Drug Safety: COVID-19 Complicates Already Challenged FDA Foreign Inspection Program

The outbreak of COVID-19 has called greater attention to the United States' reliance on foreign drug manufacturers and further highlighted the importance of ensuring a safe pharmaceutical supply chain. Much of the manufacturing of drugs for treating COVID-19 occurs overseas, which is also true of the majority of other drugs marketed in the United States. While the volume of drugs manufactured overseas for the U.S. market is not fully known, FDA reports that about 70 percent of establishments manufacturing active ingredients and more than 50 percent of establishments manufacturing finished drugs for the U.S. market were located overseas, as of August 2019.

FDA is responsible for overseeing the safety and effectiveness of all drugs marketed in the United States, regardless of where they are produced, and conducts inspections of both foreign and domestic drug manufacturing establishments.

GAO has had long-standing concerns about FDA's ability to oversee the increasingly global pharmaceutical supply chain, an issue highlighted in GAO's High Risk Series since 2009. In particular:

GAO recommended in 2008 ( GAO-08-970 ) that FDA increase the number of inspections of foreign drug establishments.

GAO found in 2010 ( GAO-10-961 ) that FDA continued to conduct relatively few foreign inspections than domestic inspections.

GAO found in 2016 ( GAO-17-143 ) that FDA was conducting more of these foreign drug inspections, and GAO closed its 2008 recommendation to conduct more foreign inspections. However, GAO also reported that FDA may have never inspected many foreign establishments manufacturing drugs for the U.S. market.

In addition, in the summer of 2018, FDA began announcing recalls of blood pressure medications manufactured overseas that were tainted with a potential carcinogen, raising further questions about FDA’s oversight of foreign-manufactured drugs.

This statement is largely based on GAO’s December 2019 testimony ( GAO-20-262T ) and discusses

1. the number of foreign inspections FDA has conducted,

3. challenges unique to foreign inspections.

For that testimony, GAO examined FDA data from fiscal years 2012 through 2018 and interviewed investigators from FDA’s 2019 cadre of investigators (who are based in the United States but exclusively conduct foreign drug inspections) and from FDA’s foreign offices in China and India.

In December 2019, GAO found that a growing number of foreign drug manufacturing inspections conducted by the Food and Drug Administration (FDA) were in China and India (43 percent in 2018), where most establishments that manufacture drugs for the United States were located. In fiscal year 2015, FDA, for the first time, conducted more foreign inspections than domestic inspections. However, from fiscal year 2016 through 2018, both foreign and domestic inspections decreased—by about 10 percent and 13 percent, respectively. FDA officials attributed the decline, in part, to vacancies among investigators available to conduct inspections. In March 2020, FDA announced that, due to Coronavirus Disease 2019 (COVID-19), it was postponing almost all inspections of foreign manufacturing establishments. While FDA has indicated it has other tools to ensure the safety of the U.S. drug supply, the lack of foreign inspections removes a critical source of information about the quality of drugs manufactured for the U.S. market.

GAO also found that FDA had vacancies among each of the groups of investigators who conduct foreign inspections. FDA had 190 investigators in the United States who conduct the majority of foreign inspections, but an additional 58 positions were vacant. At the time of GAO's December 2019 testimony, FDA was in the process filling 26 of these vacancies, with 32 remaining. However, according to FDA officials, it could be 2 to 3 years before new staff are experienced enough to conduct foreign inspections. FDA also faced persistent vacancies among investigators in its foreign offices.

GAO further found in December 2019 that FDA investigators identified persistent challenges conducting foreign inspections, raising questions about the equivalence of foreign to domestic inspections. Specifically, GAO found:

While FDA inspections performed in the United States were almost always unannounced, FDA's practice of preannouncing foreign inspections up to 12 weeks in advance may have given manufacturers the opportunity to fix problems ahead of the inspection. Investigators from FDA's China and India offices had conducted some unannounced inspections, but these staff do not perform most of the inspections in these countries (27 percent and 10 percent, respectively).

FDA was not generally providing translators on foreign inspections. Rather, FDA continued to rely on translators provided by the foreign establishments being inspected, which investigators said raised questions about the accuracy of information FDA investigators collected. For example, one investigator said there was more risk of conflict of interest if the establishment used its own employees to translate. In addition, the establishment representative providing the translation may be someone who does not have the technical language needed, which can make it harder to communicate with establishment staff and facilitate the inspection.

The overseas travel schedule can present challenges for FDA's domestically based investigators, who conduct the majority of foreign inspections. Domestically based investigators told us there is little flexibility for them to extend foreign inspections during an overseas trip. The inspections they conduct on an overseas trip are scheduled back-to-back in 3-week trips and may involve three different countries. Therefore, extending one inspection would limit the amount of time the investigator has to complete their other scheduled inspections. FDA officials said that inspections conducted by investigators based in China or India (and domestic inspections in the United States) are generally scheduled one at a time and can thus more easily be extended if the investigator needs additional time to pursue potential deficiencies. However, these in-country investigators are not involved in the majority of FDA inspections conducted in China or India.

I am pleased to be here today to discuss our work on the Food and Drug  Administration’s (FDA) oversight of drugs manufactured overseas. The  outbreak of Coronavirus Disease 2019 (COVID-19) has called greater  attention to the United States’ reliance on foreign drug manufacturers and  further highlighted the importance of ensuring a secure pharmaceutical  supply chain. Like the majority of other drugs manufactured for the U.S.  market, much of the manufacturing of drugs for treating COVID-19 occurs  overseas.

We have had long-standing concerns about FDA’s ability to oversee the  increasingly global pharmaceutical supply chain, an issue highlighted in  our High Risk Series since 2009. A critical element in FDA’s oversight of  overseas manufacturing is the inspections it conducts of foreign  manufacturing establishments. For more than two decades, we have  raised concerns about FDA’s foreign drug inspection program. In 1998,  and again in 2008, we found that FDA inspected relatively few foreign  drug manufacturing establishments—an estimated 8 percent of those  subject to inspection for our 2008 report—and that challenges unique to  foreign inspections influenced the manner in which FDA conducted such  inspections. In our 2008 report we recommended that FDA increase the  number of foreign inspections it conducts. In 2010, and again in 2016,  we found that FDA was conducting more inspections of foreign  establishments (inspecting about 11 percent and 21 percent of those  subject to inspection for our 2010 and 2016 reports, respectively).  However, in 2010 we reported that FDA continued to conduct relatively  fewer foreign drug inspections than domestic inspections, and in 2016 we  also reported that many foreign establishments manufacturing drugs for  the U.S. market may never have been inspected by FDA. In addition, in  the summer of 2018, FDA began announcing recalls of blood pressure  medications manufactured overseas that were tainted with a potential  carcinogen, raising further questions about FDA’s oversight of foreign- manufactured drugs.

My remarks today primarily discuss the findings from our December 2019  testimony on FDA’s foreign drug inspection program. Accordingly, this  statement provides observations on:  1.  the number of FDA’s foreign inspections,  2.  inspection staffing levels, and  3.  challenges unique to foreign inspections.

For our December 2019 testimony, we analyzed FDA data from fiscal  year 2012 through fiscal year 2018 on inspections of foreign drug  manufacturing establishments. We also interviewed FDA drug  investigators from FDA’s 2019 cadre of investigators, who are based in  the United States but exclusively conduct foreign drug inspections, and  investigators based in FDA’s foreign offices in China and in India. More  detailed information on our objectives, scope, and methodology for that  work can be found in the December 2019 testimony. The work on which  this statement is based was conducted in accordance with generally  accepted government auditing standards. Those standards require that  we plan and perform the audit to obtain sufficient, appropriate evidence to  provide a reasonable basis for our findings and conclusions based on our  audit objectives. We believe that the evidence obtained provides a  reasonable basis for our findings and conclusions based on our audit  objectives.

Background Globalization of Drug Manufacturing

Drugs sold in the United States—including active pharmaceutical  ingredients (APIs) and finished dosage forms—are manufactured  throughout the world. According to FDA, as of August 2019 about 70  percent of establishments manufacturing APIs and more than 50 percent  of establishments manufacturing finished drugs for the U.S. market were  located overseas. As of March 2019, FDA data showed that India and  China had the most manufacturing establishments shipping drugs to the  United States, with about 40 percent of all foreign establishments in these  two countries. (See fig. 1.)

