Drug-Free Communities Support Program: Stronger Internal Controls and Other Actions Needed to Better Manage the Grant-Making Process
Published: 2008-07-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Twenty-five percent of American students ages 13-17 reported using illicit drugs in 2007. The Drug-Free Communities Support Program provides grants to community coalitions involved in reducing youth substance abuse. The Office of National Drug Control Policy (ONDCP) administers the program. ONDCP selected the Substance Abuse and Mental Health Services Administration (SAMHSA) to operate the grant program in fiscal year 2005. In 2005, ONDCP did not award grants to some coalitions who had previously received grant funds (renewal grantees). GAO was asked to assess (1) the extent to which ONDCP and SAMHSA administered grant-related activities for fiscal years 2005 and 2006 consistent with federal internal control standards, statutory requirements, and other guidance and (2) the steps ONDCP has taken since 2006 regarding its administration of grant-related activities. GAO analyzed and compared program documents and grant activities to established guidance, such as federal internal control standards and statutory requirements, and interviewed key program management officials.
section_title: What GAO Found
paragraphs: In fiscal years 2005 and 2006, ONDCP and SAMHSA did not always adhere to applicable federal internal control standards, statutory requirements, and other guidance during the grant-making process. Standards for internal control in the federal government call for agencies to conduct ongoing monitoring of a program's performance, but ONDCP did not conduct such monitoring of SAMHSA or the program overall. Thus, ONDCP increased its risk of not providing reasonable assurance that SAMHSA conducted grant activities, such as eligibility screening. Internal control standards also require that agencies maintain documentation that grant applicants met eligibility requirements each fiscal year. While SAMHSA officials said that they screened all renewal grantees for eligibility in 2005 and ONDCP officials said they screened all initial grantees in 2006, documentation indicating that such screening had occurred was missing from 47 of the 66 grantee files GAO reviewed. ONDCP also lacked a process to ensure that all renewal applicants met statutory eligibility requirements. For example, ONDCP used a separate screening process in fiscal year 2005 that included a criterion that grantees limit funding for direct services, such as enrolling individuals in a drug prevention program. Only renewal grant applicants that met this or one of two other criteria underwent further screening for statutory eligibility. As a result, ONDCP funded about 86 percent of renewal grantees in 2005 without ensuring that they met the statutory eligibility criteria. Leading practices for collaborating agencies call for strategies to ensure common outcomes. However, the inter-agency agreement between ONDCP and SAMHSA did not fully define roles and responsibilities and lacked specific guidance to SAMHSA on eligibility screening. As a result, confusion occurred over issues, such as the eligibility criteria to apply, hampering the two agencies in their efforts to effectively manage the grant-making process. Since 2006, ONDCP has addressed some of the issues described above, by (1) clarifying its role for the program in its 2007 agreement with SAMHSA, (2) establishing management groups to address monitoring issues, and (3) eliminating its use of the direct services eligibility criterion. However, some internal control and other challenges remain. For example, ONDCP has not yet put a mechanism in place to ensure that documentation confirming eligibility is maintained in the grant files. ONDCP also has not documented its approach to overseeing SAMHSA and the program. Without defined oversight activities for ensuring completion of the work, ONDCP lacks reasonable assurance that required tasks are being performed in accordance with management's directives. Also, roles and responsibilities for key elements of grant administration remain largely undefined in that the agencies have not clarified certain services SAMHSA is to provide related to awarding grants or the role of the program Administrator. Without defining these roles, confusion on the steps to follow in managing the program could continue to occur. Finally, as in 2006, ONDCP officials told GAO that they did not screen renewal grant applicants for eligibility in 2007 because the screening that applicants undergo when they first receive a grant is sufficient.

section_title: Letter
paragraphs: Twenty-five percent of American students between the ages of 13 and 17  Twenty-five percent of American students between the ages of 13 and 17  reported using illicit drugs in 2007, according to a government survey. To  reported using illicit drugs in 2007, according to a government survey. ONDCP is led by a Director responsible for establishing a  President.
National Institute on Drug Abuse, Monitoring the Future (Washington, D.C.: 2007).
Pub. L. No. 105-20, 111 Stat. 224, codified at 21 U.S.C. § 1521 et seq.
The Drug-Free Communities Support Program supports community  coalitions in their efforts to address and reduce substance abuse among  youth by providing federal grants in the form of initial and renewal grants.  These initial and renewal grants are available to eligible coalitions in  amounts up to $125,000 for a fiscal year. By statute, eligible coalitions may  receive Drug-Free Communities Support Program grants for two 5-year  cycles (generally, an initial grant and four renewal grants per 5-year  cycle). According to ONDCP, a coalition, after award of an initial grant,  will continue to receive funds during the 5-year cycle if ONDCP  determines that the coalition makes satisfactory progress in its efforts to  reduce substance abuse among youth and the coalition complies with the  conditions of their award, and remains eligible for the grant. For example,  the coalition must have as its principal mission the reduction of substance  abuse in a comprehensive and long-term manner, with a primary focus on  youth in the community. Over the program’s 10-year existence,  approximately $550 million has been appropriated for grant awards.
The Drug-Free Communities Support Program has undergone  administrative changes in recent years. Since the program’s inception in  1997, ONDCP has delegated authority for the execution of certain grant  management activities to other agencies, as authorized by statute. From  fiscal years 1998 to 2004, ONDCP managed the Drug-Free Communities  Support Program in conjunction with the Office of Juvenile Justice and  Delinquency Prevention, an office within the Department of Justice (DOJ).  In fiscal year 2004, as a result of a recommendation from the program’s  Advisory Commission aimed at determining the appropriate agency to  execute certain grant management activities of the program, ONDCP  selected the Substance Abuse and Mental Health Services Administration  (SAMHSA), a component of the Department of Health and Human Services  (HHS), to help manage the program. Fiscal year 2005 was the first year  that the grant program was operated by ONDCP and SAMHSA under an  inter-agency agreement. During the fiscal year 2005 process, some renewal  grant applicants were denied a grant within their 5-year cycle by ONDCP,  which raised questions about how the grant program was administered  and how the grantee application review process was conducted during  that fiscal year.
