Sneak Preview: Oregon Audit Urges Level of Effort Clarity

June 13, 2012 | By Jerry Ashworth | Post a Comment

(The following was excerpted from an article in the Single Audit Information Service.) While most state auditor financial or performance audits offer recommendations specifically for entities within the state, a recent Oregon Audits Division report expanded that scope and urged federal agencies to consider the impacts of grantee level of effort requirements.

“Level of effort statutes lack clear, comprehensive and consistently written mandates,” the OAD said. “This may contribute to increased administrative burden and potential noncompliance. In addition, the inflexible nature of the requirements [creates] various other concerns.”

The federal government requires states and other grant recipients to provide a certain level of effort when receiving a federal award. For example, Oregon’s level of effort in fiscal year 2010 for the Temporary Assistance for Needy Families program was more than $97 million, all of which came from the state’s general fund. States may choose not to apply for federal funding if they believe they cannot comply with the level of effort requirements, but once participating they must maintain their commitments.

Although level of effort, which encompasses the “supplement, not supplant” requirement in the Office of Management and Budget Circular A-133 Compliance Supplement, is believed to be an effective way to protect programs from state funding cuts below a specified level, organizations such as the National Governors Association and the National Conference of State Legislatures have argued that such mandates reduce states’ control over program funding and decisionmaking, especially in a poor economy, the OAD said.

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