Federal Grants Management Reforms

In the past 14 years, since the passage of P.L. 106-107, there has been a  series of legislative- and executive-sponsored initiatives aimed at  simplifying aspects of the grants management life cycle; minimizing the  administrative burden for grantees, particularly those that obtain grants  from multiple federal agencies; and ensuring accountability by improving  the transparency of the federal grants life cycle. Process Initiatives Helped Reform Aspects of the Grants Management Life Cycle, but Management and Coordination Challenges Could Hinder Further Progress

Since the passage of P.L. 106-107, OMB and other entities involved with  federal grants management have overseen several ongoing initiatives  intended to address the challenges grantees encounter throughout the  grants life cycle. These initiatives include consolidating and revising  grants management circulars, simplifying the pre-award phase, promoting  shared IT solutions for grants management, and improving the timeliness  of grant closeout and reducing undisbursed balances. However,  management and coordination challenges could hinder the progress of  some of these initiatives. Promoting Post-Award Shared Information Technology Solutions for Grants Management

Promoting shared information technology (IT) solutions for managing  grants—an original goal of P.L. However, it is unclear whether  promoting shared IT systems for grants management is still a priority, and  if so, which agency is in charge of this effort. Since 2012, there has been uncertainty regarding the status of and future  plans for the operational elements of what was the GMLOB. After receiving a draft  copy of this report for its review and comment, OMB issued a “Controller  Alert” on April 29, 2013, announcing that, for fiscal year 2013, the  Department of the Treasury’s Office of Financial Innovation and  Transformation (FIT) will serve as Managing Partner and the Program  Management Office for the FMLOB. In its April 29, 2013,  Controller Alert,  OMB stated that in accordance with OMB’s guidance on  shared services, the Treasury’s FIT will “lead efforts to transform federal  financial management, reduce costs, increase transparency, and improve  delivery of agencies’ missions by operating at scale, relying on common  standards, shared services, and using state-of-the-art technology.”  However, OMB’s Controller Alert did not address whether the roles of  NSF, HHS, and Education would change as a result of FIT’s leadership in  this area. 2. 3. Agency officials involved with current grants management reforms told us  that the roles and responsibilities for various streamlining initiatives are  not always clear. Members of the grantee community told us they continue to have  concerns because they do not see a role for themselves as OMB and  COFAR develop priorities for reforming federal grants management. Although COFAR  recently identified some priorities, it has not yet released to the public an  implementation plan that includes performance targets, mechanisms to  monitor, evaluate, and report on progress made towards stated goals,  and goal leaders who can be held accountable for those goals. Although  OMB officials provided us with some additional and updated information  in their comment letter that we were unable to assess or validate, they  agreed with our recommendations that OMB and COFAR need to  develop an implementation schedule and mechanisms to monitor,  evaluate and report on results, clarify roles and responsibilities for the  various streamlining initiatives and engagement with federal stakeholders,  and develop an effective two-way communication strategy that includes  the grant recipient community. To  accomplish this, we reviewed (1) what the Office of Management and  Budget (OMB) and other federal grants governance bodies have done  since the passage of P.L. 106-107 in 1999 to reform grants management  processes and reduce unnecessary burdens on applicants, grantees, and  federal agencies; and (2) what actions, if any, have been taken to  address what we have found to be persistent management challenges,  such as the lack of a comprehensive plan for implementing reforms,  confusion over roles and responsibilities among grants governance  bodies, and inconsistent two-way communication with stakeholders. We also reviewed action plans created by former and current interagency  councils with responsibility for overseeing grants management reforms,  as well as our previous work and other literature on grants management  initiatives and the related challenges that have undermined the  government’s ability to simplify grants management processes, reduce  unnecessary burden on applicants, grantees, and federal agencies, and  improve delivery of services to the public. We also reviewed our previous  work on collaborative mechanisms and management consolidation  efforts. OMB replaced the GPC in 2011 with the Council  on Financial Assistance Reform (COFAR). OMB charged  COFAR with identifying emerging issues, challenges, and opportunities  in grants management and policy and providing recommendations to  OMB on policies and actions to improve grants administration. It provided a number of strategies  such as establishing annual performance targets for timely grant close  out.
Why GAO Did This Study

