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Grants Management: EPA Has Opportunities to Improve Planning and Compliance Monitoring

GAO-15-618 Published: Aug 17, 2015. Publicly Released: Sep 17, 2015.
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Highlights

What GAO Found

Of the 17 performance goals in its 2009–2013 grants management plan, the Environmental Protection Agency (EPA) fully met 2, partially met 6, and did not meet 1. EPA did not measure its progress for the other 8 goals. EPA officials provided several reasons for meeting relatively few of the performance goals and not measuring the others. For example, according to officials, EPA did not measure progress for some goals because it redirected resources from achieving grants management goals to managing American Recovery and Reinvestment Act of 2009 grants, under which EPA more than doubled its grants in 2009. For 5 goals where EPA either did not meet the goal or did not measure performance, officials reported that there was no impact on the grants management program because EPA took mitigating actions or the negative effect of missing the goal was minimal. However, for 10 goals, GAO found a negative effect of EPA not measuring or partially meeting the goals, including an absence of data on compliance with policies, inefficient processes that increased workload, delayed processes for awarding grants, and delayed training and policy implementation.

As of May 2015, EPA's draft 2016–2020 grants management plan partially follows four relevant leading practices for federal strategic planning that GAO identified from prior work and Office of Management and Budget (OMB) guidance. Specifically, the draft plan

sets 5 strategic goals but has yet to link them to an overarching mission statement,

includes strategic objectives but has yet to define strategies to address management challenges or identify resources needed to achieve the goals,

ensures leadership accountability for just 1 of the 5 strategic goals, and

includes 11 performance measures but has so far only one measurable target.

By fully incorporating these leading practices, EPA could have better assurance that it has established an effective framework to guide and assess its efforts to meet its grants management goals and help address long-standing grants management weaknesses.

EPA has made progress monitoring grants management directives agencywide since GAO's 2006 report. For instance, EPA electronically tracks unspent grant funds and the timely submission of grantee reports. However, two key challenges hamper EPA's efforts to monitor such directives. First, 8 out of 10 regional offices use paper files to document compliance with grants management directives, so monitoring these offices' compliance requires resource-intensive manual file reviews. Second, the limited reporting and analysis capabilities of its IT systems leave EPA without agencywide information for most of the 212 directive requirements GAO reviewed. Although EPA deployed two web-based reporting tools to pull data from its IT system, it uses them to track 8 percent, or 17, of the 212 grants directive requirements GAO reviewed, making it difficult for managers to compare actual performance to expected results agencywide. EPA plans to fully implement an updated IT system by 2017, but it has had similar plans since 2009 and has not yet done so. By developing ways to more effectively use existing web-based tools until it implements its new IT system, EPA could better monitor compliance with grants management directives agencywide.

Why GAO Did This Study

In 2014, EPA disbursed about $4.6 billion in grants through its headquarters and 10 regional offices to states and others, in part to implement laws. In 2006, GAO identified weaknesses in EPA's grants management program, including the absence of goals, and made recommendations to address them. As part of its response to GAO's 2006 recommendations, EPA issued a 2009-2013 grants management plan.

GAO was asked to follow up on its 2006 review. This report examines (1) the extent to which EPA met the goals in its 2009–2013 plan, (2) the extent to which its draft 2016–2020 plan follows relevant leading practices for strategic grants management planning, and (3) the progress EPA has made since 2006 in monitoring agencywide compliance with grants directives.

GAO analyzed EPA's 2009–2013 plan and obtained EPA officials' responses to a standard set of questions regarding progress in achieving the goals; compared the draft 2016–2020 plan to four leading strategic planning practices relevant to grants management; compared 212 requirements from relevant grants directives to requirements tracked in EPA's grants management systems; and interviewed agency officials.

Recommendations

GAO recommends, among other things, that EPA fully follow leading strategic planning practices in its draft 2016–2020 plan and develop ways to more effectively use its web-based tools for monitoring compliance with directives. EPA generally agreed with GAO's findings and recommendations.

