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Shortfalls of the Low Income Home Energy Assistance Program

This past summer, millions of Americans in low income areas struggled with the extreme heat. Individuals with limited income had to choose between paying for air conditioning or paying for basic necessities such as the costs of food and medical care. In an effort to alleviate the stress of air conditioning bills, the Biden administration invested billions into the federal Low Income Home Energy Assistance Program (LIHEAP). LIHEAP subsidizes the cost of energy bills for low income Americans (Snow, 2023). Despite the increased funding for LIHEAP, only 3% of Americans received this subsidy despite the fact that many more qualified. States do not have enough federal funding to implement LIHEAP for all qualified Americans. Many American must turn to forms of emergency assistance such as Catholic Charities and the Salvation Army. Although these charities provide much needed aid, it usually only a one time occurrence (Snow, 2023).

The struggles associated with LIHEAP's lack of funding relates mostly to the activity statement and the statement of cash flows. The activity statement of a company shows how efficiently and effectively public sector organizations are allocating their resources. In regard to LIHEAP, it is evident that federal aid programs are not allocating resources in a manner that allows sufficient funding and services to Americans struggling to pay for energy services. The Statement of Cash Flows demonstrates the change in cash from the beginning to end of a period. Based on the information in the article, it can be assumed that LIHEAP does not generate sufficient cash flows to provide adequate federal assistance.