FDA is responsible for overseeing the safety and effectiveness of all  drugs marketed in the United States, regardless of where they are  manufactured. Drugs manufactured overseas must meet the same  statutory and regulatory requirements as those manufactured in the  United States. FDA’s Center for Drug Evaluation and Research (CDER)  establishes standards for the safety, quality, and effectiveness of, and  manufacturing processes for, over-the-counter and prescription drugs.  CDER requests that FDA’s Office of Regulatory Affairs (ORA) inspect  both domestic and foreign establishments to ensure that drugs are  produced in conformance with applicable laws of the United States,  including current good manufacturing practice (CGMP) regulations.

FDA investigators generally conduct three main types of drug  manufacturing establishment inspections: preapproval inspections,  surveillance inspections, and for-cause inspections, as described in table  1. At times, FDA may conduct an inspection that combines both  preapproval and surveillance inspection components in a single visit to an  establishment.

FDA uses multiple databases to select foreign and domestic  establishments for surveillance inspections, including its registration  database and inspection database. Because the establishments are continuously changing as they begin, stop, or resume marketing products  in the United States, CDER creates a monthly catalog of establishments.  The establishments in the catalog are prioritized for inspection twice each  year.

In our 2008 report we found that, because of inaccurate information in  FDA’s databases, the agency did not know how many foreign drug  establishments were subject to inspection. For example, some  establishments included in FDA’s registration database may have gone  out of business and did not inform FDA that they had done so, or they did  not actually manufacture drugs for the U.S. market. In our report, we  noted that some foreign establishments may register because, in foreign  markets, registration may erroneously convey an “approval” or  endorsement by FDA, when in fact the establishment may never have  been inspected by FDA. We recommended that FDA take steps to  improve the accuracy of this registration information. In our 2010 and  2016 reports we found that FDA had taken steps to improve the accuracy  and completeness of information in its catalog of drug establishments  subject to inspection, such as using contractors to conduct site visits to  verify the existence of registered foreign establishments and confirm that  they manufacture the products that are recorded in U.S. import records.

To prioritize establishments for surveillance inspections, CDER applies a  risk-based site selection model to its catalog of establishments to identify  those establishments (both domestic and foreign) that, based on the  characteristics of the drugs being manufactured, pose the greatest  potential public health risk should they experience a manufacturing  defect. This model analyzes several factors, including inherent product  risk, establishment type, inspection history, and time since last inspection,  to develop a list of establishments that FDA considers to be a priority for  inspection. Through this process, CDER develops a ranked list of  foreign and domestic establishments selected for inspection that is  submitted to ORA. To be efficient with its resources, ORA staff may shift  the order of establishments to be inspected on CDER’s prioritized list  based on geographic proximity to other planned inspection trips,  according to FDA officials.

Investigators from ORA and, as needed, ORA laboratory analysts with  certain expertise are responsible for inspecting drug manufacturing  establishments. FDA primarily relies on three groups of investigators to  conduct foreign inspections:

ORA investigators based in the United States, who primarily conduct  domestic drug establishment inspections but may sometimes conduct  foreign inspections.

Members of ORA’s dedicated foreign drug cadre, a group of  domestically based investigators, who exclusively conduct foreign  inspections.

Investigators assigned to and living in the countries where FDA has  foreign offices, who include both staff based in the foreign offices full  time and those on temporary duty assignment to the foreign offices.  FDA began opening offices around the world in 2008 to obtain better  information on the increasing number of products coming into the  United States from overseas, to build relationships with foreign  stakeholders, and to perform inspections. FDA full-time foreign  office staff are posted overseas for 2-year assignments. FDA staff can  also be assigned to the foreign offices on temporary duty assignments  for up to 120 days. In fiscal year 2019, there were full-time and  temporary duty drug investigators assigned to FDA foreign offices in  China and India.

FDA’s process for determining whether a foreign establishment complies  with CGMPs involves both CDER and ORA. During an inspection, ORA  investigators are responsible for identifying any significant objectionable  conditions and practices and reporting these to the establishment’s  management. Investigators suggest that the establishment respond to  FDA in writing concerning all actions taken to address the issues  identified during the inspection.

Once ORA investigators complete an inspection, they are responsible for  preparing an establishment inspection report to document their inspection  findings. Inspection reports describe the manufacturing operations  observed during the inspection and any conditions that may violate U.S.  statutes and regulations. Based on their inspection findings, ORA  investigators make an initial recommendation regarding whether  regulatory actions are needed to address identified deficiencies using one  of three classifications: no action indicated (NAI); voluntary action  indicated (VAI); or official action indicated (OAI). Inspection reports and  initial classification recommendations for regulatory action are to be  reviewed within ORA. For inspections classified as OAI—where ORA  identified serious deficiencies—such inspection reports and classification  recommendations are to be reviewed within CDER. CDER is to review  the ORA recommendations and determine whether regulatory action is  necessary. CDER also is to review inspection reports and initial  classification recommendations for all for-cause inspections, regardless of  whether regulatory action is recommended by ORA.

According to FDA policy, inspections classified as OAI may result in  regulatory action, such as the issuance of a warning letter. FDA issues  warning letters to those establishments manufacturing drugs for the U.S.  market that are in violation of applicable U.S. laws and regulations and  may be subject to enforcement action if the violations are not promptly  and adequately corrected. In addition, warning letters may notify foreign  establishments that FDA may refuse entry of their drugs at the border or  recommend disapproval of any new drug applications listing the  establishment until sufficient corrections are made. FDA may take other  regulatory actions if it identifies serious deficiencies during the inspection  of a foreign establishment. For example, FDA may issue an import alert, which instructs FDA staff that they may detain drugs manufactured by the  violative establishment that have been offered for entry into the United  States. In addition, FDA may conduct regulatory meetings with the  violative establishment. Regulatory meetings may be held in a variety of  situations, such as a follow-up to the issuance of a warning letter to  emphasize the significance of the deficiencies or to communicate  documented deficiencies that do not warrant the issuance of a warning  letter.

The Number of Foreign Inspections Declined in Recent Years, and the Majority of Such Inspections Identified Deficiencies Total Number of FDA Foreign Drug Inspections Has Decreased Since Fiscal Year 2016 after Several Years of Increases

In December 2019, we found that from fiscal year 2012 through fiscal  year 2016, the number of FDA foreign drug manufacturing establishment  inspections increased but then began to decline after fiscal year 2016. In  fiscal year 2015, the total number of foreign inspections surpassed the  number of domestic inspections for the first time. However, from fiscal  year 2016 through 2018, both foreign and domestic inspections  decreased—by about 10 percent and 13 percent, respectively. FDA  officials attributed this decrease to vacancies in the number of  investigators available to conduct inspections (which we discuss later in  this testimony statement) and to inaccurate data used to select  establishments for inspection in fiscal years 2017 and 2018.

Despite steps taken to improve the accuracy and completeness of FDA  data on foreign establishments, in December 2019, we found that the  data challenges we identified in our 2008 report continue to make it  difficult for FDA to accurately identify establishments subject to  inspection. Specifically, since 2017, FDA had pursued an initiative to  inspect approximately 1,000 foreign establishments that lacked an  inspection history. As of November 2019, officials said all of these  establishments had either been inspected or were determined not to be  subject to inspection because it was determined they did not actually  manufacture drugs for the U.S. market, or had not recently shipped drugs  to the United States. However, officials told us that this effort contributed  to the decline in the number of foreign inspections conducted because of  how data inaccuracies affected the process for selecting establishments  for inspection. Specifically, after selecting uninspected foreign  establishments for inspection, FDA determined that a sizeable  percentage of these establishments were not actually subject to  inspection (e.g., about 40 percent of those assigned to the China Office in  fiscal years 2017 and 2018). These foreign establishments were thus  removed from the list for inspection for the given year. FDA officials told  us that the next highest priority establishments identified through the risk- based model to replace those establishments were domestic  establishments. As a result, the number of foreign establishments actually  inspected decreased. As part of our ongoing work, we plan to examine  the accuracy and completeness of information FDA maintains about  foreign establishments and the application of its risk-based site selection  process.

We further found that FDA continued to conduct the largest number of  foreign inspections in India and China, with inspections in these two  countries representing about 40 percent of all foreign drug inspections  from fiscal year 2016 through 2018. (See table 2.) In addition to India and  China, the rest of the countries in which FDA most frequently conducted  inspections has generally been the same since our 2008 report.