You requested that we review the grant-related activities, including how  ONDCP and SAMHSA screened applicants to determine eligibility and  communicated with coalitions about the grant program. This report  addresses: (1) the extent to which ONDCP and SAMHSA administered  grant-related activities for fiscal years 2005 and 2006 in accordance with  federal internal control standards, statutory requirements, and leading  practices for collaborating agencies and (2) the steps ONDCP has taken  since fiscal year 2006, if any, concerning its administration of grant-related  activities.
To determine the extent to which ONDCP and SAMHSA conducted its  grant-related activities, including eligibility screening for the Drug-Free  Communities Support Program in accordance with Internal Control  Standards for the Federal Government, statutory requirements, and  leading practices for collaborating agencies, we reviewed available  documents such as grant announcements and inter-agency agreements  between ONDCP and SAMHSA and compared them to these criteria.  Further, to determine whether ONDCP and SAMHSA had documented  eligibility screening, we reviewed systematic random samples of available  grant applications for fiscal years 2005 and 2006. Because the 126  applications we reviewed (of which 66 were awarded grants) were not  representative of all of the approximately 1,690 applications, we cannot  generalize the results to the larger populations of fiscal year 2005 (about  990 applications) or fiscal year 2006 applicants (over 700 applications).  Even so, our review of these applications provided us with perspective on  how ONDCP and SAMHSA handled these applications. Additionally,  because accurate counts of the total numbers of applications in fiscal  years 2005 and 2006 were not available, we provide approximate numbers  of applications to illustrate orders of magnitude. We compared ONDCP’s  and SAMHSA’s grant-related activities in fiscal years 2005 through 2007  with criteria in GAO’s Standards for Internal Control in the Federal  Government. These standards, issued pursuant to the requirements of the  Federal Managers’ Financial Integrity Act of 1982 (FMFIA), provide the  overall framework for establishing and maintaining internal control in the  federal government. Also pursuant to FMFIA, the Office of Management  and Budget (OMB) issued Circular A-123, revised December 21, 2004, to  provide the specific requirements for assessing the reporting on internal  controls. Internal control standards and the definition of internal control  in OMB Circular A-123 are based on GAO’s Standards for Internal Control  in the Federal Government. We also considered our prior work on results- oriented government related to leading practices for federal  collaboration. In addition, we compared ONDCP’s and SAMHSA’s grant- related activities in fiscal years 2005 through 2007 with statutory criteria  included in the Drug-Free Communities Act of 1997; the Drug-Free  Communities Support Program Reauthorization Act of 2001; and the  Office of National Drug Control Policy Reauthorization Act of 2006.
To identify the steps ONDCP has taken since fiscal year 2006, if any,  concerning its administration of grant-related activities, we reviewed the  documents and grant applications described above. We also interviewed  key staff at ONDCP and SAMHSA about how they conducted and  documented grant-related activities since 2006. While our discussions with  agency officials from ONDCP and SAMHSA focused on the agencies’  review methods and funding decisions implemented in fiscal years 2005  and 2006, we also obtained information for fiscal year 2007 wherever  possible to provide the most current information on the program. We did  not review the fiscal year 2008 grant-making process because the process  was underway during our review and the results of the process were not  yet available.
We conducted this performance audit from July 2006 through July 2008 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. Additional details on our scope and  methodology are contained in appendix I.
subsections: section_title: Background
paragraphs: The Drug-Free Communities Act of 1997 established the Drug-Free  Communities Support Program. The program’s two major goals are to: (1)  establish and strengthen collaboration among communities, private non- profit agencies, and federal, state, local, and tribal governments to support  the efforts of community coalitions to prevent and reduce substance abuse  among youth; and (2) reduce substance abuse over time among youth and  adults by addressing the factors in a community that increase the risk of  substance abuse and promoting the factors that minimize the risk of  substance abuse. As authorized by statute, the Director of ONDCP may  employ any necessary staff and enter into contracts or agreements with  national drug control agencies, including inter-agency agreements to  delegate authority for the execution of grants and for such other activities  necessary to carry out the program.
Since the program’s inception in 1997, ONDCP has delegated certain grant  administration activities to other agencies through inter-agency  agreements. These inter-agency agreements are drafted each fiscal year,  reflecting the necessary changes and lessons learned from the previous  year, and are put into effect once they are agreed upon and signed by both  parties. In fiscal year 2005, ONDCP administered the program with  SAMHSA. This inter-agency agreement was the vehicle through which,  consistent with the terms of the statutory requirements, ONDCP sought to  ensure the proper management of the program. This inter-agency  agreement provided ONDCP with an opportunity to set forth the processes  and procedures for the award and management of grants.
An Administrator, appointed by the Director of ONDCP, is responsible for  carrying out a program to support communities in the development and  implementation of plans and programs to prevent and treat substance  abuse among youth. The Administrator is responsible for carrying out the  program, including setting forth various standards related to the statutory  eligibility requirements.
