Grants Management:

Enhancing Performance Accountability Provisions Could Lead to Better Results

GAO-06-1046: Published: Sep 29, 2006. Publicly Released: Sep 29, 2006.

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Maximizing the extent to which grants achieve their long-term performance goals is critical to successfully addressing the challenges of the 21st century. While performance accountability mechanisms are fairly new to federal grants, they have been used in contracts for some time and lessons learned have begun to inform federal grant design. Given this, GAO was asked to examine (1) challenges to performance accountability in federal grants, (2) mechanisms being used to improve grant performance, and (3) strategies the federal government can use to encourage the use of these mechanisms. GAO performed a content analysis of relevant literature and interviewed experts. To illustrate the mechanisms and strategies found in the literature, GAO used examples from the literature and selected additional case illustrations--two federal grant programs (vocational education and child support enforcement) and two nonfederal contracts--for further study.

Accountability provisions in federal grants can vary widely. They can be financial (e.g., bonus payments) or nonfinancial (e.g., altered oversight or flexibility), and can be employed by various actors at different stages in the grant life cycle. Mechanisms need to be tailored to specific situations since there is no "one-size-fits-all" solution. Collectively, five key strategies appear to facilitate the effective design and implementation of performance accountability mechanisms. They are as follows: 1. ensure mechanisms are of sufficient value to motivate desired behaviors, 2. periodically renegotiate and revise mechanisms and measures, 3. ensure appropriate measurement selection, 4. ensure grantor and grantee technical capacity, and 5. allow for phased implementation. In addition to these strategies, collaboration, oversight, and feedback also appear critical to the success of performance accountability mechanisms. Opportunities exist to improve the design and implementation of federal grants. A results-focused design can enable and facilitate the use of accountability provisions. National program evaluation studies and demonstration grants can provide valuable information to support oversight of and knowledge about accountability mechanisms. Finally, the Office of Management and Budget (OMB), agencies, and grantees can benefit from sharing good practices and lessons learned regarding performance accountability provisions. OMB recognized the value in sharing information on performance accountability mechanisms, but has not yet focused on this issue.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: The Director of OMB should encourage and assist federal agencies in working with the Congress to expand the effective use of performance accountability mechanisms, focusing on the practices in this report, when federal grant programs are being created or reauthorized. Further, OMB should offer opportunities for knowledge transfer among federal agencies and encourage agencies to share leading practices and lessons learned in implementing grant accountability mechanisms. Possible vehicles for the collection and dissemination of this information include good practices guides and workshops and Web sites such as results.gov, grants.gov, and expectmore.gov.

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

    Status: Closed - Implemented

    Comments: OMB confirmed that GAO's work on grants accountability significantly informed its approach to encouraging performance accountability in grants. In November 2007 OMB issued an Executive Order creating the Performance Improvement Council (PIC) and dedicated Performance Improvement Officers (PIO) in each agency. Among other things, the PIC and PIOs are meant to share leading practices related to performance improvement in general, as well as specifically related to grant performance. For example, PIOs are to work with implementing partners/grantees and stakeholders, including other agencies, to review and improve program performance and to benchmark progress against similar programs and explore opportunities for common measures. Building on this effort, in February 2010, OMB announced that the PIC developed several cross-agency "Problem Solving Networks." According to an OMB official, one of the new networks focuses on collecting and disseminating good practices for performance accountability in grants to state and local governments. OMB described the networks as a means to tap into existing networks, both inside and outside Government, to "find and develop smarter performance management methods and to assist others in their application" and leverage their dissemination and delivery capacity.

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