Since we last reported on this issue, FDA announced in March 2020 that,  due to COVID-19, it was postponing most inspections of foreign  manufacturing establishments. Only inspections deemed mission-critical  would still be considered on a case-by-case basis. According to the  announcement, while the pandemic has added new complexities, FDA  has other tools to ensure the safety of the U.S. drug supply. For example,  FDA announced that it was evaluating additional ways to conduct its  inspectional work that would not jeopardize public safety and would  protect both the establishments and the FDA staff. Such ways, according  to FDA, could include reviewing the compliance histories of  establishments, using information shared by foreign regulatory partners,  and evaluating establishment records in lieu of an onsite inspection. In  addition, the FDA Commissioner’s May 11, 2020 press statement stated  that while FDA’s regulatory oversight is vital to the long-term health of  America, product safety and quality are ultimately the establishment’s  responsibility. Most firms, according to FDA, strive to reliably provide  quality products and maintain the integrity of the supply chain. However,  the lack of foreign inspections removes a critical source of information  about the quality of drugs manufactured for the U.S. market.

It is not clear when FDA will resume regular inspections. The agency  originally announced the postponement would last through April 2020.  However, on May 11, 2020, it stated that the postponement would  continue. According to FDA, the agency continues to closely monitor the  global situation. FDA stated that it remains in contact with its foreign  regulatory counterparts and would work with the Centers for Disease  Control and Prevention to develop a process that would govern how and  where to return to on-site facility inspections as conditions improve.

Most Foreign Inspections Were for Surveillance

In December 2019, we found that each year from fiscal year 2012 through  2018 at least 50 percent of FDA’s foreign inspections were surveillance  inspections. In contrast to preapproval inspections, surveillance  inspections are used to ensure drugs already on the market are  manufactured in compliance with FDA regulations. In recent years, the  proportion of foreign surveillance inspections has increased. As figure 2  shows, in fiscal year 2012, 56 percent of foreign inspections were  surveillance-only inspections; in contrast, from fiscal year 2016 through  2018, about 70 percent of foreign inspections were surveillance-only,  which was comparable to the percentage for domestic inspections during  that period. This is a significant increase from the 13 percent of foreign  inspections that were surveillance-only when we made our 2008  recommendation that FDA inspect foreign establishments at a  comparable frequency to their domestic counterparts (85 percent of which  were surveillance-only at that time).

In our December 2019 testimony, we also reported that FDA implemented  changes to its foreign drug inspection program since our 2008 report that  may have contributed to the increase in surveillance inspections. Prior to  2012, FDA was required to inspect domestic establishments that  manufacture drugs marketed in the United States every 2 years, but there  was no similar requirement for foreign establishments. As a result, and as  we reported in 2008, foreign inspections were often preapproval  inspections driven by pending applications for new drugs. FDA thus  conducted relatively few surveillance-only inspections to monitor the  ongoing compliance of establishments manufacturing drugs that were  already on the market, with just 13 percent of foreign inspections  conducted for surveillance purposes at the time of our 2008 report.  However, in 2012, the Food and Drug Administration Safety and  Innovation Act eliminated the 2-year requirement for domestic  inspections, directing FDA to inspect both domestic and foreign  establishments on a risk-based schedule determined by an  establishment’s known safety risks, which was consistent with our 2008  recommendation.

FDA Identified Deficiencies during the Majority of Foreign Inspections

In December 2019, we found that from fiscal year 2012 through 2018,  FDA identified deficiencies in approximately 64 percent of foreign drug  manufacturing establishment inspections (3,742 of 5,844 inspections).  This includes deficiencies necessitating a classification of VAI, or the  more serious OAI, as described in the text box.

Based on their inspection findings, FDA investigators make an initial recommendation  regarding the classification of each inspection:

No action indicated (NAI) means that insignificant or no deficiencies were  identified during the inspection.

Voluntary action indicated (VAI) means that deficiencies were identified during  the inspection, but the agency is not prepared to take regulatory action, so any  corrective actions are left to the establishment to take voluntarily.

Official action indicated (OAI) means that serious deficiencies were found that  warrant regulatory action.

About 59 percent of domestic inspections (3,702 out of 6,291) identified  deficiencies during this time period. (See fig. 3.) This proportion is similar  to what we found when we last looked at this issue in 2008, when FDA  identified deficiencies in about 62 percent of foreign inspections and 51  percent of domestic inspections from fiscal years 2002 through 2006.

Our December 2019 analysis showed that serious deficiencies identified  during foreign drug inspections classified as OAI—which represented 8  percent of inspections from fiscal year 2012 through 2018—include  CGMP violations such as those related to production and process  controls, equipment, records and reports, and buildings and facilities.  For example:

Failure to maintain the sanitation of the buildings used in the  manufacturing processing, packing, or holding of a drug product  (21 C.F.R. § 211.56(a) (2019)). At an establishment in India producing  finished drug products, the investigator reported observing a live moth  floating in raw material used in the drug production, and that the  facility staff continued to manufacture the drug products using the raw  material contaminated by the moth, despite the investigator pointing  out its presence.

Failure to perform operations relating to the manufacture,  processing, and packing of penicillin in facilities separate from  those used for other drug products (21 C.F.R. § 211.42 (d)  (2019)). At an establishment in Turkey that manufactured penicillin  and other drugs, the investigator reported that the manufacturer had  detected penicillin outside the penicillin manufacturing area of the  establishment multiple times. According to FDA, penicillin  contamination of other drugs presents great risk to patient safety,  including potential anaphylaxis (even at extremely low levels of  exposure) and death.

Some investigators who conduct foreign inspections expressed concern  with instances in which ORA or CDER reviewers reclassified the  investigator’s initial inspection classification recommendations of OAI to  the less serious classification of VAI.

FDA Continued to Face Challenges Filling Vacancies among Staff Conducting Foreign Inspections

In December 2019, we found that FDA’s foreign inspection workforce had  staff vacancies, which FDA officials said contributed to the recent decline  in inspections. As previously mentioned, FDA used multiple types of staff  resources to conduct foreign drug inspections—including ORA  investigators based in the United States, members of ORA’s dedicated  foreign drug cadre based in the United States, and investigators assigned  to FDA’s foreign offices. However, we found that each of these groups  had current vacancies. At the time of our December testimony, FDA  officials told us that the agency was trying to fill vacancies in each of  these groups, but the lower staff numbers may limit FDA’s ability to  conduct more foreign inspections.

ORA investigators based in the United States. This group of  investigators conducted the majority of foreign inspections; about 76  percent of foreign inspections in fiscal year 2018 involved an ORA  investigator based in the United States who conducts both foreign and  domestic inspections. FDA officials said that the more experienced  investigators from this group are expected to conduct three to six foreign  inspections per year, and investigators hired using generic drug user fees  are expected to inspect nine to 12 foreign establishments per year. As  of June 2019, there were 190 investigators eligible to conduct foreign  drug inspections, but officials said that as of November 2019, the agency  had an additional 58 vacancies in this group. At the time of our December  2019 testimony, officials said that the agency was in the process of hiring  26 ORA investigators based in the United States to fill these vacancies,  with 32 vacancies remaining.

FDA officials attributed the vacancies to multiple factors: investigator  retirements, investigator movement to other parts of FDA, and the need to  hire to additional investigator positions using generic drug user fees.  Officials also said that a reorganization within ORA led to a reduced  number of investigators who conduct drug manufacturing establishment  inspections. While FDA had recently filled several of the vacancies,  officials told us that new investigators are not typically used for foreign  inspections until they have been with the agency for 2 to 3 years.

ORA dedicated foreign drug cadre. About 15 percent of foreign  inspections in fiscal year 2018 involved an investigator from ORA’s  dedicated foreign drug cadre—a group of ORA investigators based in the  United States who exclusively conduct foreign inspections. FDA officials  said that members of the cadre are expected to conduct 16 to 18 foreign  inspections each year. According to FDA, the cadre had 20 investigators in 2012 and 15 investigators in 2016. However, the cadre had only 12  investigators as of November 2019, out of 20 available slots. At the time  of our December 2019 testimony, FDA officials told us that the agency  was attempting to fill these positions from the current ORA investigator  pool, but officials were not confident that all 20 slots would be filled.

