Grants Management:

Additional Actions Needed to Streamline and Simplify Processes

GAO-05-335: Published: Apr 18, 2005. Publicly Released: Apr 18, 2005.

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The federal government distributed about $400 billion in federal grants in fiscal year 2003 through about 1,000 different federal grant programs administered by several federal agencies with different administrative requirements. Congress, concerned that some of these requirements may be duplicative, burdensome, or conflicting--and could impede cost-effective delivery of services--passed the Federal Financial Assistance Management Improvement Act of 1999, commonly called P.L. 106-107, and mandated that GAO assess the act's effectiveness. This report addresses (1) progress made to streamline and develop common processes for grantees and (2) the coordination among the Office of Management and Budget (OMB), the agencies, and potential grant recipients.

More than 5 years after passage of P.L. 106-107, grant agencies have made progress in some areas of grant administration, but in other areas, particularly the development of common reporting systems, progress is just beginning. Grant-making agencies together developed a common plan for streamlining processes. Several cross-agency teams identified changes that should be made, and these plans are in various stages of completion. For example, a Web-based system, Grants.gov, is now available to help potential grantees identify grant opportunities and apply for them electronically. Common forms are being developed to eliminate duplication and unnecessary differences among agencies. However, efforts toward common electronic systems for reporting financial and performance information have not been developed, although the law requiring them sunsets in 2007. Further, individual agencies have not all reported on their progress annually, as required. The individual agencies and the cross-agency work groups have a mixed record of coordinating with grantees. For example, the cross-agency work groups solicited public input to their early plan. Grants.gov publicizes its plans and solicits ongoing grantee input through its Web site and user surveys. However, the work groups generally have not made information about their work public nor solicited ongoing grantee input. Without such input, reforms are less likely to meet the needs of grantees. In general, the oversight of streamlining initiatives has shifted, potentially contributing to the lack of progress on all aspects of grant management.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: To help ensure that various cross-agency grant streamlining initiatives are linked and working toward common goals, we recommended that the Office of Management and Budget (OMB) ensure that its strategy for addressing the requirements of P.L. 106-107 integrate the three individual initiatives underway. These included the overarching grant streamlining efforts, the Grants.gov website where grant opportunities can be identified and applications can be submitted, and the Grants Management Line of Business, which will allow for common grant management systems that grantees can use to report on and manage grants across government. In response to our recommendation, the federal government's structure for implementing grant streamlining has been reorganized since our April 2005 report. Two entities are involved, with both reporting to two individuals in OMB who regularly communicate and attend meetings of both groups. Communication between the boards has increased. In the fall of 2005, each group identified a liaison who regularly attends the other group's meetings and communicates key information. With the clearer organization of the initiatives and the identification of specific means of communication between the two groups, the recommendation to integrate the individual initiatives has been implemented.

    Recommendation: In order to augment the progress toward meeting the goals of P.L. 106-107 for streamlining grant administration, the Director, OMB, should ensure that OMB's strategy for addressing P.L. 106-107 integrates the three individual initiatives: HHS's overarching P.L. 106-107 efforts, the Grants.gov program, and the Grants Management Line of Business initiative.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  2. Status: Closed - Implemented

    Comments: GAO's April 2005 report (GAO-05-335) said that efforts toward common electronic systems for reporting financial and performance information for financial assistance (primarily grants) had not been developed, although they were required under PL 106-107, the Federal Financial Assistance Management Improvement Act. While the Grants Management Line of Business team had proposed a consortia-based approach to streamline and consolidate the end-to-end grant management process, the development of that system was not yet underway as of report issuance. The report concluded that the lack of continuity toward meeting PL 106-107's requirement to develop a common reporting system for similar programs could prevent agencies from reaching the act's goals. It recommended that OMB ensure that efforts to develop common grant-reporting systems are undertaken on a schedule that would result in significant progress by the time PL 106-107 sunset in November 2007. Further, as we mentioned in a second report on grantees' concerns with streamlining efforts (GAO-06-566), grantees expressed a need to address post award administration of grants. According to the co-chair of the Grants Management Line of Business team, at the time of our April 2005 report, the process of developing the common grant management system had been languishing and had not moved forward for several months. However, the report raised the issue of the lack of progress and, following its release, it was discussed in several forums. At meetings of various groups focused on grant management, such as the Grants Executive Board, Grants.gov, and the Grants Policy Committee, individuals pointed out that GAO had made this recommendation. Further, the National Grants Partnership (which provides a forum for grant stakeholders) prepared a "white paper" that laid out how it thought the GAO recommendation on common grant reporting should be implemented. The co-chair of the Grants Management Line of Business team said that the report had raised the issue to their attention, and helped them focus on what needed to be done and make progress. In June 2005, OMB reinvigorated the Grants Management Line of Business initiative, and in September 2005, those working on the initiative drafted a detailed business case (Exhibit 300) that included plans for implementation. In February 2006, OMB identified three agencies to lead consortia and define a common solution for the consortia. As a result of the ongoing implementation of the common solution, the business case states that significant savings will be realized, as well as reduced error rates and time savings for grantees. The FY 2007 business plan estimates a cost savings through FY 2015 of $3.4 billion (with a net present value of $1.5 billion) from eliminating or reducing the costs associated with multiple agencies developing and maintaining grants management systems. Cumulative savings after deducting the system costs through FY 2008 (the present year plus one) are $127,413,000. Agencies were required to either sign a memorandum of understanding with one of the consortia leads to work with that agency or file an appeal with OMB by December 31, 2007. As of December 2007, nine agencies had signed an agreement to work with a consortia member and each consortia already had some partners.

