A Single Federal Authority Is Needed for Establishing or Constructing Rehabilitation Facilities

HRD-79-84: Published: Aug 23, 1979. Publicly Released: Aug 23, 1979.

Additional Materials:


Office of Public Affairs
(202) 512-4800

The vocational rehabilitation program administered by the Department of Health, Education, and Welfare is to prepare the handicapped for employment. Legislation authorizes different Federal funding rates for State construction and establishment of rehabilitation facilities for the handicapped. This report discusses problems with using rehabilitation program funds for such facilities.

Overlapping criteria have resulted in problems and inconsistencies with project funding. Although the Rehabilitation Services Administration, Department of Health, Education, and Welfare (HEW) has issued policy interpretations for issues raised by State agencies, officials are not always aware of all of them since they are not routinely distributed. GAO found that State agencies stretched or ignored guidelines to approve projects for establishment funding, thus enabling them to obtain increased Federal funding. State rehabilitation agencies reviewed had not developed effective administrative procedures for controlling funds. The lack of adequate fiscal controls by some State agencies often resulted in expenditures not being accurately reported to HEW, and improper or questionable expenditures being made by the rehabilitation facilities.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Congress should amend the Rehabilitation Act of 1973 to create a single Federal authority for authorizing the States' use of basic program funds to: (1) construct new buildings; (2) acquire, expand, remodel, alter, or renovate buildings; and (3) pay for rehabilitation facility staff. The Congress should also maintain the provision in the 1973 act that requires the Hill-Burton formula for determining the Federal share for construction activities. The term "Federal share" should be amended to make the Federal funding rate for staffing under title I consistent with staffing rates under title III of the 1973 act. If Congress decides to maintain the separate funding authorities in the 1973 act, GAO recommends that the act's present restriction for construction (limiting Federal funding to 10 percent of the State's annual Federal funding for the vocational rehabilitation program) be revised to limit activities under both the construction and establishment authorities to 10 percent of a State's allotment.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of HEW should direct the Commissioner of the Rehabilitation Services Administration (RSA) to: review the expenditures for establishment and construction and make every reasonable effort to recover from State rehabilitation agencies Federal funding which did not clearly comply with Federal regulations and program requirements; establish a systematic process to assure that all Federal policy interpretations are forwarded and maintained by each RSA regional office and State agency; require the RSA regional staff to provide guidance and leadership to State agencies so that States implement adequate procedures and controls; and require the regional staff to monitor the adequacy of State agencies' procedures and controls, to assure the proper use of basic program funds. Pending consideration of the recommendation made by GAO to Congress that a single authority be developed, the Commissioner of RSA should revise the Federal regulations and program guidelines to: provide detailed instructions to State vocational rehabilitation agencies to help them implement the changes in the construction and establishment authorities made by the 1973 act, as amended; and identify and clearly differentiate between the types of activities eligible for funding under each authority.

    Agency Affected:


Explore the full database of GAO's Open Recommendations »

Feb 22, 2018

Feb 7, 2018

Jan 23, 2018

Dec 18, 2017

Nov 30, 2017

Sep 20, 2017

Sep 14, 2017

Sep 13, 2017

Jul 18, 2017

Looking for more? Browse all our products here