From fiscal years 1998 to 2004, the grant program was administered by the  Office of Juvenile Justice and Delinquency Prevention Programs,  organized under the Department of Justice and headed by the Office of the  Assistant Attorney General. From fiscal year 2005 to the present, the grant  program has been administered by SAMHSA, organized under the  Department of Health and Human Services and headed by its Secretary.  See figure 1 for an organizational overview of the program, including the  Office of Juvenile Justice and Delinquency Prevention Program’s past  involvement.
subsections: section_title: General Overview of the Drug-Free Communities Support Program Grant Management and Funding Process
paragraphs: Under the Drug-Free Communities Support Program, grantees receive  federal funds each fiscal year and are required to match federal grant  funds with non-federal funds including, at the discretion of the  Administrator, in-kind contributions for that fiscal year. Grantees may  receive funding on a fiscal year basis in two 5-year cycles (although  grantees must reapply each fiscal year), for a total of up to 10 years of  funding. There are two classes of applicants that a coalition may fall under  when applying for funding; each class of applicant has its own set of  requirements or characteristics, as shown below.
Initial grant applicants are those that are (1) either applying for their  first grant, (2) have received 5 years of funding and are applying for a  sixth year, or (3) have had a lapse in their funding in the previous fiscal  year.
Renewal grant applicants have received an award in the previous year  and are applying each fiscal year for funding for years 2 through 5 or  years 7 through 10. Renewal grant applicants generally do not compete  with other applicants for funds.
Each fiscal year, initial grant applicants submit their applications for  review. Those applications deemed eligible are then forwarded on for peer  review. Peer reviewers are external experts who examine applications and  score them on the basis of several areas, such as the extent to which a  coalition demonstrates effective strategic planning and implementation.  These scores are used to assess the applicant and range from 0 (lowest  score) to 100 (highest score). ONDCP then determines which coalitions  will receive funding, generally awarding grants from the highest peer  review score down until all of the funding has been used.
Each fiscal year, renewal grant applicants submit abbreviated  applications, which include a budget and work-plan, to SAMHSA. SAMHSA  reviews these applications to gather required information on the grant  applicant’s progress. Then, ONDCP determines whether to continue  federal grant support.
section_title: Administration of Drug-Free Communities Grant- Making Process Contained a Number of Implementation Weaknesses
paragraphs: The 2005 and 2006 grant award process of ONDCP and SAMHSA did not  adhere to standards for internal control in the federal government,  statutory requirements, and leading practices for collaborating agencies.  The process did not adhere to certain federal internal control standards  because ONDCP lacked mechanisms for monitoring SAMHSA and  ensuring that application reviews were fully documented. Furthermore,  ONDCP instituted procedures for screening grant applications that did not  ensure that all renewal grantees met statutory eligibility requirements.  Finally, ONDCP and SAMHSA experienced collaboration challenges, such  as a lack of fully defined roles and responsibilities and procedures for  conducting eligibility screening, which hampered their management of the  grant-making process.
subsections: section_title: The Grant Process of ONDCP and SAMHSA Did Not Adhere to Certain Internal Control Standards Related to Monitoring and Documentation
paragraphs: Standards for internal control in the federal government are essential for  proper stewardship of public resources because they help ensure  accountability and minimize operational problems. Having internal  controls that operate as intended related to monitoring and oversight  could provide assurance that SAMHSA is conducting its activities in  accordance with the inter-agency agreement signed by both agencies. In  addition, in managing the Drug-Free Communities Support Program,  adequate internal controls, such as ensuring proper documentation of  eligibility screening activities, are key to providing accountability in the  process.
According to internal control standards, management should provide  ongoing monitoring of performance. Neither the inter-agency agreement  between ONDCP and SAMHSA nor other documentation associated with  the grant-making process defined how ONDCP would oversee SAMHSA in  conducting its monitoring responsibilities. In July 2006, we reported that  in using inter-agency agreements, the issuing agency, among other things,  should clearly define roles and responsibilities for conducting monitoring  and oversight. However, the inter-agency agreement for fiscal year 2005  did not articulate such specific roles and responsibilities for each of the  two agencies. The statute states that ONDCP may enter into inter-agency  agreements with other national drug control agencies to delegate authority  for the execution of grants and for such other activities necessary to carry  out the program. As reflected in the legislative history of the Drug-Free  Communities Act of 1997, the ONDCP Administrator of the program would  use the terms of the inter-agency agreement to oversee the program and  ensure that it is operated and grants are awarded in accordance with the  policies and criteria established for the program.  However, our review of  the inter-agency agreement found no references about how ONDCP would  monitor SAMHSA in administering the grant-making process or a  description of roles related to these activities. Moreover, we found that no  specific policies and procedures for monitoring the program were  established before the grant process had begun.
Furthermore, ONDCP officials told us that while the inter-agency  agreement was intended to serve as the document for the monitoring,  oversight, and management of the program, they acknowledged that this  was not the case in fiscal year 2005, though officials told us that staff from  both agencies met periodically to review the grant program process.  ONDCP officials acknowledged, however, that they did not regularly  monitor and oversee the grant program because ONDCP expected  SAMHSA to carry out its duties as specified in the inter-agency agreement  and the funding announcement. Because ONDCP did not conduct ongoing  monitoring, the agency increased its risk that it could not provide  reasonable assurance that SAMHSA was conducting grant activities, such  as eligibility screening, according to ONDCP’s expectations.
Standards for Internal Control in the Federal Government call for  transactions and other significant events to be clearly documented and all  documentation to be properly managed and maintained. However, we  found that such documentation was not consistently maintained for  reviews of grant applications for statutory eligibility. Specifically, ONDCP  and SAMHSA did not provide us documentation on whether fiscal year  2005 renewal grant applicants were screened for statutory eligibility, as we  requested. As a result, we asked 10 SAMHSA project officers whether they  conducted the screening, of which 5 reported that they screened renewal  grant applicants for eligibility in fiscal year 2005. We also reviewed 66  grant application files for funded initial and renewal grantees, that covered  fiscal years 2005 and 2006, to determine whether the files contained  documentary evidence that screening for statutory eligibility had occurred.  Documentary evidence was missing from 47 of the 66 grant files (71  percent) we reviewed. Specifically, for fiscal year 2005, files for 21 funded  renewal grant applicants and 1 funded initial applicant contained no  documentation. For fiscal year 2006, 25 files for funded initial grant  applicants were missing documentary evidence that eligibility screening  took place. While our review cannot be generalized to all grant files for  fiscal years 2005 and 2006, the lack of documentation in most of the grant  files we reviewed indicates increased risk that neither ONDCP nor  SAMHSA could provide reasonable assurance that all funded grant  applicants were screened for eligibility.
