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2. OED has developed and implemented written procedures spelling out in detail the various steps in the funding/ refunding process. This system will establish a rational and completely uniform basis for decision-making and problem solving.

OED had insufficient staff to effectively monitor the program.
Staff lacked necessary skills to perform functions.

b. Action Steps

1. OED staff ceilings under the reorganization have been
increased by a net of 4 positions (from 38 to 42).
Reduction of clerical staffing, enabled by the reorganization
of clerical support into a central word processing unit
using highly sophisticated equipment, will permit an actual
increase of six professional positions, all concentrated
into specialized, technically skilled jobs, including
business analysts, a computer system analyst, and an
evaluation specialist.

2. The greater division of labor among existing staff under the new organization will significantly increase accountability and enable a need assessment of available staff to be undertaken.

3. Specific training plans have been developed. One major
training effort is already underway: 17 employees
(primarily generalist program analysts) have been en-
rolled in a special 14-week course in Introductory
Accounting. Conducted by George Washington University,
for 2-1/2 hours each week, it is the first in a series
of courses to enable program analysts to more effectively
review and evaluate grantee audits and financial reports.
It will be followed by courses in financial analysis
and cost accounting. Business analysts have been enrolled
in more advanced college-level training programs.

4. Recognizing limitations of current OED staff, even with
expansion and training, OED is significantly increasing
its reliance on outside technical assistance and support.
As noted previously, two major contracts have already been
let to provide intensive management and technical assistance
to the new planning grants and to assist OED in the design

5.

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and implementation of an MIS. Special small contracts have
also been let or are planned to provide specialized intensive
assistance to probationary and transitional CDCs in meeting
individual management and venture problems. All existing
grants providing support services to CDCs - legal, program,
and management technical assistance and staff/board
training--have been grouped under one OED division where a
comprehensive coordinated work plan is being developed to
ensure maximum utilization of existing resources to eliminate
duplication of effort and to fill indentified gaps.

The absence of a full range of objective and quantifiable performance measures coupled with a lack of constant application of performance measures have had a negative effect on the program.

b. Action Steps

1. During the funding process, no work plan will be accepted
unless there are detailed goals and objectives which are
quantifiable, measurable, and prioritized. These goals
and objectives at a CDC level will be the basis for
evaluating and monitoring performance aganist plans.

2. Each component project for which funds will be released
by OED must contain similarly clear, quantifiable per-
formance measures.

3. As a first step towards a performance related approach,
a detailed profile of each CDC is currently being developed
that will include an analysis of:

4. Under review for immediate implementation, both on a policy and programmatic level, is a measurement framework grouped

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into the following five areas:

Labor (human development, employment, and income)
Physical environment (community stability, social
and community development

Social Environment (community stability social and
community development)

Money (loans, equity and income)

Institutions (institution-building, self-sufficiency, and a viable CDC.

As a laboratory and incubator, OED is charged with originating new approaches to economic development. OED has also been recently criticized by Congress for failing to "take the lead in developing new approaches to dealing with the problems of poverty, similar to those developed in the earlier years of OED..".

Four new programs have been implemented to meet this challenge, offering exciting alternatives to massive unemployment and to rural and Indian economic development.

1. The National Rural Development and Finance Corporation

Recognizing that the CDC model is not adequate for rural economic
development, OED has awarded a $3 million grant to the National
Rural Development and Finance Corporation, a coalition of over
50 organizations with combined membership of over 5 million rural
poor people, to create a comprehensive, nationwide strategy for
rural economic development.

2. Special Indian Development Program

Tribal ownership and native traditions are in conflict with standard business ownership patterns and institutions. In order to accomodate Indian needs and to encourage, rather than impede, economic development on reservations, all Indian programs are now being consolidated into a special developmental and demonstration program which will attempt to merge business needs with Indian forms of ownership.

3. National Center for Economic Alternatives

The recent closing of the steel mill in Youngstown, Ohio, the town's
largest employer, will mean that about 5000 workers will lose their
jobs. OED has awarded a seed money contract to the National Center
for Economic Alternatives (NCEA) to enable them to develop a plan
and to work with a coalition of religious and civic leaders to find
private, state, and federal funds to enable the community, through
a community/employee stock ownership plan, to buy and modernize the

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steel plant and save the jobs. NCEA and OED are preparing a nation-
wide program designed to forecast job losses by region and by industry.
This plan will allow local communities, with NCEA help, to become
aware of the impending crisis with plenty of time to mobilize local,
state, and federal resources to prevent massive unemployment with all
the attendant social costs before its happens.

The Department of Housing and Urban Development has been intrigued enough by the idea to add a $300,000 grant to the initial CSA money. NCEA is also negotiating with EDA, ERDA, and other federal departments to aid Youngstown.

4. Youth Employment in the Private Sector

In response to the President's concern that poor and minority youths
receive rapid assistance from federal agencies in procuring
employment, OED awarded $2.8 million in grants to 6 CDCs for jobs
for young people. By November 1, 1977, 350 youths had been placed
in private sector jobs with career potential. The success of this
effort encouraged the Department of Labor and the Department of
Housing and Urban Development to enter into negotiation with OED
for additional youth employment programs using CDC as the prime
delivery mechanism at the local level.

Recognizing the need for maximizing the impact on specific target areas through a more rational flow of resources, OED has also initiated close working relationships with the following agencies in selected areas of common interest:

Department of Labor

Youth Employment

Youth Enterprise Development

Special Economic Stimulus Program-Migrants

Department of Agriculture

Special Rural Initiatives-Small Farm Preservation
Cooperative Development

Rural Housing Inventory

Access to Loan and Grant Programs

Department of Housing and Urban Development

Neighborhood revitalization and preservation

through support of community based organizations

Urban and Indian Housing Inventory

Access to new construction, property management, and

25-371 - 78 - 5

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rehabilitation programs

Economic Development Administration

Joint funding on a limited group of community based organizations
Access to loans, grants, and planning programs

REGIONAL OPERATIONS

CSA had been urged to provide increased support for Regional Offices with respect to proper staffing and annual review. In response CSA's Office of Community Action sent a management anaylsis team to each Regional Office. Based on their observations, comprehensive plans were developed for reorganizing those Offices so that they might better serve the interests of the Government and grantees. Section III. A. of this Report details the status of the Reorganization.

CSA's efforts vis-a-vis Regional Offices are designed to strengthen the monitoring and technical assistance capabilities of those Offices. In this manner, effective grantees will be given assistance to do their jobs better - others will have their deficiencies addressed long before they begin impacting negatively on their operations. However, in those instances where this assistance is to no avail, CSA will act decisively to uphold its statutory and administrative responsibilities.

As of February 1, 1978, a Regional Coordination Division was established in the Office of Regional Operations. The Division's prime responsibility is to support Regional Offices in meeting their responsibilities. Lines of communication which have long been dormant have been reopened. This is particularly important with regard to Regional followup on CSA Inspection reports or other indications of defective operations at the grantee level.

PROFESSIONAL ASSOCIATIONS

On December 15, 1977, CSA published a regulation governing the payment of membership dues and related expenses to professional organizations. This regulation prohibits the use of CSA funds to pay for any membership dues or organizational fees without specific prior CSA approval. In addition the regulation provides review criteria for use by CSA Administering Offices in determining relevancy or acceptability of organizations to receive grant funds for membership-related expenses.

For those organizations which receive strong membership support through CSA-related grant funds, such as the National Association for Community Development (NACD) and the National Community Action Agency Executive Directors Association (NCAAEDA), CSA will make specific determinations of acceptability based not only on the relevancy of their activities to the objectives of the EOA, but also on such factors as their records for sound