Federal Grants to State and Local Governments (2024)

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Issue Summary

The federal government awards hundreds of billions of dollars in grants to state and local governments each year.These grants help finance a broad range of services, including health care, education, social services, infrastructure, and public safety.

Federal Grants to State and Local Governments and Medicaid, FYs 2010-2022

Federal Grants to State and Local Governments (1)

However, administering grants on this scale comes with anumber of challenges. For example:

  • Streamlining. The COVID-19 pandemic triggered office closures and other measures that could make it hard for organizations to meet the requirements for getting and using federal grant funding. In response, the Office of Management and Budget (OMB) issued 15 temporary exceptions to its requirements for how federal agencies administer grants. For example, agencies could allow grantees to delay reporting financial information by 3 months. All these flexibilities expired by Dec. 2020. But was this the best way to decrease administrative burdens while still preventing waste, fraud, and abuse? OMB should gather information on lessons learned and share the results.
  • Transparency. Greater transparency of grant spending helps Congress and the public understand how and where federal grants are spent. However, the federal government’s official source of spending data, USAspending.gov, needs to improve its timeliness, completeness, and accuracy.
  • Effective oversight. In March 2021, the American Rescue Plan Act appropriated $350 billion in State and Local Fiscal Recovery Funds to help with the COVID-19 pandemic. The Treasury is responsible for administering and monitoring these funds. Officials in selected states and localities identified challenges with how Treasury administers these funds. For example, Treasury has a contact center to respond to recipients' questions. But some state and local officials said that the center's phone and email assistance was not timely—partly due to limited staffing.

Recent Reports

Grants Management: Observations on Challenges with Access, Use, and Oversight GAO-23-106797 Published: May 02, 2023Publicly Released: May 02, 2023
Federal Spending: Information on U.S. Funding to Entities Located in China GAO-23-105538 Published: Apr 12, 2023Publicly Released: Apr 12, 2023
Broadband: National Strategy Needed to Guide Federal Efforts to Reduce Digital Divide GAO-22-104611 Published: May 31, 2022Publicly Released: May 31, 2022
Federal Spending Transparency: Opportunities Exist to Further Improve the Information Available on USAspending.gov GAO-22-104702 Published: Nov 08, 2021Publicly Released: Nov 08, 2021
COVID-19: Additional Actions Needed to Improve Accountability and Program Effectiveness of Federal Response GAO-22-105051 Published: Oct 27, 2021Publicly Released: Oct 27, 2021
Economic Development: Opportunities Exist for Further Collaboration among EDA, HUD, and USDA GAO-21-579 Published: Jul 30, 2021Publicly Released: Jul 30, 2021
COVID-19: Sustained Federal Action Is Crucial as Pandemic Enters Its Second Year GAO-21-387 Published: Mar 31, 2021Publicly Released: Mar 31, 2021
Grants Management: OMB Should Collect and Share Lessons Learned from Use of COVID-19-Related Grant Flexibilities GAO-21-318 Published: Mar 31, 2021Publicly Released: Mar 31, 2021
Grants Management: Agencies Provided Many Types of Technical Assistance and Applied Recipients' Feedback GAO-20-580 Published: Aug 11, 2020Publicly Released: Sep 10, 2020
Data Act: Pilot Effectively Tested Approaches for Reducing Reporting Burden for Grants but Not for Contracts GAO-19-299 Published: Apr 30, 2019Publicly Released: Apr 30, 2019

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GAO Contacts

Federal Grants to State and Local Governments (2)

Beryl (Berri) H. Davis

Managing Director


(202) 512-2623

Federal Grants to State and Local Governments (3)

Jeff Arkin



(202) 512-6806

Federal Grants to State and Local Governments (2024)
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