In addition, the screening sheets used by agency officials to determine  whether an applicant was an eligible coalition did not include all of the  statutory eligibility criteria (see fig. 2 for our summary of the statutory  eligibility criteria).
Specifically, our review of an example of eligibility screening sheets used  for fiscal years 2005 and 2006, and our file review of 19 initial grantee  applications for fiscal year 2005 where eligibility screening sheets were  present, found that the eligibility criteria delineated in the screening sheets  used by ONDCP and SAMHSA officials to determine whether an applicant  was an eligible coalition omitted some of the statutory eligibility criteria.  For example, the screening sheet did not capture whether an applicant  had described and documented the nature and extent of the substance  abuse problem in the community; described the substance abuse  prevention and treatment programs and activities; developed a strategic  plan to reduce substance abuse among youth in a comprehensive and long- term fashion; and worked to develop a consensus regarding the priorities  of the community to combat substance abuse among youth as required by  statute. Nor did the screening sheet examine whether a coalition had  established a system to measure and report outcomes consistent with  common indicators and evaluation protocols established and approved by  the Administrator. Without having all of the statutory eligibility criteria  on the screening sheet, ONDCP increased its risk that all statutory  eligibility criteria were not assessed and met and that all funded grant  applicants were not statutorily eligible to receive either an initial or  renewal grant.
section_title: Grant Applicants Were Not Screened for Statutory Eligibility in Fiscal Years 2005 and 2006
paragraphs: For the Drug-Free Communities Support Program, by statute, a coalition  must meet each of the statutory eligibility criteria each fiscal year to be  eligible to receive an initial grant or a renewal grant. ONDCP  implemented a separate screening process, not described in the funding  announcement, for initial and renewal grant applicants 1 month before the  fiscal year 2005 grant awards were to be announced, including the  introduction of a criterion that grant applicants could not propose to use  over a certain percentage of grant funds for direct services. Direct services  are used to provide a distinct and ongoing service or activity for an  individual or group of individuals such as prevention programs. ONDCP  officials told us that they instituted this screening process because  SAMHSA did not produce evidence that all applications had been screened  for statutory eligibility in fiscal year 2005 and to ensure that funds were  awarded only to eligible coalitions, as required by statute. ONDCP officials  told us that because of time constraints, ONDCP did not review all of the  approximately 990 initial and renewal grant applicants to determine if they  met all of the statutory eligibility criteria. Instead, ONDCP officials said  that they established a separate screening process that would enable the  agency to more carefully scrutinize initial or renewal grant applicants who  met one or more of the three criteria, as described in table 1.
The separate screening process that ONDCP officials said they used for  the Drug-Free Communities Support Program in fiscal year 2005 differed  from the process for federal grant programs in general, as shown in   figure 3.
section_title: A C T U A L S C R E E N I N G P R O C E S S O N D C P U S E D i n 2 0 0 5
paragraphs: As a result of implementing its new screening  process 1 month before the fiscal year 2005  grants were to be announced, ONDCP officials  reported that they did not screen all initial and  renewal grant applicants for statutory eligibility.
section_title: T Y P I C A L S C R E E N I N G P R O C E S S
paragraphs: Doe ppliction  meet creening?
Doe pplicnt  meet eligiility?
The criteria and procedures ONDCP officials told us they implemented for  the separate screening process differed for initial and renewal grant  applicants. One key difference was the direct services threshold applied— 20 percent or more of funds could not be used for direct services for initial  grant applicants and 40 percent or more of funds could not be used for  direct services for renewal grant applicants. Table 1 describes the different  screening process and criteria ONDCP officials said they used for initial  and renewal grant applicants in fiscal year 2005.
In addition, ONDCP officials reported different outcomes for its separate  screening process for initial and renewal grant applicants. For the initial  grant applicants, ONDCP officials reported that all of the approximately  180 that were funded met the statutory eligibility requirements. However,  ONDCP officials acknowledged that most or about 515 of the  approximately 600 (about 86 percent) renewal grant applicants were  funded in fiscal year 2005 without ONDCP or SAMHSA ensuring that these  grantees satisfied the statutory eligibility criteria. The results of ONDCP’s  review are shown in figure 4.
Screened for statutory eligibility criteria and eligible for grants (180)
Satified tory eligiility criteria and were rded grnt(180)
About 55 grant applicants were screened for statutory eligibility criteria and were not eligible for grants and about 30 satisfied  statutory eligibility criteria and were awarded grants (85)
Were not screened for statutory eligibility criteria, but were awarded grants (515)
For the fiscal year 2006 screening process, ONDCP officials said they  applied the direct services criterion differently than in fiscal year 2005. The  direct services criterion was also described explicitly as an additional  eligibility criterion to be applied (that is, eligibility criterion apart from the  statutory eligibility criteria) in the 2006 funding announcement. For fiscal  year 2006, for initial grant applicants only, the 20 percent direct services  threshold was explicitly described in both the inter-agency agreement and  in the fiscal year 2006 funding announcement. The inter-agency agreement  between ONDCP and SAMHSA stated that “ONDCP shall review   applications for compliance with the 20 percent direct services policy.”  The funding announcement provided to initial grant applicants stated that  “No more than 20 percent of  grant funds may be  used for direct services.” The funding announcement also stated that if  initial grant applicants did not meet this eligibility requirement, their  applications would not be forwarded for peer review.