Recommendations for Executive Action

Agency Affected Recommendation Status
Environmental Protection Agency The EPA Administrator should direct the Office of Grants and Debarment (OGD) to incorporate all leading practices in federal strategic planning relevant to grants management as it finalizes its draft 2016-2020 grants management plan, such as defining strategies that address management challenges that may threaten the agency's ability to meet long-term goals and identifying the resources, actions, and time frames needed to meet these goals.
Closed – Implemented
In response to our recommendation, EPA fully incorporated each of the relevant leading practices for federal strategic planning in its final 2016-2020 grants management plan, issued in February, 2016. For example, EPA included a mission statement and an annual priority-setting process to identify strategies to address management challenges and the resources needed to achieve its goals . EPA also incorporated mechanisms to ensure leadership accountability for achieving results including numeric targets and time frames for each action identified in performance measures. Consequently, EPA has better assurance that its 2016-2020 grants management plan is an effective framework to guide and assess its efforts to meet its grants management goals.
Environmental Protection Agency The EPA Administrator should direct OGD to develop a timetable with milestones and identify and allocate resources for adopting electronic records management for all 10 regional offices.
Closed – Implemented
In August 2020, EPA began planning its transition from paper grant records to an electronic records management system for all 10 regional offices. According to EPA Grants Management Council documents, EPA regional and headquarters offices contributed resources to the system's development and established milestones and time frames for its implementation, which is consistent with our recommendation. In March 2021, EPA formally launched the new EPA Grant File Management system. According to EPA's assessment, the new system improves the access, and transparency of its grants records, as well as increasing the agency's efficiency managing grants. EPA projects that the new system will generate $2.29 million in avoided costs, such as printing and staff resources, over the next 10 years.
Environmental Protection Agency The EPA Administrator should direct OGD to implement plans for adopting an up-to-date and comprehensive IT system by 2017 that will provide accurate and timely data on agencywide compliance with grants management directives.
Closed – Implemented
In December 2020, EPA deployed a new, comprehensive web-based IT application, Next Generation Grants System (NGGS), which replaced its legacy grants management system. In April 2021, EPA officials told us that NGGS mirrors EPA's business grants process from application to close-out, in an up-to-date web-based format that is a significant improvement from its prior system based in Lotus Notes. According to these officials, the system was designed to increase EPA's efficiency by reducing the amount of time to award funding, increasing access to information for decision-making, streamlining internal processes and improving EPA's overall ability to manage grants. Additionally, EPA officials told us that NGGS is compatible with other EPA applications that pull grants information agencywide and provides a more effective system to monitor and respond to compliance and grants management activities. Although EPA did not meet the target date in our recommendation, the agency's adoption of a new, web-based IT application that comprehensively covers EPA's grants business cycle meets the intent of our recommendation.
Environmental Protection Agency Until the new IT system is implemented, the EPA Administrator should direct OGD to develop ways to more effectively use existing web-based tools to better monitor agencywide compliance with grants management directives.
Closed – Implemented
Partially in response to our recommendation, in January 2020, EPA's OGD had begun to migrate its grants administration and management functions to a web-based IT application, EPA's Next Generation Grants System and is on schedule to complete its implementation by December 2020. As part of this migration, OGD has built on its prior modernization efforts to transition its legacy database software into a more user-friendly web-based portal, to increase the accessibility of information and streamline processes. According to EPA officials, the IT application, in combination with other updated EPA web-based reporting tools, will provide a more effective IT system to monitor agencywide compliance. For example, as part of the new IT system, OGD has also expanded its data reporting capabilities for monitoring EPA's grants management efforts agencywide. As a result of these efforts, OGD has increased the accessibility and amount of agencywide grant management data available, which can help EPA better monitor its compliance with grants management directives.

Full Report

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Topics

Best practicesEnvironmental monitoringGrant administrationGrant monitoringGrants to statesInformation technologyInternal controlsPerformance measuresRegulatory agenciesReporting requirementsSchedule slippagesStrategic information systems planningStrategic planningUse of funds