GAO urges EDA to revive interagency collaboration on economic development grants

The Government Accountability Office issued a report recommending that the Secretary of Commerce require the Economic Development Administration (EDA) to resume and improve interagency collaboration efforts to manage overlap risks among federal economic development programs. The recommendation, identified as Recommendation 1, calls for the incorporation of leading practices for interagency coordination.

GAO identified 140 economic development programs administered by 13 federal agencies. Of the 131 programs that reported obligations for fiscal year 2024, total funding amounted to about $60 billion. The analysis compared four EDA programs that received the most funding in fiscal years 2023 and 2024 with 29 selected programs from other agencies. All 29 programs overlapped with at least one EDA program in activities, beneficiaries, or purpose, and 20 overlapped in all three aspects.

Collaboration between EDA and other agencies remains limited. Only five of the 29 programs reported any collaboration with EDA during fiscal year 2024, the last full year covered by the survey. While EDA asks grant applicants to disclose funding from other federal sources, the agency does not verify those disclosures before awarding funds.

The Public Works and Economic Development Act of 1965, as amended, mandates EDA coordination with other federal entities conducting economic development activities. EDA officials contend that current practices satisfy the statutory requirement, yet the agency has no active plans to restart broader collaboration. GAO notes that enhanced coordination could reduce duplicative funding and better leverage shared expertise.

EDA has indicated agreement with GAO's recommendation. GAO will track agency actions and provide updates when the Department of Commerce confirms steps taken to implement the recommendation.