While ONDCP clarified the funding announcement for grant applicants in  fiscal year 2006, ONDCP did not screen renewal grant applicants for the  statutory eligibility criteria in fiscal year 2006 because, according to  ONDCP officials, these applicants were already considered to be  statutorily eligible for grant funds. ONDCP officials told us that they  believed that the initial eligibility screening conducted in a previous year  was sufficient for the 4 remaining fiscal years. However, the Drug-Free  Communities Support Program’s statutory framework requires that all  coalitions meet each of the statutory eligibility requirements each fiscal  year to be eligible to receive an initial grant or a renewal grant. As a result  of ONDCP’s policy in fiscal year 2006, all of the renewal grant applicants  that received renewal grants did so without ONDCP determining whether  these applicants satisfied the statutory eligibility criteria for that fiscal  year.
section_title: ONDCP and SAMHSA’s Grant-Making Process Was Hindered by a Lack of Defined Roles and Responsibilities and Written Policies and Procedures
paragraphs: ONDCP and SAMHSA experienced collaboration challenges, which  contributed to the irregularities we identified for fiscal years 2005 and  2006. In October 2005, we identified leading practices that can be used to  help enhance and sustain collaboration in instances where multiple  agencies have shared responsibility for a program or function. These  practices include, among other things, establishing mutually reinforcing or  joint strategies, agreeing on roles and responsibilities, and establishing  compatible policies, procedures, and other means to operate across  agency boundaries. Lack of fully defined roles and responsibilities and  documented procedures to follow for eligibility screening hampered the  efforts of ONDCP and SAMHSA to effectively manage the grant-making  process.
As we reported in our prior work, collaborating agencies need to establish  strategies that work in concert with those of their partners, which can help  in aligning partner agencies’ activities, core processes, and resources to  accomplish a common outcome. In fiscal years 2005 and 2006, ONDCP  and SAMHSA signed inter-agency agreements, which were intended to  provide a strategy for managing the grant-making process. Further, as  reflected in the legislative history of the Drug-Free Communities Act of  1997, the Administrator of the program would use the terms of the inter- agency agreement to oversee the program and ensure that it is operated  and grants are awarded in accordance with the policies and criteria  established for the program.
In June 2006, we reported that the use of inter-agency agreements  requires, among other things, that the issuing agency define roles and  responsibilities for managing the program. However, the inter-agency  agreement for fiscal year 2005 did not fully articulate roles and  responsibilities for ONDCP’s management of SAMHSA, such as the role of  SAMHSA in screening renewal grant applicants for eligibility, and for the  grant program overall. Therefore, in fiscal year 2005, confusion occurred  over the extent to which eligibility screening had taken place, resulting in  ONDCP implementing its separate screening process.
Furthermore, procedures governing the grant-making process were not  fully documented for the two agencies, as called for by internal control  standards for the federal government, to operationalize SAMHSA’s tasks.  The inter-agency agreement for fiscal year 2005 states that SAMHSA is  responsible for tasks in several broad areas, including issuing the notice of  funding, the application renewal process for renewal grantees, and making  decisions jointly with ONDCP regarding the selection of grantees and the  awarding of initial grantees and renewal awards. However, the inter- agency agreement did not specify what guidance SAMHSA was to follow  with respect to screening renewal grant applicants for eligibility. For  example, in the absence of detailed information on how ONDCP and  SAMHSA would screen initial and renewal grant applicants, SAMHSA  officials said they relied on established HHS grant guidance to determine  how and when activities such as eligibility screening were to be  performed. The inter-agency agreement also did not discuss how ONDCP  and SAMHSA would agree upon the policies to be followed in the grant- making process and how those policies would be documented. In addition,  ONDCP officials reported that they believed that SAMHSA had agreed to  conduct the eligibility screening, and when SAMHSA did not produce its  screening sheets, ONDCP officials said they could not be certain that  SAMHSA had conducted the eligibility screening. Without formal, written  policies and procedures both agencies experienced confusion over what  steps would be followed to manage the program.
section_title: ONDCP Has Taken Steps to Better Manage the Grant- Making Process, but These Efforts Can Be Strengthened
paragraphs: Since fiscal year 2006, ONDCP has taken steps to strengthen its  management of the grant-making process by establishing senior-level  management groups to address collaboration and monitoring issues,  eliminating its use of the direct services eligibility criterion in response to  reauthorizing legislation, and clarifying grant program roles and  responsibilities. However, effective oversight is still lacking because  ONDCP has neither developed nor documented its approach to monitoring  and overseeing the program as a whole. Furthermore, roles and  responsibilities for managing the program continue to remain fully  undefined, including the appropriate role of the program Administrator.  The ONDCP Reauthorization Act of 2006 prohibited the Director of  ONDCP from imposing any eligibility criteria on initial applicants or  renewal grantees not included in the statute. In response, ONDCP changed  certain procedures for fiscal year 2007 but has not changed its procedures  to ensure that renewal grant applicants are screened for statutory  eligibility.
subsections: section_title: Lack of Ongoing Monitoring, Documentation Problems, and Undefined Roles and Responsibilities Remain Challenges for the Grant- Making Process
paragraphs: In response to our inquiries about what steps have been taken to monitor  and oversee the grant program since fiscal year 2005, senior ONDCP  officials told us that they have taken action to clarify monitoring roles and  responsibilities and improve related documentation. However, effective  oversight is still lacking because ONDCP has neither developed nor  documented its approach to monitoring and overseeing the program as a  whole. According to ONDCP officials, to address long-term strategic issues  involving, among other things, monitoring activities, various senior-level  management groups have been established, at least one of which meets  every 4 to 6 weeks to address collaboration and monitoring issues. These  officials said that no charter or mission statements were developed for  these meetings, and officials were unable to provide us with information  on any specific outcomes or policy changes that have occurred to enhance  oversight of the program. The fiscal year 2007 inter-agency agreement  includes a brief statement that SAMHSA is to provide a monthly report on  high-risk grantees to ONDCP for, in their view, “the effective oversight” of  the program, but no other program monitoring and oversight information  is specifically discussed. Without defined oversight activities for ensuring  successful completion of the work across all activities, ONDCP lacks  reasonable assurance that required tasks are being performed in  accordance with its directives.