Investigators assigned to FDA’s foreign offices. Approximately 7  percent of foreign inspections in fiscal year 2018 involved investigators  from FDA’s foreign offices. The investigators conducting these  inspections were those based in the China and India foreign offices—the  countries where most drug inspections occur—and also included those  investigators on temporary duty assignment to these offices. According  to FDA officials, these investigators are expected to conduct 15 foreign  inspections each year. We have noted high vacancy rates for these  foreign offices in past reports. While these vacancy rates have  decreased over time, vacancies persist. As of November 2019, FDA’s  China office had three of 10 drug investigator positions vacant (a 30  percent vacancy rate), while FDA’s India office had two of six drug  investigator positions vacant (a 33 percent vacancy rate).

In our December 2019 testimony, we reported that FDA had taken steps  to address vacancies in the foreign offices but continued to face  challenges. In our 2010 report, we recommended that FDA develop a  strategic workforce plan to help recruit and retain foreign office staff.  FDA agreed with our recommendation and released such a plan in March  2016, but the long-standing vacancies in the foreign offices raise  questions about its implementation. FDA officials told us that one  challenge in recruiting investigators for the foreign offices is that well- qualified investigators for those positions need foreign inspection  experience. For example, an official in FDA’s India office told us that  foreign inspections can be challenging, and the India office does not have  the resources to develop or train new investigators. Therefore, it is  important to recruit investigators who have experience conducting foreign  inspections, and such investigators are recruited from ORA. Thus,  vacancies in the other two groups of investigators can influence the  number of staff available to apply for positions in the foreign offices.

Further, according to FDA officials, after employees have accepted an in- country position, the agency can experience significant delays before they  are staffed in the office due to delays in processing assignments. For  example, an official in FDA’s India office said that investigators need to  complete a week-long security training program and must obtain the  security clearance needed to work at the U.S. Embassy, which is where  FDA’s foreign office is located. However, the official told us that there are  limited availabilities for that training, and background checks for security  clearances can take time. According to this official, FDA investigators  did not usually receive first priority for the training. FDA estimated that it  can take as little as 1 month to over 2 years for an investigator to clear  background and medical checks and arrive at a foreign office. For  example, an investigator in FDA’s China office told us that as a result of  these requirements and other issues, it took nearly 2 years for the  investigator to arrive at the office after FDA had accepted the  investigator’s application. According to FDA’s own strategic workforce  plan for the foreign offices, these types of delays have resulted in staff  changing their decision after accepting a position in the foreign offices.

Persistent Challenges Unique to Foreign Inspections Raised Questions about Their Equivalence to Domestic Inspections

In December 2019, we found that FDA continues to face unique  challenges when inspecting foreign drug establishments that raise  questions about whether these inspections are equivalent to domestic  inspections. Specifically, based on our interviews with drug investigators  in the dedicated foreign drug cadre and in FDA’s foreign offices in China  and India, we identified four challenge areas related to conducting foreign  inspections, which are described below. Of the four challenge areas  identified, three areas—preannouncing inspections, language barriers,  and lack of flexibility—were also raised in our 2008 report.

Preannouncing Inspections. As we reported in 2008, the amount of  notice FDA generally gives to foreign drug establishments in advance of  an inspection is different than for domestic establishments. Drug  establishment inspections performed in the United States are almost  always unannounced, whereas foreign establishments generally receive advance notice of an FDA inspection. According to FDA officials, FDA is  not required to preannounce foreign inspections. However, they said the  agency generally does so to avoid wasting agency resources, obtain the  establishment’s assistance to make travel arrangements, and ensure the  safety of investigators when traveling in country.

In our December 2019 testimony, we found that FDA does conduct some  unannounced foreign inspections, particularly if the investigators  conducting the inspection are based in FDA’s foreign offices. However,  FDA officials told us that FDA does not have data on the frequency with  which foreign drug inspections are unannounced, nor the extent to which  the amount of notice provided to foreign establishments varies. According  to FDA officials, this is because FDA does not have a data field in its  database to systematically track this information. However, the officials  estimated that the agency generally gives 12 weeks of notice to  establishments that investigators are coming when investigators are  traveling from the United States. While investigators in FDA’s China and  India offices do conduct unannounced or short-notice inspections, these  staff do not perform most of the inspections in these countries. (See table  3.)

Our work indicated that preannouncing foreign inspections can create  challenges and raises questions about the equivalence to domestic  inspections. Of the 18 investigators we interviewed, 14 said that there are  downsides to preannouncing foreign inspections, particularly that  providing advance notice gives foreign establishments the opportunity to  fix problems before the investigator arrives. For example, when an  inspection is preannounced, it gives establishments time to clean up their  facility and update or generate new operating procedures ahead of the  inspection. However, establishments are expected to be in a constant  state of compliance and always ready for an FDA inspection, and several  investigators told us seeing the true day-to-day operating environment for  an establishment is more likely during an unannounced inspection.

Of the 18 investigators we interviewed for our December 2019 testimony,  12 said that unannounced inspections are generally preferable to  preannounced inspections. One investigator told us that, although they  believed the best way to ensure industry compliance to CGMPs was for  establishments to not know when FDA is coming for an inspection, there  was no data that would allow the agency to evaluate whether  unannounced inspections were better than preannounced inspections. In  addition, some investigators told us that it was still possible to identify  serious deficiencies during preannounced inspections. For example,  investigators could still identify issues by looking at the firm’s electronic  records, including time-stamped data relating to the creation,  modification, or deletion of a record. Three investigators also told us that  in some cases there could be benefits to announcing inspections in  advance. For example, for preapproval inspections, announcing the  inspection in advance gives the establishment time to organize the  documentation and staff needed to conduct the inspection.

Language Barriers. Work for our December 2019 testimony indicated  that language barriers—which we first reported as a challenge to  conducting foreign inspections in our 2008 report—can add time to  inspections and raise questions about the accuracy of information FDA  investigators collect and thus about the equivalence to domestic  inspections. FDA generally does not send translators on inspections in  foreign countries. Rather, investigators rely on the drug establishment to  provide translation services, which can be an English-speaking employee  of the establishment being inspected, an external translator hired by the  establishment, or an English-speaking consultant hired by the  establishment.

Of the 18 investigators that we interviewed, 14 said that language barriers  can be a challenge to conducting foreign inspections and were especially  challenging in parts of Asia, including China and Japan. Seven  investigators told us this issue was less of a challenge for inspections  conducted in other foreign countries, including India and countries in  Europe, because workers at establishments in these countries were more  likely to speak English, and documentation was also more likely to be in  English. Investigators told us that compared to domestic inspections, it  can be more challenging and take longer to complete typical inspection- related activities, such as reviewing documentation or interviewing  employees, if the investigator needed to rely on translation.

Fourteen of the 18 investigators we interviewed said that there can be  concerns related to relying on establishment staff and independent  translators. Specifically, 11 investigators told us there can be  uncertainties regarding the accuracy of the information being translated,  particularly when investigators rely on the translation provided by an  employee of the establishment being inspected. For instance, one  investigator said that there was more risk of conflict of interest if the  establishment used its own employees to translate. Another investigator  said that they went to a drug establishment in China that told FDA it had  English-speaking employees to translate the inspection, but that was not  the case, and the investigator had to use an application on their phone to  translate the interviews. In addition, the firm representative providing the  translation may be someone who does not have the technical language  needed, which can make it harder to communicate with firm staff and  facilitate the inspection. One investigator told us that the independent  translators hired by firms were sometimes consultants and, in those  instances, it can seem like the consultants are coaching the firm during  the inspection.

FDA officials told us that when they conduct unannounced for-cause  inspections in China, investigators bring locally employed staff who work  in FDA’s China office to act as translators. The investigators we  interviewed said that in such instances, they valued knowing that the  translation they were getting was accurate. However, FDA does not have  the resources to provide locally employed staff on every inspection,  according to an FDA official.

Lack of Flexibility. Work for our December 2019 testimony indicated  that, as we first reported in 2008, the overseas travel schedule can  present unique challenges for FDA’s domestically based investigators— including both ORA investigators and members of the dedicated foreign  dug cadre—who conduct the majority of foreign inspections. Eight of the  12 dedicated foreign drug cadre investigators that we interviewed for our  December 2019 testimony told us that there is little flexibility to extend  foreign inspections conducted by domestically based investigators,  because the inspections they conduct on an overseas trip are scheduled  back-to-back in 3-week trips that may involve three different countries.  This raises questions about their equivalence to domestic inspections.  For instance, extending one inspection would limit the amount of time the  investigator has to complete their other scheduled inspections, some  investigators told us.

