Introduction
The role that faith-based and other local, neighborhood-serving groups should play in meeting social needs through Federal Government programs has been debated for decades. These debates have often produced more heat than light because of insufficient evidence on matters ranging from the extent of Federal social service spending and the breadth of existing Federal collaboration with faith- and community-based charities to the existence of specific legal restrictions on these organizations' participation and legal questions about the constitutionality of government funding of faith-based service groups.

This report provides an overview of problems uncovered by the first ever audit of Federal programs undertaken by the newly-created Centers for Faith-Based & Community Initiatives at HHS, HUD, Education, Labor, and Justice. Because of the Centers' recent vintage and limited staff, the shortened turnaround time for the report, and the extensive range of affected agency programs, the audit could not cover every potentially affected program in depth. Thus, the Centers emphasized programs that receive major funding, programs that are covered by existing Charitable Choice laws, programs characteristic of the respective departments, and programs in which participation by faith-based and other community-serving groups would be natural or especially fruitful.

Among the findings of the five Centers' reports are the following:

• A funding gap exists between the government and the grassroots. Smaller groups, faith-based and secular, receive very little Federal support relative to the size and scope of the social services they provide.

• There exists a widespread bias against faith- and community-based organizations in Federal social service programs:

• Restricting some kinds of religious organizations from applying for funding.

• Restricting religious activities that are not prohibited by the Constitution.

• Not honoring rights that religious organizations have in Federal law.

• Burdening small organizations with cumbersome regulations and requirements.

• Imposing anti-competitive mandates on some programs, such as requiring applicants to demonstrate support from government agencies or others that might also be competing for the same funds.

• Legislation requires some restrictions on the full participation of faith-based organizations, but many of the regulations are needlessly burdensome administrative creations.

• Congress' remedy to barriers to faith-based organizations - the Federal law known as "Charitable Choice" - has been almost entirely ignored by Federal administrators, who have done little to help or require State and local governments to comply with the new rules for involving faith-based providers.

• Despite these obstacles, some faith-based and community-based service groups receive financial support from the Federal Government, either by winning Federal discretionary grants or gaining a share of Federal formula grants used by State and local governments to deliver social services.

• Few Federal funding programs have undergone a thorough evaluation with an eye to ensuring that expenditures yield the planned-for positive results in the lives of people who need help.

• The Government Performance and Results Act (GPRA), enacted in 1993 to promote performance-based management of Federal programs, has had little discernible impact thus far on either procurement decisions or program outcomes.

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