ONDCP officials acknowledged that they were aware that grant file  documentation was missing during fiscal years 2005 and 2006. However, as  of fiscal year 2007, ONDCP had not yet put in place mechanisms to ensure  that documentation of eligibility screening were included in grant files, as  called for by internal control standards. Nor had ONDCP amended the  eligibility screening sheets for fiscal year 2007 to capture all the statutory  eligibility criteria. Without ensuring that screening sheets contain all the  required statutory eligibility criteria, ONDCP increased its risk that  grantees were not statutorily eligible to receive grants.
ONDCP and SAMHSA have taken steps to clarify their respective roles and  responsibilities for handling program administration and coordination  issues in their fiscal year 2007 inter-agency agreement. For example,  whereas the inter-agency agreement for fiscal year 2005 did not delineate  roles and responsibilities for administering the grant-making process, the  inter-agency agreement written for fiscal year 2007 provides additional  information. Specifically, the fiscal year 2007 agreement includes a new  attachment describing ONDCP’s role and responsibilities for the program.  The fiscal year 2007 inter-agency agreement states, for example, that  ONDCP will convene “cooperative partners” meetings with the Center for  Substance Abuse Prevention to enhance program coordination and  collaboration. Further, the inter-agency agreement states that SAMHSA  would provide certain services in connection with the awarding of grants  in accordance with policies and procedures agreed upon by ONDCP and  SAMHSA. However, all of these policies and procedures that ONDCP and  SAMHSA agreed to are not documented in the inter-agency agreement or  in other documentation. For example, the agreement states that ONDCP  and SAMHSA shall agree on terms of the programmatic and budget review  prior to reviewing renewal applications and that ONDCP shall make final  funding decisions for these grants. However, the fiscal year 2007  agreement does not specify what the programmatic and budget review  processes are and when they should be completed and by which agency.
While efforts to clarify how the grant program is to be administered and  the designation of the Director of ONDCP as responsible for making final  funding decisions represents a step in the right direction, the  Administrator’s role is still not specified in the inter-agency agreement. As  noted earlier, the Administrator’s role is defined by statute as the entity  that generally carries out the grant program. While the fiscal year 2007  agreement states that the Director of ONDCP will make final funding  decisions, the role of the Administrator is not specifically identified,  described, or defined in the inter-agency agreement. Leading practices for  collaborating agencies state that agreement on roles and responsibilities is  a necessary element for a collaborative working relationship. Because  the Administrator is responsible for generally carrying out the grant  program, it is particularly important that the agencies agree upon and  document what this leadership role entails. Without doing so, confusion  over managing the program could continue to occur.
section_title: Despite ONDCP’s Elimination of Certain Eligibility Criterion in Response to Reauthorizing Legislation, ONDCP Did Not Screen Renewal Grantees for Statutory Eligibility
paragraphs: In response to congressional concerns and complaints from renewal grant  applicants that were not funded in fiscal year 2005, the ONDCP  Reauthorization Act of 2006 prohibited the Director of ONDCP from  imposing any eligibility criteria on initial applicants or renewal grantees  not included in the statute. ONDCP officials said that, as a result of the  prohibition in the reauthorizing act, they eliminated their use of the 20  percent direct services eligibility criterion for fiscal year 2007. Moreover,  the fiscal year 2007 inter-agency agreement no longer contains the 20  percent direct services criterion, consistent with the reauthorization act.  Instead, ONDCP officials stated that they take direct services into account  as part of the overall evaluation of an application during the peer review  process.
Nonetheless, ONDCP continues to not screen renewal grant applicants for  statutory eligibility. As stated earlier in this report, by statute, to be eligible  to receive a renewal grant, a coalition shall meet all of the statutory  eligibility criteria. However, ONDCP officials stated that they consider the  initial screening they conduct to be sufficient for the remaining 4 years for  renewal grantees. In fiscal year 2007, renewal grant applicants were not  required to submit any supporting documentation (e.g., proof of eligible  coalition members) to verify that they met all the statutory eligibility  criteria nor were they screened for statutory eligibility. ONDCP’s approach  does not take into account that a coalition’s eligibility status could change  from one fiscal year to another if, for example, representatives from the  different sectors in fiscal year 2006 left the coalition in fiscal year 2007 and  were not replaced. ONDCP’s decision to not screen renewal grant  applicants for eligibility in fiscal year 2007 raises questions about whether  the agency could provide reasonable assurance that participating  coalitions remain statutorily eligible. ONDCP officials told us that the  eligibility criteria that were missing from the eligibility screening sheets  (e.g., whether an applicant had described and documented the nature and  extent of the substance abuse problem in the community) are not used  during the eligibility process, but rather are considered during the peer  review process. However, these criteria are intended to be used to  determine statutory eligibility for grant funds. According to ONDCP’s  practices, peer reviewers do not typically determine eligibility; they  examine only eligible applications for an application’s strength. Without  ensuring that all statutory eligibility criteria were met, ONDCP cannot be  certain that all funded grant applicants were eligible.
section_title: Conclusions
paragraphs: For fiscal years 2005 and 2006, ONDCP and SAMHSA did not adhere to key  federal internal controls standards in the federal government and did not  meet all statutory requirements in administering the Drug-Free  Communities Support grant program. ONDCP has been unable to show  that only eligible coalitions received grants in accordance with the Drug- Free Communities Support Program’s statutory framework. In particular,  because ONDCP has decided not to conduct eligibility screening each  fiscal year for renewal grant applicants, it is unable to ensure that these  coalitions remain eligible for their duration in the program, consistent with  statutory requirements. Without well-functioning internal controls, such as  maintaining grant documentation and conducting on-going monitoring,  ONDCP cannot demonstrate consistent implementation of the key steps  required in the grant-making process—notably, the screening of grantees  to determine their eligibility—to Congress, grant-seeking applicants, and  the public at large. Such lack of assurance raises questions about whether  public resources are properly safeguarded.