In addition, eight investigators told us that domestically based staff are  generally unable to extend the total amount of time spent on an overseas  trip—one investigator told us that an investigator would have to find  something really bad to justify an extension. In contrast, FDA officials told  us that inspections conducted by in-country investigators in China or  India, and domestic inspections in the United States, are generally  scheduled one at a time and can thus more easily be extended if the  investigator needs additional time to pursue potential deficiencies.  However, in-country investigators are not involved in the majority of  inspections conducted in China or India.

Three investigators from the dedicated foreign drug cadre told us that  when they travel overseas, they adjust their inspection approach to help  ensure they finish foreign inspections on time. For example, one  investigator told us that an investigator may start the inspection in an area  of the establishment that was noted as having issues during the last  inspection. However, one investigator said that sometimes it is not  possible to cover everything in depth during a foreign inspection. Another  investigator told us that they focus on identifying the most serious issues  during a foreign inspection, and that less serious issues can be identified  in the establishment inspection report for reference in the next inspection.  Five investigators also noted that they work long hours during their  inspection to ensure they can complete the needed work. While FDA  may assign more than one investigator to an inspection to complete  needed work, one investigator said that FDA does not usually assign  more than one person to an inspection because investigators are  expected to have the experience to conduct inspections by themselves.

FDA data show that from fiscal years 2012 through 2018, the majority of  both foreign and domestic inspections were conducted by one person— 77 percent and 66 percent, respectively.

Post-Inspection Classification Process. According to FDA officials,  starting in fiscal year 2018, FDA implemented a new post-inspection  classification process: when an ORA investigator recommends an OAI  classification following an inspection, ORA compliance is required to send  that inspection report to CDER for review within 45 calendar days from  the inspection closeout. Among other things, the process was intended to  help ensure FDA can communicate inspection results to domestic and  foreign establishments within 90 days of the inspection closeout, as  committed to under the Generic Drug User Fee Amendments of  2017(GDUFA II). FDA officials told us that the changes also required an  additional ORA review for foreign inspection reports to align that process  with the process for domestic inspection reports. Although the 45-day  reporting time frame for potential OAI classifications is a requirement for  both domestic and foreign inspections, adding the additional level of  review within ORA effectively shortened the amount of time investigators  have to document findings for foreign inspections.

Our work indicated that the post-inspection reporting time frames can  create challenges for domestic investigators who conduct foreign  inspections and raise questions about the equivalence to domestic  inspections. Eight of the 18 investigators we interviewed for our  December 2019 testimony said shortening the time for completing reports  and adding a level of review has made it more challenging to meet  reporting requirements, especially if serious deficiencies are identified  during the inspection. Investigators told us that for a potential OAI  inspection, they now need to send the inspection report to their supervisor  for endorsement within 10 days of the closeout of a foreign inspection,  regardless of when the investigator’s next inspection is scheduled for, or  whether the investigator has to travel from overseas back to the United  States after the inspection. For example, if a domestic investigator finds  serious deficiencies on the first inspection of an overseas trip—thus  indicating an initial OAI classification—the investigator needs to write and  send the related inspection report to the ORA supervisor for endorsement  before returning home from the 3-week overseas trip to meet the required  time frame. One investigator told us that, as a result of the time  pressures, post-inspection reports may be less thorough, and that some  inspection observations could be better supported if investigators had  more time to write the reports.

In conclusion, foreign manufacturing establishments continue to be a  critical source of drugs for millions of Americans, and FDA inspections are  a key tool to ensure the quality of these drugs. Over the years since we  first examined this issue, FDA has made significant changes to adapt to  the globalization of the pharmaceutical supply chain and has greatly  increased the number of inspections it conducts of foreign  establishments. However, we found in December 2019 that the agency  faced many of the same challenges overseeing foreign establishments  that we identified over the last two decades. These included inspector  vacancies and unique challenges when inspecting foreign drug  establishments that raised questions about the equivalence of those  inspections to domestic inspections. Since then, the outbreak of COVID- 19 has added a layer of complexity. It also further highlights the global  nature of our pharmaceutical supply chain.

Chairman Grassley, Ranking Member Wyden, and Members of the  Committee, this completes my prepared statement. I would be pleased to  respond to any questions that you may have at this time.

If you or your staff have any questions about this testimony, please  contact Mary Denigan-Macauley, Director, Health Care at (202) 512-7114  or DeniganMacauleyM@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. GAO staff who made key contributions to this testimony  are William Hadley (Assistant Director); Derry Henrick (Analyst-in- Charge); Katherine L. Amoroso; George Bogart; Zhi Boon; Rebecca  Hendrickson; John Lalomio; Gail-Lynn Michel; Laurie Pachter; and Vikki  Porter.

This is a work of the U.S. government and is not subject to copyright protection in the  United States. The published product may be reproduced and distributed in its entirety  without further permission from GAO. However, because this work may contain  copyrighted images or other material, permission from the copyright holder may be  necessary if you wish to reproduce this material separately.

The outbreak of COVID-19 has called greater attention to the United States’ reliance on foreign drug manufacturers. Much of the drug manufacturing for the U.S. market happens overseas—and drugs for treating COVID-19 are no exception.

Food and Drug Administration inspections of foreign and domestic drug manufacturers are critical to ensuring drug safety and effectiveness.

But FDA began to postpone almost all inspections of foreign manufacturing establishments in March 2020 due to COVID-19. We testified that this lack of foreign inspections removes a critical source of information about the quality of drugs manufactured for the U.S. market.


Poverty Reduction: HHS Can Improve Information to Assist States and Localities in Adopting Approaches That Serve Whole Families

In 2018, nearly one in six children in the United States lived in families with incomes below the federal poverty thresholds, or about $26,000 annually for a family of four. Research has shown that poverty is associated with negative outcomes for the entire family. State and local entities are currently using two-generation, or whole family, approaches to reduce poverty and move families towards economic self-sufficiency. Senate Committee Report 115-150 included a provision for GAO to review two-generation approaches.

GAO examined (1) the primary federal programs that support two-generation approaches and how these programs were leveraged by selected state and local entities, and (2) the challenges selected state and local entities faced implementing two-generation approaches and steps federal agencies have taken to address those challenges. GAO reviewed relevant federal, state, and local agency documentation; and interviewed officials from five federal agencies, and from 23 state and local entities in five states. States were selected to achieve variation in approaches used and percentage of families with children in poverty, among other factors.

To reduce poverty through a two-generation approach, which involves working simultaneously with adults and children in a family, selected state and local entities most commonly reported leveraging resources from 10 federal programs. Among the 10 programs were the Department of Health and Human Services' (HHS) Temporary Assistance for Needy Families and Head Start; the Department of Agriculture's Supplemental Nutrition Assistance Program; and three Department of Labor Workforce Innovation and Opportunity Act core programs. Some of these entities also reported using state, local, and/or philanthropic resources to enhance their flexibility to provide services.

State and local officials told GAO that difficulties with data sharing and limited information on successful two-generation approaches made it challenging to implement them, and some federal agencies have taken steps to address these challenges. State and local officials said that data sharing is difficult due to various concerns, including protecting participant privacy. Multiple federal agencies have resources on data sharing that may be useful to entities implementing two-generation approaches. State and local officials also said they wanted more examples of successful two-generation approaches and information on federal funding to implement them. To help address this challenge, various federal offices provided information and technical assistance, but the information is distributed via separate email lists and websites, thereby limiting cross-programmatic access and availability. HHS officials said the interagency Council on Economic Mobility—led by HHS—may help address information sharing. Given its recent establishment, related efforts are yet to be seen. Without readily available information, state and local entities may lack useful resources when designing programs to serve families.

GAO recommends that HHS, in consultation with the Council on Economic Mobility, make information on two-generation approaches readily available. HHS agreed with GAO's recommendation.

