Low-Income Home Energy Assistance:

HHS Has Not Assured State Compliance With Administrative Cost Restrictions

HRD-91-15: Published: Nov 13, 1990. Publicly Released: Nov 13, 1990.

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GAO examined Georgia community action agencies' (CAA) use of federal funds to pay for costs of administering the Department of Health and Human Services' (HHS) Low-Income Home Energy Assistance Program (LIHEAP).

GAO found that: (1) Georgia's Department of Human Resources reported that CAA administrative costs for LIHEAP usually exceeded the 10-percent cap; (2) Georgia did not have procedures in place to monitor whether CAA spent other federal funds for LIHEAP administrative costs; (3) CAA in Athens and Atlanta each planned to use between $35,000 and $40,000 in other federal funds for LIHEAP administrative costs during fiscal year 1990; (4) since Georgia allocated and expected to spend the full 10 percent of its LIHEAP funds for administrative costs, CAA use of other federal funds would exceed the 10-percent cap on federal funding of LIHEAP administrative costs; and (5) HHS reviews of state compliance with statutory LIHEAP requirements were not designed to identify such noncompliance.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: HHS issued a memorandum, dated April 11, 1991, advising states and other grantees to adopt and implement specific policies and procedures on the use of other federal funds for LIHEAP planning and administration activities or costs.

    Recommendation: Since CAA in Georgia planned to spend other federal funds for LIHEAP administrative costs, which probably would have caused the state to exceed the 10-percent cost cap, and the fact that HHS compliance reviews are not designed to detect this spending, the Secretary of Health and Human Services should direct the Assistant Secretary, Family Support Administration, to require states to have a clear policy on whether other federal funds can be used to pay LIHEAP administrative expenses.

    Agency Affected: Department of Health and Human Services

  2. Status: Closed - Implemented

    Comments: HHS issued a memorandum, dated April 11, 1991, advising states and other grantees to adopt and implement specific policies and procedures on the use of other federal funds for LIHEAP planning and administration activities or costs. HHS specifically noted that these policies and procedures should also apply to subrecipients.

    Recommendation: Since CAA in Georgia planned to spend other federal funds for LIHEAP administrative costs, which probably would have caused the state to exceed the 10-percent cost cap, and the fact that HHS compliance reviews are not designed to detect this spending, the Secretary of Health and Human Services should direct the Assistant Secretary, Family Support Administration, to require states that use CAA to provide LIHEAP services to have adequate procedures in place to ensure that CAA using community services block grants or other federal funds to administer LIHEAP do not cause the state to exceed the 10-percent ceiling on the use of federal funds for administrative costs.

    Agency Affected: Department of Health and Human Services

  3. Status: Closed - Implemented

    Comments: In March 1991, HHS revised its LIHEAP compliance review guide to include steps to identify if other federal funds are used for LIHEAP administrative costs and whether such funds would exceed the 10-percent ceiling.

    Recommendation: Since CAA in Georgia planned to spend other federal funds for LIHEAP administrative costs, which probably would have caused the state to exceed the 10-percent cost cap, and the fact that HHS compliance reviews are not designed to detect this spending, the Secretary of Health and Human Services should direct the Assistant Secretary, Family Support Administration, to revise HHS compliance review guides to include steps to assess whether other federal funds are being used for LIHEAP administrative and planning costs to ensure that states and their local administering agencies are adhering to the 10-percent ceiling on the use of federal funds for administrative costs.

    Agency Affected: Department of Health and Human Services

 

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