Education Block Grant:

How Funds Reserved for State Efforts in California and Washington Are Used

HRD-86-94: Published: May 13, 1986. Publicly Released: Jun 25, 1986.

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Pursuant to a congressional request, GAO reviewed the California and Washington state education agencies' uses of Education Block Grant funds to determine the amount they used to support their administrative functions.

GAO noted that state education agencies: (1) may retain up to 20 percent of a state's allocation; (2) have limited restrictions on how to use their share of the funds; and (3) do not report to the Department of Education in any consistent format on how they use the funds. GAO found that, to obtain consistent information on the amount of block grant funds states use for administrative activities, the federal government would have to define administrative costs and require states to report information on those costs. GAO determined that, if Congress believes it best to restrict states' uses of block grant funds for administrative activities, possible options for doing so include: (1) prohibiting funding of state administrative activities with block grant funds; (2) limiting the funding of administrative activities with block grant funds; (3) decreasing the amount that state education agencies may retain; and (4) requiring that states spend a certain amount on programmatic activities.

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