Strengthening the Partnership in
Intergovernmental Service Delivery

NPR Recommendations

FSL01Improve the Delivery of Federal Domestic Grant Programs
FSL02Reduce Red Tape Through Regulatory and Mandate Relief
FSL03Simplify Reimbursement Procedures for Administrative Costs of Federal Grant Disbursement
FSL04Eliminate Needless Paperwork by Simplifying the Compliance Certification Process
FSL05Simplify Administration by Modifying the Common Grant Rules on Small Purchases
FSL06Strengthen the Intergovernmental Partnership

Progress to Date

To improve dramatically the delivery of federal domestic grants, the Administration has encouraged agencies to use their existing waiver authority and seek new waiver authority to allow bottom-up innovation in the intergovernmental service delivery system. From January 1993 through June 1996, President Clinton approved more than 67 welfare demonstration projects in more than 40 states. He has also approved 13 comprehensive Medicaid reform demonstrations permitting states to increase greatly their use of managed care, to subsidize health insurance for employed but uninsured workers, and to expand Medicaid eligibility by increasing income limits. The President has also granted 19 states Medicaid waivers as part of larger welfare reform demonstrations.

Congress has granted agencies additional waiver authorities. The Secretary of Education was authorized to waive statutory requirements in the Goals 2000: Educate America Act (Public Law 103-227), the School to Work Opportunities Act (Public Law 103-239), and the Improving America's Schools Act (Public Law 103-382) to clear the way for better teaching and learning. He has approved more than 100 waivers under these authorities. The Department of Education also may devolve its waiver authority to 12 states under the Ed-Flex program which provides flexibility to state education agencies. In exchange for agreeing to greater accountability for results (e.g., academic performance of their students), Ed-Flex states are given the authority to waive federal statutes for themselves and their school districts, rather than submit waiver requests to the Secretary of Education. Eight Ed-Flex states have been designated so far. Similarly, the Secretary of Labor has new authority to waive certain regulations of the Job Training Partnership Act to help states and communities achieve workforce goals. And pending before Congress is a bill, the Local Empowerment and Flexibility Act (S. 88, H.R. 2086), that would give broader waiver authority to most federal agency heads to provide flexibility to states and communities in achieving results.

To restrict unfunded mandates by federal agencies, President Clinton signed Executive Order 12875 in 1993. Congress later passed the Unfunded Mandate Reform Act of 1995 (Public Law 104-4) to limit its ability to impose new mandates on state and local governments without providing funds. It also requires greater intergovernmental consultations in the administrative rulemaking process, and allowance for the least costly and most effective means of complying with federal regulations.

In April 1995, OMB revised Circular A-87 to encourage federal agencies to test fee-for-service procedures for cost reimbursement to states and localities. A fee-for-service alternative would be simpler than the existing cost allocation rules and would encourage cost containment. In addition, OMB revised the common rules for small purchases by local governments by increasing the dollar threshold from $25,000 to $100,000.

The Administration has undertaken a series of initiatives to strengthen the intergovernmental partnership. First, it created the Community Empowerment Board, chaired by the Vice President, to oversee a process whereby member agencies may grant waivers. Eleven empowerment zones and 94 empowerment communities were designated in December 1994. Each of these entities is provided with additional flexibility, funding, and tax incentives to implement their community-developed, comprehensive, strategic plans.

Second, the Administration is reforming the federal grant process into a system of performance partnerships to be more responsive to locally perceived needs and bottom-up planning strategies. In his FYs 1996 and 1997 budgets, President Clinton proposed performance partnerships that would consolidate over 200 existing programs in the areas of public health, rural development, education and training, housing and urban development, transportation, and the environment. This initiative exemplifies the replacement of a program-oriented mentality with a comprehensive approach to problem solving; it signals a shift away from the present emphasis on how to manage federal grant programs toward an emphasis on getting results. To date, Congress has authorized two of these six partnerships.

The Federal Agricultural Improvement and Reform Act of 1996 (Public Law 104-127) creates three rural development performance partnerships in which a large number of rural utility, economic development, and housing programs will be administered together in a flexible manner and focused on results. The Environmental Protection Agency's (EPA's) performance partnerships legislation (Public Law 104-134) passed in early 1996; by May, Colorado and Utah had signed performance partnership grants with the agency. They can now decide how many of their environmental grants (air, water, hazardous waste, toxic substances, etc.) they want to combine into one "multimedia" (air, water, solid waste) partnership grant to achieve better environmental results.

Other federal agencies are forging ahead without waiting for the passage of legislation still pending before Congress. The Department of Health and Human Services, for example, convened meetings with over 1,000 stakeholders around the country to develop a list of desired results in each of the performance partnership grant areas (substance abuse, mental health, immunization, chronic diseases, etc.).

Separately, NPR has facilitated a series of administratively designated partnerships with states and localities. The Oregon Option a 1994 partnership with the state of Oregon focuses on bringing together community, local, state, and federal agencies to agree on desired results, how to accomplish them, how to measure them, and how to break down barriers to achieving them. NPR also facilitates the Connecticut Neighborhood Revitalization Partnership, which is based on that state's innovative law requiring the state and its municipalities to break down barriers in response to neighborhoods' comprehensive plans and measurable goals to revitalize their economies and neighborhoods. In February 1996, Vice President Gore and other federal officials joined the governor and other state officials in signing an agreement to eliminate federal, state, and local barriers to develop and revitalize Connecticut's poorest communities.

Finally, four areas -- metro Atlanta, metro Denver, the District of Columbia, and the state of Nebraska -- have joined with the federal government to reduce crime and violence in a project called Pulling America's Communities Together (PACT). Through Project PACT, the federal government is vigorously fostering and supporting the development of broad-based, fully coordinated local and statewide initiatives that work strategically to secure community safety. Additionally, EPA, through its brownfields initiative, is providing new flexibility to states and communities to return contaminated urban lands to productive use.

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