Four Key Grants Management Challenges Persist despite EPA’s Past Efforts to Address Them

We identified four key challenges that EPA continues to face in managing  its grants despite efforts to address them. These challenges are (1)  selecting the most qualified grant applicants, (2) effectively overseeing  grantees, (3) measuring the results of grants, and (4) effectively managing  grant staff and resources. In recent years, EPA took a series of actions to  address these challenges by, among other things, issuing policies on  competition and oversight, conducting training for project officers and  nonprofit organizations, and developing a new data system for grants  management. However, these actions had mixed results because of the  complexity of the problems, weaknesses in design and implementation,  and insufficient management attention. Similarly, EPA’s new oversight policy should increase the agency’s  monitoring of individual grantees, but it does not enable the agency to  identify and address systemic problems. New Plan Focuses on the Four Major Management Challenges but Will Require Strengthening, Sustained Commitment, and Enhanced Accountability

According to EPA’s Assistant Administrator for Administration and  Resources Management, the agency’s April 2003 5-year grants management  plan is the most critical component of EPA’s efforts to improve its grants  management. For example,  The Robert Wood Johnson Foundation conducts preaward desk reviews  of some applicants to learn about the organization and assess its fiscal  health. Conclusions

If EPA is to better achieve its environmental mission, it must more  effectively manage its grants programs—which account for more than half  of its annual budget. Furthermore, to strengthen EPA’s efforts  we recommend   incorporating appropriate statistical techniques in selecting grantees for   requiring EPA staff to use a standard reporting format for in-depth  reviews so that the results can be entered into the grant databases and  analyzed agencywide;   developing a plan, including modifications to the grantee compliance  database, to use data from its various oversight efforts—in-depth  reviews, significant actions, corrective actions taken, and other  compliance information—to fully identify systemic problems, inform  grants management officials of areas that need to be addressed, and  take corrective action as needed;      modifying its in-depth review protocols to include questions on the  status of grantees’ progress in measuring and achieving environmental  outcomes;   incorporating accountability for grants management responsibilities  through performance standards that address grants management for all  managers and staff in headquarters and the regions responsible for  grants management and holding managers and staff accountable for  meeting these standards; and  evaluating the promising practices identified in this report and  implementing those that could potentially improve EPA grants  management. Objectives, Scope, and Methodology

This appendix details the methods we used to determine the (1) major  challenges the Environmental Protection Agency (EPA) faces in managing  its grants and how it has addressed these challenges in the past, (2) extent  to which EPA’s recently issued policies and grants management plan  address these challenges, and (3) promising practices, if any, that could  assist EPA in addressing these challenges.
Why GAO Did This Study

The Environmental Protection Agency (EPA) has long faced problems managing its grants, which constitute over one-half of the agency's annual budget, or about $4 billion. EPA uses grants to implement its programs to protect human health and the environment and awards grants to thousands of recipients, including state and local governments, tribes, universities, and nonprofit organizations. EPA's ability to efficiently and effectively accomplish its mission largely depends on how well it manages its grant resources. As requested, GAO determined (1) major challenges EPA faces in managing its grants and how it has addressed these challenges in the past, (2) extent to which EPA's recently issued policies and grants management plan address these challenges, and (3) promising practices, if any, that could assist EPA in addressing these challenges.

What GAO Found

EPA continues to face four key management challenges, despite past efforts to address them. These challenges are (1) selecting the most qualified applicants, (2) effectively overseeing grantees, (3) measuring the results of grants, and (4) effectively managing grants staff and resources. In recent years, EPA has taken a series of actions to address these challenges by, among other things, issuing policies, conducting training, and developing a new data system for grants management. However, these past actions had mixed results because of the complexity of the problems, weaknesses in design and implementation, and insufficient management emphasis. EPA's 2002 competition and oversight policies and 2003 grants management plan focus on the major challenges GAO identified, but will require strengthening, enhanced accountability, and a sustained commitment to succeed. For example, EPA's new oversight policy mandates more in-depth monitoring of grantees but it does not build in a process for analyzing the results of the in-depth monitoring to address systemic grantee problems. Such analysis could better target EPA's oversight efforts. In addition, its 5-year grants management plan does offer, for the first time, a comprehensive road map with objectives, goals, and milestones for addressing grants management challenges. However, the plan does not completely address how EPA will hold all managers and staff accountable for successfully fulfilling their management responsibilities. Therefore, EPA cannot ensure the sustained commitment required for the plan's success. Although information on promising grants management practices is limited, the federal agencies and other organizations GAO contacted identified some practices for each of EPA's four major challenges that may further assist EPA in improving its grants management. For example, one federal agency takes into account applicants' potential to achieve results when selecting grantees. A private foundation conducts preaward reviews of some applicants to learn about the organization and assess its fiscal health. In addition, GAO has developed a guide for federal agencies to use to hold managers and staff accountable for achieving desired agency results. This guide could be useful in helping EPA ensure accountability for grants management performance.