    Recommendation: In order to augment the progress toward meeting the goals of P.L. 106-107 for streamlining grant administration, the Director, OMB, should ensure that efforts to develop common grant-reporting systems are undertaken on a schedule that will result in significant progress by the time P.L. 106-107 sunsets in November 2007.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  3. Status: Closed - Implemented

    Comments: As a result of the our finding and a recommendation in our April 2005 report, agencies are being held accountable for submitting their annual progress reports on PL 106-107 initiatives. We reported that agencies had not been held accountable for submitting these reports required by the law and recommended that OMB ensure that agencies' annual progress reports are prepared and contain information on their progress toward goals. All but one of the agencies submitted reports for 2005, and 24 of the 26 agencies submitted reports for 2006. According to the PL 106-107 Program Manager, the GAO recommendation on timely submission of annual reports was useful as a driver to encourage agencies to submit the reports. They were able to say that the GAO report had pointed out that the required reports were not submitted and that reports were needed. In addition, OMB provided revised requirements for the agency annual reports in July 2006 that required agencies to report their progress toward goals, such as participation in Grants.gov and the Grants Management Line of Business streamlining initiatives. The reports were again required for 2007. The 2007 cross-government report and 17 agency reports were presented on the grant streamlining website as of 4-15-08.

    Recommendation: In order to augment the progress toward meeting the goals of P.L. 106-107 for streamlining grant administration, the Director, OMB, should ensure that agency annual progress reports to Congress and OMB on implementation of P.L. 106-107 are prepared and contain information on their progress toward goals.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  4. Status: Closed - Implemented

    Comments: Since the April 2005 report, several efforts to set and better define goals have been undertaken. OMB met with Grants.gov representatives to discuss performance measures and set timelines for requiring agencies' participation in Grants.gov's "apply" function. The Grants Policy Committee, reinvigorated in 2005, laid out a schedule of tasks, schedules and milestones in late 2005 and early 2006. They have since updated that schedule with an analysis of the law's requirements, GAO report findings and recommendations, the work group responsible for action, and the related milestone dates. In February 2007, a strategic planning workshop was convened, involving the Grants Policy Committee, the work group chairs, the PL 106-107 program management office, and OMB, to discuss the plan. In October 2007, a draft strategic plan was presented to the grant community in a webcast. According to the Grants Policy Committee Chairman, as of February 2008, the plan has been accepted and implementation plans are being developed. The strategic plan lays out goals for the initiatives and roles of the different entities involved.

    Recommendation: In order to augment the progress toward meeting the goals of P.L. 106-107 for streamlining grant administration, the Director, OMB, should ensure that individual agency and cross-agency initiatives have clear goals for completion of their initiatives.

    Agency Affected: Executive Office of the President: Office of Management and Budget

  5. Status: Closed - Implemented

    Comments: In April 2005, GAO pointed out that various grant streamlining efforts were not seeking timely information from grantees on the grant management problems they were encountering and the impact of proposed solutions. GAO recommended that OMB solicit grantee input and provide for coordination with grantees on an ongoing basis. In response to the report, various entities developing cross-agency grant streamlining initiatives have increasingly sought grantees' views and reached out to inform grantees of their progress, as is required in P.L. 106-107, the Federal Financial Assistance Management Improvement Act of 1999. Following the report's release, the program manager for the P.L. 106-107 implementation stated that GAO had been correct in pointing out that grantee input had not been sought, and said that her office and the cross agency work groups had begun to work on connecting more closely with the grantee community. In October 2006, OMB stated that it will continue to work with the Grants Executive Board and the Grants Policy Committee to ensure that grantees' input is obtained as policies and procedures are developed by the PL 106-107 lead work groups. It also re-established the PL 106-107 inquiries mailbox on the PL 106-107 website, through which grantees can comment on and seek information on grant streamlining initiatives. Since then, various groups working on grant streamlining have begun to interact with grantees through presentations to outside groups and through webcasts that enable grantees to participate. (1) Grants.gov began hosting quarterly webcasts in January 2007 that explain the status of their changes and enable listeners to provide comments. The Grants.gov Program Manager said that they realized that their monthly stakeholder meetings with agency personnel were not helpful for obtaining system users' input and began to hold the webcasts as a way to get information about changes to grant applicants. She said that GAO's points on the need to have more grantee input encouraged Grants.gov to communicate more with grantees. (2) The Grants Policy Committee, which sets policy for grant streamlining activities across government, held its first webcast in October 2006 and another in March 2007 to update and inform interested stakeholders and receive feedback and clarify issues of concern. It also held a meeting in June 2007, which included an agenda item of receiving input from stakeholders to assist the committee in drafting a strategic plan to set priorities and inform its continued streamlining activities, and in October 2007. The Chairman also presented information on streamlining initiatives' status and answered questions at a meeting of the National Grants Management Association. (3) The National Grants Partnership, an organization where stakeholders may research and discuss grants administration issues, has hosted various federal representatives and provided an opportunity for grantees to respond through webcasts of its periodic meetings. Guests included representatives from Grants.gov and OMB. Presentations provided time for participating stakeholders to question the speakers.

    Recommendation: In order to augment the progress toward meeting the goals of P.L. 106-107 for streamlining grant administration, the Director, OMB, should solicit grantee input and provide for coordination with grantees on an ongoing basis.

    Agency Affected: Executive Office of the President: Office of Management and Budget

 

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