GAO has previously identified several management challenges that have hindered grants management reform efforts. GAO was asked to review recent federal grants management reform efforts. GAO reviewed (1) what OMB and other federal grants governance bodies have done since the passage of P.L. 106-107 to reform grants management processes, and (2) what actions, if any, have been taken to address what GAO has found to be persistent management challenges. GAO reviewed relevant legislation, OMB circulars and guidance, action plans of interagency councils responsible for overseeing grants management reforms, and previous GAO work and other literature on grants management reforms. GAO also reviewed its previous work on collaborative mechanisms and management consolidation efforts. GAO also interviewed officials from OMB, grant-making agencies, and associations representing a variety of grantee types.

What GAO Found

In the past 14 years, since the passage of the Federal Financial Assistance Management Improvement Act of 1999 (P.L. 106-107), there has been a series of legislative- and executive-sponsored initiatives aimed at reforming aspects of the grants management life cycle. Recently, a new grants reform governance body, the Council on Financial Assistance Reform (COFAR), replaced two former federal boards--the Grants Policy Committee (GPC) and Grants Executive Board (GEB). The Office of Management and Budget (OMB) created COFAR and charged it with identifying emerging issues, challenges, and opportunities in grants management and policy and providing recommendations to OMB on policies and actions to improve grants administration.
In addition to this new governance structure, OMB and other entities involved with federal grants management are overseeing several ongoing reform initiatives intended to address the challenges grantees encounter throughout the grants life cycle. These initiatives include consolidating and revising grants management circulars, simplifying the pre-award phase, promoting shared information technology (IT) solutions such as the development of shared end-to-end grants management systems, and improving the timeliness of grant close out and reducing undisbursed balances. Management and coordination challenges could hinder the progress of some of these initiatives. For example, although promoting shared IT solutions for grants management--an original goal of P.L. 106-107--remains a priority, there has been uncertainty regarding the status of this initiative and future plans for it. The lead agency for this initiative changed several times since 2012, and it has been unclear at times whether promoting shared IT systems for grants management would continue to be a priority, and if so, which agency was in charge. After receiving GAO's draft report for review, OMB issued a "Controller Alert" on April 29, 2013, announcing that the Department of the Treasury would lead efforts to transform federal financial management by, among other things, relying on common standards, shared services, and using state-of-the-art technology.
Although COFAR has recently identified several high-level priority goals for 2013 through 2015, it faces some of the same management challenges identified in previous GAO reports on grants management, such as the lack of a comprehensive plan for implementing reforms, confusion over roles and responsibilities among grants governance bodies, and inconsistent communication and outreach to the grantee community. COFAR has not yet released to the public an implementation plan that includes key elements such as performance targets and goal leaders for each goal, and mechanisms to monitor, evaluate, and report on progress made toward stated goals. Furthermore, agencies involved with current grants management reforms are not always clear on their roles and responsibilities for various streamlining initiatives which may cause such initiatives to languish. Finally, GAO found that members of the grant recipient community continue to voice concern because they do not see a role for themselves as OMB and COFAR develop priorities for reforming federal grants management. In the comments it provided on April 29, 2013, OMB described actions it is taking to address these challenges, such as using a more detailed project plan internally and scheduling outreach events with federal partners and members of the grantee community.

What GAO Recommends

GAO recommends that the Director of OMB: (1) develop and make publiclyavailable an implementation schedule that includes performance targets, goal leaders who can be held accountable for each goal, and mechanisms to monitor, evaluate, and report on results; (2) clarify the roles and responsibilities for various streamlining initiatives; and (3) develop an effective two-way communication strategy with relevant stakeholders. OMB generally concurred with our recommendations and provided additional and updated information, which was incorporated into the report as appropriate.