In 2018, approximately one in six children in the United States lived in  families with incomes below the federal poverty thresholds, or about  $26,000 annually for a family of four. Research has shown that poverty is  associated with negative outcomes for the entire family. For example,  low-income parents often have minimal access to education and job  training opportunities, reliable housing, transportation, and quality child  care, which limits their ability to achieve economic security. While many  parents provide nurturing environments for their children amidst these  challenges, these stressors can compromise family well-being. For  example, the stress of living in poverty can lessen parental emotional  support for children. When child development is not fully supported by  parents, children may be less prepared for school, more likely to drop out,  and more likely to remain in poverty as adults.

Two-generation poverty reduction approaches—also referred to as whole  family approaches—are used by federal, state, and local government  agencies, and non-governmental organizations, to reduce poverty and  move low-income families towards economic self-sufficiency. Two- generation approaches combine multiple programs and/or services to  holistically address the needs of low-income families. By combining  services, these approaches address intergenerational poverty in a way  that is beyond what any single federal program was designed to  accomplish, according to the Department of Health and Human Services  (HHS). Specifically, two-generation approaches bring together child- serving programs, such as early childhood and K-12 education, and adult- serving programs, such as workforce development and post-secondary  education. Despite the potential benefits of two-generation approaches,  states may face challenges in implementing them, including managing  inconsistent or competing requirements across programs serving low- income families, according to HHS.

Senate Appropriations Committee Report 115-150 included a provision  for GAO to identify federal programs that could be used in two-generation  poverty reduction approaches and any challenges faced by organizations  that are implementing these approaches. This report examines (1) the  primary federal programs that support selected two-generation  approaches and how these programs were leveraged by selected state  and local entities, and (2) the challenges selected state and local entities  faced implementing two-generation approaches and steps federal  agencies have taken to address those challenges.

To address these objectives, we interviewed representatives of 23 state  and local entities from five states: Colorado, Connecticut, Georgia,  Maryland, and Minnesota. To select these states, we compiled a list of  state and local two-generation approaches based on interviews with  federal agency officials, representatives of stakeholder groups active in  supporting two-generation approaches, and reviews of publications on  two-generation approaches. For those states with two-generation  approaches, we also collected information from the U.S. Census Bureau  website, such as their population size and percentage of families with  children in poverty. We selected these five states to achieve variation in  two-generation approaches, population size, percentage of families with  children in poverty, and geographic region, among other factors. In each  state, we interviewed officials in state and/or local government and non- governmental organizations. We selected interviewees in each state  based on recommendations made by the state’s Two-Generation  Program Manager or other state agency officials, recommendations made  by stakeholder groups, and/or information we compiled on organizations  implementing two-generation approaches. These interviews are not  generalizable to two-generation approaches nationwide.

In addition, we interviewed officials from five federal agencies:  Departments of Agriculture (USDA), Education (Education), HHS,  Housing and Urban Development (HUD), and Labor (DOL). We selected  these agencies because they all administer programs that serve low- income individuals and families. We also interviewed representatives of  six stakeholder groups—including the National Governors Association  and Ascend at the Aspen Institute—that supported or promoted two- generation poverty reduction approaches and/or were recommended by  federal agency officials. In addition, we reviewed relevant documentation,  such as federal, state, and local agency documentation on two-generation  approaches and prior GAO reports on low-income programs. services through a comprehensive, holistic approach with state level leadership support.  Ascend is a national organization focused on supporting the implementation of two- generation approaches.

Federal Programs for Low- Income Individuals and Families

We previously found that there are more than 80 federal programs that  provide aid to people with low incomes, which are administered by  several federal agencies as well as state and local providers. We  reported that the low-income programs were created at various times, to  serve different populations, and in response to different policy issues. We  also found that many of these programs provide assistance such as cash  aid, food, shelter, and health care for those who have limited means or  are disadvantaged in other ways, while other programs are designed to  help low-income people move toward self-sufficiency through education,  training, and employment services.

In their current strategic plans, some agencies include goals related to  supporting individuals or families to help them move towards self- sufficiency. For example, HHS has a strategic objective to “encourage  self-sufficiency and personal responsibility, and eliminate barriers to  economic opportunity.” Officials from HHS’s Administration for Children  and Families (ACF) said they are currently updating ACF’s strategic plan  and it will likely include a vision of ending multigenerational poverty  through primary prevention by using a whole family—or two-generation— approach that proactively connects families to services before they are in  crisis.

Two-Generation Approaches to Poverty Reduction

Two-generation approaches are different from individual low-income  programs because these approaches simultaneously address multiple  areas, such as child and family economic supports, education,  employment, health, well-being, and social capital, according to HHS.  These approaches are based on findings that connect the well-being of  parents to their children’s social, emotional, physical, and economic well- being. For example, research indicates that parents’ improved economic  security is linked to improvements in children’s home environment,  greater parental engagement in their children’s schooling, and stronger  parenting skills, which may lead to improved child outcomes. Similarly,  children’s well-being directly affects their parents’ ability to succeed in  both school and the workplace. For example, if parents participate in a  workforce training program, but cannot access safe and affordable child  care, they may not be able to accept or keep the job for which they  trained. Research developed by an ACF-sponsored project states that  two-generation approaches are hypothesized to result in parents  experiencing stronger labor force attachment or increased earnings,  children improving their school readiness and academic achievement,  and families increasing family functioning, community connectedness,  goal-directed behavior, and executive functioning, among other potential  outcomes.

This approach is not a new idea. For example, Head Start programs,  which started in 1965, provide early education services to low-income  children while offering support to families, such as services that promote  housing stability, continued education, and financial security. In addition,  federal programs have supported past efforts to improve service  coordination for low-income families, such as the use of one-stop centers  that deliver workforce, education, and other support services at a single  location. These previous efforts, however, often prioritized one generation  over the other, according to researchers. Researchers also found that  these previous efforts tended to not provide the intensity or duration of  services needed to create change for low-income families.

More recent two-generation approaches are intentionally meant to  provide services for parents, children, and families in innovative ways by  equally addressing the needs of children and parents using quality  programs and interventions. For example, ACF is using a human- centered design approach to work across its programs to help families  achieve economic independence. Human-centered design aims to create  solutions from the point-of-view of families that are in need and the states  that serve them and to design systems and service delivery to fit families  instead of the other way around, according to ACF. These newer two- generation approaches, which aim to be higher quality and more intensive  than previous efforts, are still being tested. ACF and others are currently  evaluating the effectiveness of these two-generation approaches.

Selected State and Local Entities Most Commonly Reported Using 10 Federal Programs to Meet the Unique Needs of Local Communities

The 10 Most Cited Federal Programs Have Characteristics That Allow State and Local Entities to Address Multiple Aspects of Child and Parent Well- Being

Ten federal programs were most commonly cited by selected state and  local entities as being used to serve whole families and reduce poverty  (see table 1). These programs are administered by USDA, HHS, and  DOL.

Federal officials have reported that the 10 programs have  characteristics—including the target populations, purposes, and services  provided—that allow state and local entities to address multiple aspects  of child and parent well-being, and these have implications for their two- generation approaches. (See appendix I for the target population,  purpose, and services provided by the 10 federal programs.) Specifically:

Target Populations. Consistent with two-generation approaches,  many of the federal programs target low-income, needy, or at-risk  families. However, we previously reported that eligibility requirements  for some low-income programs vary significantly with regard to who  may obtain benefits and services, how income is counted, and the  maximum income applicants may have. As a result, state and local  officials told us that some families who they would like to engage in  two-generation approaches are not eligible for some of the federally- funded programs they use for these approaches.

Purpose. The purposes of Temporary Assistance for Needy Families  (TANF) and the Community Services Block Grant (CSBG) are broad  and can be used to support families in multiple ways. For example,  CSBG’s purposes are, among other things, to reduce poverty,  revitalize low-income communities, and empower low-income  individuals and families to become fully self-sufficient. In addition,  according to HHS, these two broad programs allow state and local  agencies to cover costs that other programs do not allow, such as  salaries for staff to design the two-generation approach. Among the  23 state and local entities, officials from the three entities that reported  using CSBG and seven of the 11 that reported using TANF said that  they used the programs in combination with other federal programs  that have more limited purposes. The other programs can be used to  provide more specific supports, such as developing child care  programs, increasing employment and earnings, alleviating hunger, or  improving maternal and child health.

Benefits or Services Provided. A range of benefits and services for  both children and parents are available across the 10 federal  programs, such as child care, food assistance, and job skills training.  To create their two-generation approach, state and local entities can,  to the extent permitted by law, combine services from multiple  programs to provide a coordinated approach to addressing the needs  of the entire family. In fact, according to HHS, combining services  from multiple programs is common in two-generation approaches  because single programs tend to cover only one type of service or  may be for parents or children instead of both.