ONDCP took steps following fiscal year 2006 to enhance its administration  of the grant program, such as informing applicants of changes in its  eligibility screening processes and revising its procedures to address  internal control and other deficiencies. However, ongoing weaknesses in  the monitoring and oversight of the program mean it may not be possible  to ensure that all appropriate guidance and policies are being met or  communicated to grant applicants. And while ONDCP and SAMHSA have  made an effort to define roles and responsibilities in the fiscal year 2007  inter-agency agreement, important functions, such as the leadership role  of the Administrator, remain unaddressed. Without fully defined and  agreed upon roles and responsibilities, the agencies may not be able to  avoid miscommunication and lack of collaboration over the grant-making  process in the future.
section_title: Recommendations for Executive Action
paragraphs: To strengthen its administration, oversight, and internal controls for the  Drug-Free Communities Support Program, we recommend that the  Director of the Office of National Drug Control Policy take the following  three actions:  1.  Develop and document its approach to monitoring and overseeing  SAMHSA and the program as a whole.  2.  Ensure that the coalitions receiving an initial grant or a renewal grant  satisfy all of the statutory eligibility criteria for each fiscal year and  that this is fully documented.  3.  Fully define the roles and responsibilities of SAMHSA and ONDCP,  including those of the Drug-Free Communities Support Program  Administrator, in the inter-agency agreement prepared for each fiscal  year.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to ONDCP, HHS, and DOJ for review  and comment. ONDCP and HHS provided written comments, which are  summarized below and included in their entirety in appendixes III and IV,  respectively. In addition, ONDCP and DOJ provided technical comments,  which we incorporated as appropriate.
In commenting on the draft report, the Director of ONDCP described the  efforts it has underway or planned to address our recommendations.  Although these actions are intended to strengthen the management of the  grant review process, based on the ONDCP Director’s response, additional  efforts could help ensure that our recommendations are fully  implemented, as discussed below.
Regarding our first recommendation on developing and documenting an  approach to program monitoring and oversight, the Director noted that  ONDCP has added more detail in the inter-agency agreement on the roles  and responsibilities of ONCDP and SAMHSA and created and implemented  a policy manual for the program, which was implemented in 2007.  However, our analysis of ONDCP’s policy manual showed that it does not  include information on whether and how ONDCP will conduct oversight  and monitoring. The Director also stated that ONDCP has documentation  of minutes and activities that take place at their monthly interagency  management meetings. During our review, we repeatedly requested these  minutes but ONDCP officials said that no formal minutes were developed  or maintained and did not provide them. However, we have modified the  report to delete the statement that minutes were not available. We  continue to believe that this recommendation remains valid because,  without defined oversight activities for ensuring successful completion of  the work across all activities, ONDCP increases its risk that it cannot  provide reasonable assurance that required tasks are being performed in  accordance with its directives.
Concerning our second recommendation that ONDCP ensure that the  coalitions receiving an initial grant or a renewal grant satisfy all of the  statutory eligibility criteria for each fiscal year and that these decisions are  fully documented, the ONDCP Director noted that they have taken steps to  ensure that all renewal applicants are screened for eligibility, consistent  with our recommendation, and documentation related to screening  applicants is maintained in grant files. However, the ONDCP Director took  issue with our position that all statutory eligibility requirements should be  included on the screening sheets used to document application reviews.  The Director said that the initial joint review by ONDCP and SAMHSA  staff, combined with the application review and scoring process  conducted during peer reviews, effectively ensure that applications  recommended for funding meet statutory eligibility requirements.  However, we continue to maintain that including all statutory eligibility  requirements on the screening sheets could increase ONDCP’s assurance  that all funded applicants are statutorily eligible and that these decisions  are fully documented.
Regarding the third recommendation on clearly defining roles and  responsibilities, the ONDCP Director noted that ONDCP plans to add  additional details to the inter-agency agreement on the role of the Drug- Free Communities Support Program Administrator.
The ONDCP Director commented on some of the data we presented in this  report. Specifically, the Director expressed concern that we were unable  to accurately identify the number of applications for fiscal years 2005 and  fiscal years 2006, noting that ONDCP had provided us with spreadsheets  that identified the number of applications received and their disposition.  During our review, we worked continuously with ONDCP officials in an  effort to obtain accurate data on the number of applications received.  Nonetheless, we were unable to do so because, despite our numerous  attempts, we could not resolve inconsistencies in the information ONDCP  provided over the course of our review, causing us to question its  accuracy. However, we believe that the numbers we present on grant  applications are sufficient to illustrate orders of magnitude. We revised  our scope and methodology discussion in appendix I to explain the efforts  we took to obtain the most accurate information available from ONDCP.
Moreover, the Director took issue with our presentation of ONDCP’s data  in figure 4, which showed that ONDCP excluded approximately 190 initial  applicants in fiscal year 2005 from the possibility of being funded without  being screened for statutory eligibility. He indicated that by doing so  ONDCP would have incurred an unnecessary expenditure of taxpayer  dollars to review applications which fell below the funding threshold  (range of peer review scores for which applicants are awarded funding).  We agree that taxpayer dollars should not be expended unnecessarily.  However, we disagree that figure 4 conveys the point the director is  asserting; rather, our analysis of ONDCP’s data shows that some of these  approximately 190 initial applicants had peer review scores above the  funding threshold and were excluded on the basis of one or more of the  other criteria in the separate screening process.
