusion of interest for hospital construction bonds benefits nonprofit  and other hospitals. We were unable to distinguish the portion of these  tax expenditures that involved nonprofit organizations.
section_title: Appendix II: Nonprofit Identification in Key Data Systems
paragraphs: To assess how reliably nonprofit organizations are identified within key  data systems for our purposes, we tested random samples of populations  from various segments of these databases against alternative sources. We  tested samples of records in the Federal Awards and Assistance Data  System (FAADS), Federal Procurement Data System—Next Generation  (FPDS-NG), and Medicare’s Provider of Services (POS) and Health Plan  Management System (HPMS). For FAADS, our testing is based on a  sample of 96 records coded as nonprofit organizations and 97 records  coded as other entity types. For FPDS-NG, we tested 95 vendors that were  consistently coded as nonprofit organizations, and 96 vendors of all other  types. For the POS, we tested 96 providers including nonprofit and other  types. We tested 87 HPMS plans.
For each of these samples, we compared the nonprofit status of records  with organizations’ status in several sources including the Internal  Revenue Service’s Business Master File, the 2002 Census of  Governments, the 2005 Higher Education Directory, the American  Hospital Association’s 2007 Guide, and information from the Department  of Housing and Urban Development (HUD) that is compiled by the  National Housing Trust on housing developments. Since we relied on  matching organizations by name and location across these data sources,  we used our professional judgment based on the preponderance of the  evidence across multiple data sources in assessing whether a given  organization was a nonprofit or other entity type. Because of limitations  involved with name searches and the lack of comprehensive sources for  entities that are not nonprofit organizations, we were unable to verify the  status of a significant portion of sampled records in many of these data  sources, as shown in table 4 below. We also estimate that a significant  portion of records in FAADS and vendors in FPDS-NG are miscoded for  the purposes of our assessment. These are not necessarily errors since  these databases use various definitions of nonprofit organizations in their  systems, none of which align exactly with our definition of a nonprofit.
We used the same approach and sources to assess the portion of records  in FAADS labeled as private institutions of higher education that were  nonprofit organizations. Based on our tests of a sample of 96 records, we  estimate that 95 percent are nonprofit organizations (with a 95 percent  confidence interval of 88-98 percent).
section_title: Appendix III: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: In addition to the contact named above, Thomas James, Assistant  Director; Carol Patey, Analyst-in-Charge; James Ashley; Kathleen Boggs;  David Dornisch; Kathryn Edelman; Mark Egger; Shannon Finnegan; Quindi  Franco; Arthur James; Martha Kelly; Julia Kennon; Thomas McCabe;  Jessica Nierenberg; and Carolyn Yocom made key contributions to this  report.