In addition to the 10 most commonly cited federal programs, state and  local entities reported using over 40 other federal programs to support  their two-generation approaches (see appendix II). For example, one  entity has a housing complex for single parents and their children. The  families receive HUD Section 8 Project-Based Rental Assistance, and the entity also provides support services such as child care, parenting  classes, and financial counseling. Two entities reported using Medicaid— one of the nation’s largest sources of funding for medical and other  health-related services for low-income individuals.

There may be additional federal programs beyond those cited that could  be used for two-generation approaches that selected state and local  entities did not report using. For example, HHS officials told us that the  Social Services Block Grant could be used for two-generation approaches  because it is one of the most flexible sources of social services funding.  HUD officials said the Family Self-Sufficiency Program provides case  management services and could be used for two-generation approaches.  However, none of the 23 selected state and local entities reported using  either program.

Selected State and Local Entities Combine Federal Programs with Other Resources in Multiple Ways to Support Their Unique Two-Generation Approaches

We found that selected entities leveraged the 10 most commonly cited  federal programs in different ways to meet the unique needs of their  individual communities. Officials from some entities reported using only  one of the 10 programs, while one entity reported using as many as  seven of the programs. In addition, all of the 23 selected entities reported  using other resources, including state, local, and/or philanthropic funds, to  create their two-generation approaches (see fig. 1). Some state and local  officials said these additional resources were needed to provide flexibility  in meeting the needs of families. For example, officials from one agency  told us they used additional resources to provide services to families with  incomes that exceeded the eligibility limits for federal programs, noting  that some with higher incomes were still in need of assistance.

To create their unique two-generation poverty reduction approaches and  address the needs of their communities, selected entities reported the  significance of involving leadership, changing policies, expanding  services, modifying service delivery practices, and/or serving specific  populations. Specifically:  Involving Leadership. In some states, the governor or state  legislature encouraged state agencies to adopt two-generation  approaches and/or staff were hired to lead the state’s efforts in  implementing two-generation approaches, according to officials. For  example, officials told us that Maryland’s governor and Connecticut’s  state legislature created commissions with membership from state  agencies, local organizations, and the public. The commissions made  recommendations related to mitigating multigenerational poverty and  developing local programs to pilot two-generation approaches. In  addition, Colorado, Connecticut, Maryland, and Minnesota officials  reported hiring a two-generation approach program manager within  state government to coordinate the state’s efforts across agencies  and programs to implement such approaches.

Changing Policies. Officials from some states said they changed  policies to better support families as part of their two-generation  approaches, such as modifying eligibility requirements for certain  services. For example, officials from a Colorado state agency said  they changed policies across a range of programs to be more family  friendly, such as providing transitional food assistance to families no  longer eligible for TANF. Officials from a Georgia state agency said  they made a number of policy changes, such as increasing the  income eligibility threshold for child care subsidies to help families  retain this care as their income increases.

Expanding Services. Some officials also reported providing  additional services to families that they had not provided in the past.  For example, a Colorado state agency is piloting an expansion of its  maternal and child home visiting program that adds employment,  education, and child care to the supports the program already  provides in order to improve family economic self-sufficiency. A  Colorado local department now provides short-term housing with  support services, in addition to its existing emergency shelters, for  some families experiencing homelessness.

Modifying Service Delivery Practices. Selected state and local  entities sometimes changed the methods they used to deliver services  to families, according to officials. For example, families served by a  local agency in Maryland complete an intake form and a strengths and  needs assessment. A trained coach then helps the family complete a  pathway plan with family goals and action steps. A Minnesota local  department is implementing new tools to assess the health, nutrition,  education, and employment needs of families and connect them to  supports across the department. A Connecticut state agency is  employing a family centered coaching model in its Jobs First  Employment Services Program. The coaching goes beyond traditional  job search assistance by identifying the needs of children and parents  and providing financial literacy training.

Serving Specific Populations. Two-generation approaches by  selected non-governmental organizations generally provided services  to more specific populations, such as single parents or the families of  children in certain schools. For example, a non-governmental  organization in Minnesota serves single mothers and their young  children by providing housing, on-site early childhood education, and  weekly life skills training while mothers earn post-secondary  credentials. Another non-governmental organization in Minnesota  serves families of children in Minneapolis schools and assists families  in accessing a variety of services, such as housing stabilization,  health, career, and financial counseling. A non-governmental  organization in Connecticut provides support services for the parents  of children attending its preschool, including helping parents become  certified child care workers and obtain full-time employment in a  preschool program.

Selected State and Local Entities Reported Challenges Related to Data Sharing and a Lack of Information on Successful Two- Generation Approaches

Difficulties with Data Sharing Impeded Selected State and Local Entities’ Two-Generation Approaches

Officials from 14 of 23 state and local entities reported challenges related  to sharing data across low-income programs. We found that some state  and local entities have data sharing practices in place, while others are in  the midst of designing or creating related systems. Sharing data across  systems and programs serving low-income families could enhance state  and local two-generation approaches. For example, officials in one county  said that if more robust data sharing occurred across agencies and  systems, they would have access to information that would help them  make decisions based on the needs of the families they serve.  Additionally, officials from one non-governmental organization said they  wanted to share data with other relevant organizations in order to be able  to measure the impact of their two-generation approach. We previously  found that states and localities used data sharing to improve case  management by helping caseworkers obtain client information more  quickly and make more informed decisions.

Yet, state and local officials said that data sharing is difficult due to issues  with linking data across low-income programs and concerns about how to  protect participant privacy. Specifically, officials from five state and local  entities reported issues related to linking data, including that a lack of  common data fields across low-income programs made it difficult for the  entities to share data. For example, officials at one state agency said they  wanted to link mental health and substance abuse data systems.  However, the officials have spent 6 years creating matching fields across  these systems to allow the data to be shared, and the process is not yet  complete. In addition, officials from seven entities said concerns about  protecting participant privacy contributed to their data sharing challenges.  For example, an official at a state agency noted it can be difficult to  balance protecting an individual’s privacy while sharing enough data to be  helpful to entities using two-generation approaches.

Federal agencies have taken steps to assist state and local entities  interested in data sharing by providing related resources and guidance  (see fig. 2). Although this information may not be specific to two- generation approaches, federal officials reported that it could be useful to  entities utilizing these approaches.

Selected State and Local Entities Reported a Need for More Information on Two-Generation Approaches

Officials from 11 of 23 state and local entities reported a lack of  information on two-generation approaches to be challenging. Specifically,  they wanted more examples of successful two-generation approaches,  opportunities to learn from peers, and information on federal funding  sources that can be used to implement these approaches. For example,  officials at one state agency said they had difficulties learning about  federal funding sources that do not directly relate to the agency, but could  be used to support two-generation approaches. In addition, officials at a  non-governmental organization said they would benefit from federally  sponsored peer learning so that they could gain knowledge from states  and localities to build into their two-generation work.

We found that HHS has developed information memorandums and policy  statements on two-generation approaches that address the topics desired  by state and local entities. HHS also has hosted webinars and  communities of learning to assist state and local entities that were  interested in adopting two-generation approaches. For some of these  efforts, HHS partnered with other federal agencies. Specifically, within  HHS/ACF, at least seven offices have developed information related to  two-generation approaches (see fig. 3 for examples). This information  discusses a range of topics, from funding flexibility to options for building  service models, that could assist state and local agencies in creating two- generation approaches.

According to federal internal control standards, managers should  externally communicate the information needed to achieve their  organizational goals. To help to ensure effective external  communication, managers may want to consider whether the information  is readily available to the intended audience when needed. While HHS  has created resources relevant to two-generation approaches, it has not  made this information readily available to all entities using two-generation  approaches. HHS officials said that they disseminate guidance and other  resources through existing program or office-specific mechanisms, such  as separate email lists and websites for each office. Other federal  agencies in our review also created information relevant to two- generation approaches that they distributed through existing program  mechanisms. For example, DOL officials said information related to two- generation approaches is woven into technical assistance as relevant to  various grant programs. Similarly, Education officials said they published  guidance on its website and sent it to state educational agencies and  other stakeholders through program specific email lists.