The Assistant Secretary for Legislation at HHS also commented on a draft  of this report. Specifically, he described actions that SAMSHA has taken,  in partnership with ONDCP, to strengthen internal controls and  management of the DFC grant program. For example, the Assistant  Secretary said that program information has been consolidated into the  SAMHSA Drug-Free Communities Support Program Operations Manual,  SAMHSA and ONDCP officials are meeting monthly to enhance inter- agency coordination, and SAMHSA and ONDCP are currently jointly  screening applications for statutory eligibility and SAMHSA retains the  screening checklists.
As agreed with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 30 days from the  date of this report. At that time, we will send copies of this report to the  Director of the Office of National Drug Control Policy, the Secretary of the  Department of Health and Human Services, the Attorney General of the  Department of Justice, and interested congressional committees. We will  also make copies to others upon request. In addition, the report is  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff members have any questions regarding this report or  would like to discuss it further, please contact me at (202) 512-6806 or by  email at goldenkoffr@gao.gov. Contact points for our Office 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 V.
section_title: Appendix I: Scope and Methodology
paragraphs: To examine the extent to which Office of National Drug Control Policy  (ONDCP) and the Substance Abuse and Mental Health Services  Administration (SAMHSA) conducted its screening and grant-related  activities for the Drug-Free Communities Support Program in accordance  with standards for internal control in the federal government, established  laws, and leading practices for collaborating agencies, we reviewed  available program documents, including, but not limited to, the Request  for Applications funding announcements; the inter-agency agreements  between ONDCP and SAMHSA, and the documented outcomes of specific  review activities and recommendations for grant funding decisions. We  compared ONDCP’s and SAMHSA’s grant-related activities in fiscal years  2005 through 2007 with criteria in GAO’s Standards for Internal Control  in the Federal Government. These standards, issued pursuant to the  requirements of the Federal Managers’ Financial Integrity Act of 1982  (FMFIA), provide the overall framework for establishing and maintaining  internal control in the federal government. Also pursuant to FMFIA, the  Office of Management and Budget (OMB) issued Circular A-123, revised  December 21, 2004, to provide the specific requirements for assessing the  reporting on internal controls. Internal controls and the definition of  internal control in OMB Circular A-123 are based on GAO’s Standards for  Internal Control in the Federal Government. We also considered our prior  work on results-oriented government related to leading practices for  federal collaboration as well as leading practices for awarding grants. In  addition, we compared ONDCP and SAMHSA’s grant related activities in  fiscal years 2005 through 2007 with statutory criteria included in the Drug- Free Communities Act of 1997, the Drug-Free Communities Support  Program Reauthorization Act of 2001, and the Office of National Drug  Control Policy Reauthorization Act of 2006. Further, to determine  whether ONDCP and SAMHSA had documented eligibility screening, we  reviewed grant applications for fiscal years 2005 and 2006. We did not  review all available applications because this was not practical. Instead,  we attempted to select probability samples of applications to review; this  would have allowed us to generalize the results to all of the fiscal year  2005 and 2006 applications (about 990 and over 700, respectively, for a  total of about 1,690). However, because ONDCP and SAMHSA were unable  to provide accurate counts of the total numbers of applications in either  year, we were unable to do so. We made numerous attempts to resolve  inconsistencies in the information ONDCP provided over the course of our  review, which caused us to question its accuracy. Consequently, we  reviewed systematic random samples of available funded and unfunded  applications for these years. For fiscal year 2005, we reviewed 20 funded,  initial applications and 21 funded, renewal applications, 30 unfunded,  initial applications, and 20 unfunded, renewal applications. For fiscal year  2006, we reviewed 25 funded, initial applications and 10 unfunded, initial  applications. Although the applications we reviewed for both fiscal years  were randomly selected, because the applications were not representative  of all applications in either year we cannot generalize the results to the  larger populations of fiscal year 2005 or 2006 applicants. Even so, our  review of these 126 grant applications provided us with perspective on  how ONDCP and SAMHSA handled these applications. Additionally,  because accurate counts of the total numbers of applications in fiscal  years 2005 and 2006 were not available, we provide approximate numbers  of applications to illustrate orders of magnitude.
In addition to our review of documents and grant files described above, we  interviewed key staff at ONDCP and SAMHSA about how they conducted  and documented grant-related activities since 2006. While our discussions  with the agency officials from ONDCP and SAMHSA focused on the  agencies’ review methods and funding decisions implemented in fiscal  years 2005 and 2006, we also obtained information for fiscal year 2007  wherever possible to provide the most current information on the  program. We did not review the fiscal year 2008 grant-making process  because the process was underway during our review and the results of  the process were not yet available.
We conducted this performance audit from July 2006 through July 2008 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.
section_title: Appendix II: Timeline of Key Events for Drug- Free Communities Support Program, Fiscal Year 2005
paragraphs: This appendix presents a timeline of key events for the Drug-Free  Communities Support Program in fiscal year 2005.
section_title: Appendix III: Comments from the Office of National Drug Control Policy
section_title: Appendix IV: Comments from the Department of Health and Human Services
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, key contributors to this report  were Glenn G. Davis, Assistant Director, Lisa G. Shibata, David P.  Alexander, Duren Banks, Amy Bernstein, Randall J. Cole, Willie Commons  III, Daniel S. Kaneshiro, Alison Martin, Linda S. Miller, Jan B. Montgomery,  Raymond J. Rodriguez, and Adam Vogt.