The states are already running their own programs so efficiency isn't the issue. The problem is the Fed wants to tell them how to run and regulate them. Even ignoring the inefficiencies created by being forced to meet regulations that often make no sense the work it takes to ensure you are meeting those regulations creates inefficiencies. State and local governments have to hire hoards of additional people just to do the extra paper work and to audit themselves in order to ensure they meeting them.

State governments are run by grownups and they don't need mommy fed to look over their shoulders.