Given these current approaches to distribution, state and local entities  using two-generation approaches may not have access to or be aware of  all relevant resources if these resources are only available to recipients of  certain federal programs or entities in contact with certain federal offices.  Without access to all pertinent information, state and local agencies may  be unaware of the breadth of information available on two-generation  approaches and related topics and may be unable to use it to address  challenges they face while designing and implementing such approaches.

HHS recently identified an interagency effort that officials said should  address challenges faced by state and local entities, including their desire  for information on two-generation approaches. The interagency Council  on Economic Mobility was recently established and is led by HHS with  participation from USDA, Education, HUD, DOL, Department of the  Treasury, Social Security Administration, Office of Management and  Budget, Council of Economic Advisers, and Domestic Policy Council. Its  tentative mission is to “create an accountable and effective structure for  federal interagency collaboration encouraging economic mobility and to  use federal levers and tools to promote family-sustaining careers and  economic mobility for low-income Americans.” Since the Council on  Economic Mobility was only recently established, it is too early to  determine whether it will make information readily available across federal  programs that is relevant to state and local entities using two-generation  approaches.

Poverty negatively affects many aspects of a family’s life, including a  child’s education and a parent’s ability to participate in the labor force.  Previous attempts to provide better service coordination for low-income  families lacked the intensity and quality of services needed for parents  and children to create effective change, according to researchers. Some  state and local entities are attempting to use two-generation approaches  to help families move towards economic self-sufficiency and alleviate the  impact of poverty on children, adults, and families through quality  programs that address the needs of both generations. State and local  officials that we interviewed have implemented a variety of two-generation  approaches, but some said they do not have sufficient information on  these approaches to most effectively serve families. HHS and other  agencies have taken steps to address these challenges, including  providing webinars, information memorandums, and other assistance.  However, most of these resources are shared through individual program  and office mechanisms, potentially making them difficult to access by  those not directly connected to certain programs and offices. Moving  forward, readily available information and assistance could more  effectively help state and local officials learn how to better serve families  and help break the cycle of multi-generational poverty.

We are making the following recommendation to HHS:  The Secretary of HHS, in consultation with the Council on Economic  Mobility, should make information that would assist state and local entities  in developing and implementing two-generation poverty reduction  approaches readily available across federal programs and offices.  (Recommendation 1)

We provided a draft of this report to USDA, Education, HHS, HUD, and  DOL for comment. We received written comments from HHS, which are  reproduced in Appendix III. HHS concurred with our recommendation.  The agency stated that through its coordination of the Council on  Economic Mobility it will promote poverty reduction approaches that aim  to provide more integrated, person-centered service delivery. In addition,  HHS stated that it will work to identify opportunities for collaboration,  promising practices, and successful models that promote economic  mobility and will develop strategies for promoting them, such as through  technical assistance. HHS also provided technical comments, which we  incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretaries of the Departments of Agriculture, Education,  Health and Human Services, Housing and Urban Development, and  Labor, and other interested parties. In addition, the report is available at  no charge on the GAO website at https://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-7215 or larink@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made key contributions to this report are  listed in appendix IV.

Appendix I: Characteristics of Federal  Programs Most Commonly Cited by Selected  Entities Implementing Two-Generation  Approaches To develop child care programs that best suit the  needs of children and parents in each state, to  empower working parents to make their own  decisions on the child care that best suits their  family’s needs, to provide consumer education  to help parents make informed decisions, to  provide child care to parents trying to achieve  independence from public assistance, and to  help states implement their child care regulatory  standards.   To enforce the support obligations owed by  noncustodial parents for the support of their  children through locating noncustodial parents,  establishing paternity, obtaining child support,  and assuring that assistance in obtaining  support or order modifications will be available to  all who request such assistance.

To reduce poverty, revitalize low-income  communities, and empower low-income  individuals and families in rural and urban areas  to become fully self-sufficient.

Noncustodial parent location, paternity  establishment, establishment of child  support orders, review and modification  of child support orders, collection of  child support payments, distribution of  child support payments, and  establishment and enforcement of  medical support.   A wide range of locally determined  services and strategies may be  supported to help low-income  individuals and families become self- sufficient; address the needs of youth in  low-income communities; and  effectively use and coordinate with  related programs.   Comprehensive child development  services, including educational, dental,  medical, nutritional, and social services  to children and their families. Services  may be center based, home-based,  family child care, or a combination, and  may be full- or part-day or full- or part- year.

To provide two-generation child development,  family engagement, and family support services  to pregnant women and young children from  birth to age 5 and their families. The purpose of  the program is to promote children’s school  readiness by enhancing social and cognitive  development and by providing educational,  health, nutritional, social and other services for  children and families.  To improve maternal and child health, prevent  child abuse and neglect, encourage positive  parenting, and promote child development and  school readiness.

Regular home visits and support  services from a nurse, social worker, or  other professional. Families are  provided services that are tailored to  their specific needs, such as teaching  parenting skills, promoting early  learning in the home, or conducting  screenings and providing referrals to  address caregiver depression,  substance abuse, and family violence.

Program  Supplemental  Nutrition Assistance  Program (SNAP)

To alleviate hunger and malnutrition and permit  low-income households to obtain a more  nutritious diet by increasing their food  purchasing power.

Temporary  Assistance for Needy  Families (TANF)

To accomplish one or more of the following: (1)  provide assistance to needy families so that  children may be cared for in their own homes or  in the homes of relatives; (2) end the  dependence of needy parents on government  benefits by promoting job preparation, work, and  marriage; (3) prevent and reduce the incidence  of out-of-wedlock pregnancies; and (4)  encourage the formation and maintenance of  two-parent families.   To provide a combination of education and  training services that help job seekers obtain  employment and advance in the labor market, to  emphasize the alignment and integration of  Workforce Innovation and Opportunity Act  (WIOA) programs, to emphasize that employers  are also customers of the workforce system, and  to involve employers in helping the system  provide the skilled workers they need.  To provide a combination of education and  training services that help job seekers obtain  employment and advance in the labor market, to  emphasize the alignment and integration of  WIOA programs, to emphasize that employers  are also customers of the workforce system, and  to involve employers in helping the system  provide the skilled workers they need.  To provide a combination of education and  training services that help job seekers obtain  employment and advance in the labor market, to  emphasize the alignment and integration of  WIOA programs, to emphasize that employers  are also customers of the workforce system, and  to involve employers in helping the system  provide the skilled workers they need.

Benefit or service provided  Benefits are provided through an  electronic benefit transfer card to  purchase food from authorized  retailers. Allotments are determined on  the basis of the thrifty food plan.   TANF-funded services include: cash  assistance (benefit levels and eligibility  criteria defined by individual states);  noncash services, including child care,  work activities, work supports, and  some child welfare services; and  various other social services directed  toward the statutory goals of family  formation and reduced non-marital  pregnancies.  Employment services, including job  searches and placement assistance,  and referrals to employers.

Training and services, such as  occupational skills training, career  counseling, and job searches.

Educational supports, occupational  skills training, counseling, and paid and  unpaid work experiences.

Appendix II: Additional Programs Cited by Selected State and Local Officials

In addition to the 10 most commonly cited federal programs, state and  local entities reported using over 40 other federal programs to support  their two-generation approaches to poverty reduction. These programs  are administered by the Corporation for National and Community Service  and the Departments of Agriculture, Education, Health and Human  Services, Housing and Urban Development, Justice, Labor,  Transportation, and Treasury. See tables 3 through 11 below.

Appendix III: Comments from the Department of Health and Human Services

Appendix IV: GAO Contact and Staff Acknowledgments

In addition to the contact named above, the following individuals made  key contributions to this report: Rachel Frisk and Danielle Giese  (Assistant Directors), Andrea Dawson (Analyst-in-Charge), Gretel Clarke,  Kelsey Kreider, and Kelly Snow. Also contributing to this report were Alex  Galuten, Melissa Jaynes, Joy Solmonson, Almeta Spencer, Curtia Taylor,  and Walter Vance.

Poverty can cause problems for both parents and children. Some state and local agencies are working to address this issue by combining multiple services to meet the needs of the whole family. Doing so could help reduce poverty and move families toward self-sufficiency.

However, the agencies we spoke with wanted more federal assistance to help with this approach. For instance, they wanted more examples of successful whole-family strategies and information on how federal funding can be used to implement them.

We recommended that the Department of Health and Human Services make this information readily available.