1). OMB’s Uniform Guidance  establishes several requirements for competitive grant awards, including  that federal awarding agencies: (1) notify the public of the grant  opportunity through an announcement, or public notice, which includes  providing the applicant with sufficient information to help them make a  decision about whether to submit an application and the criteria used to  evaluate the application; (2) establish a merit-review process for  competitive grants; and (3) develop a framework for risk assessment of  applicants for competitive grants. 2). The Uniform Guidance directs that  agencies disclose in their public notice the relative weights or point values  assigned to the merit based criteria, providing applicants with information  about how the criteria will be applied. Council on Financial Assistance Reform

In 2011, OMB created COFAR, an interagency council charged with  providing policy-level leadership for the grants community and  implementing reforms to improve the effectiveness and efficiency of  federal grants. 3). The Extent to Which Selected Subagencies Followed Certain Required and Recommended Practices for Evaluating Competitive Grant Awards Varied

		Most Selected Subagencies Included Evaluation Criteria and Related Scoring in Their Merit-Review Process, but the Selected Interior Subagencies Did Not

The Uniform Guidance gives agencies flexibility to design their merit- review process but states that all criteria used to influence final award  decisions should be clarified in the public notice for applicants, and public  notices should include the relative weights the agency will apply to these  criteria. In contrast, the public notices for grant programs at the two selected  Interior subagencies discussed cost sharing and matching but did not  clarify when or how this factor would influence the subagency’s final grant  award decisions. While OMB’s Uniform Guidance does not direct agencies to review  applicants for duplicative or overlapping funding, federal standards for  internal control state that management should use quality information to  achieve objectives, including relevant data from reliable internal and  external sources. Internal control standards also state that management  should document its policies. However, our previous  work has pointed to potential risks that can arise—such as awarding  duplicative grants—when agencies do not have written guidance in place  to direct staff to check for duplication when making competitive award  decisions. Two Selected Subagencies Had Guidance and a Formal Process to Identify Potential Duplication and Overlap of Grant Funding

We found that two of the selected subagencies in our review, NIH within  HHS, and NIFA within USDA, had guidance in place instructing grant  management staff to review applicants for potential duplication and  overlap prior to making a grant award. Four Selected Subagencies Rely Primarily on Informal Processes for Identifying Potential Duplication and Overlap in Grant Funding

Four of the six selected subagencies we reviewed relied on informal  mechanisms to identify duplication and overlap of grant funding rather  than establish guidance for a formal process, but officials from these  subagencies acknowledged the importance of trying to identify potentially  duplicative and overlapping grant funding. COFAR Has Updated Its Priorities but Has Made Limited Progress in Planning, Coordination, and Communication

COFAR has made limited progress in developing an implementation  schedule for achieving its priorities, articulating roles and responsibilities  for its council members, and developing a strategy for communicating  with stakeholders as we recommended in 2013. We recommended that the director of OMB, along with  COFAR, develop and make publicly available an implementation  schedule of the COFAR priorities, clarify roles and responsibilities for  COFAR members, and improve efforts to develop an effective two-way  communication strategy with the grant recipient community. Although COFAR released its updated priorities for fiscal years 2016  through 2017, it continues to face the same challenges that we identified  in our 2013 report. We interviewed officials from associations representing the grantee  community, state and local governments, universities, and nonprofit  recipients about their two-way communication with COFAR or FACE. Achievement of these objectives is in part dependent on  effective implementation of merit-based processes for grantee selection. In 2013, we identified certain challenges related to COFAR’s priorities  and its lack of an implementation schedule. To improve transparency in the grant merit-review process, we  recommend that the Secretary of the Department of the Interior direct  the Fish and Wildlife Service to issue written guidance to require all  competitive grant programs to clarify in the public notice of funding  opportunity all review criteria, including cost sharing factors as  relevant, and their related scores to be used to make final award  decisions. 2. 3. 4. All the agencies agreed with the  recommendations made to them. We are sending copies of this report to the heads of the Departments of  Health and Human Services, Interior, Agriculture and OMB, as well as  interested congressional committees and other interested parties. To establish a competitive grants program to provide  funding for fundamental and applied research,  extension, and education to address food and  agricultural sciences.
Why GAO Did This Study

To improve the effectiveness and efficiency of grant-making in the federal government, in 2011 OMB created COFAR, and in 2014 OMB's Uniform Guidance came into effect. This included requirements for federal agencies to establish a merit-based review process for competitive grants and to assess grant applicants' risk. GAO was asked to review the design and implementation of merit-based grant award selection.
GAO reviewed the extent to which (1) selected subagencies followed certain required and recommended practices for evaluating competitive awards; (2) selected subagencies had processes to identify duplicative grant funding; and (3) COFAR has made progress in developing an implementation schedule for achieving its priorities. GAO assessed OMB and agency grant guidance for 19 grant programs at 6 subagencies—selected in part based on grant outlays in fiscal year 2014—and interviewed officials from these agencies and OMB as well as from associations representing different types of grantees. GAO's findings are not generalizable.

What GAO Found

GAO found that all 6 selected subagencies in the Departments of the Interior (Interior), Health and Human Services (HHS), and Agriculture (USDA) applied a risk assessment review before making final grant award decisions for the 19 grant programs examined, as required by the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). GAO also found that while selected HHS and USDA subagencies generally followed certain other required and recommended practices established in the Uniform Guidance for providing specific information in their notices of public funding opportunity (public notices) announcing grants, selected Interior subagencies did not. Specifically, the Uniform Guidance recommends that public notices include (1) the merit-based criteria that will be used to assess grant applications, (2) the relative weights that will be applied to those assessment criteria, and requires (3) whether and how cost sharing will be used as a factor in assessing an application. GAO found that for several grant programs in selected Interior subagencies, public notices either did not state merit-based selection criteria, did not state the relative weights assigned to selection criteria, or did not clarify how cost sharing would be used to assess an application. Omitting this information from the public notices limits transparency for potential applicants.
OMB's Uniform Guidance does not direct agencies to review applicants for duplicative funding, but federal standards for internal control state that management should use quality information to achieve objectives and that management should document its policies. GAO found that only 2 of the 6 selected subagencies (1 in HHS and 1 in USDA) had developed formal processes and guidance for identifying potentially duplicative funding. GAO's previous work has pointed to potential risks that can arise—such as awarding duplicative grants—when agencies do not have guidance in place to direct staff to check for duplication when making competitive award decisions. Officials from the other 4 subagencies (in HHS, USDA, and Interior) that relied primarily on informal processes for identifying potentially duplicative grant funding acknowledged the importance of identifying information about applicants' other funding before making final grant award decisions.
The Council on Financial Assistance Reform (COFAR) updated its priorities for fiscal year 2016 but has made limited progress in planning, coordinating, and communicating its priorities. COFAR is an interagency council established by OMB to provide policy-level leadership for the grants community and to support reforms to improve the effectiveness and efficiency of federal grants. In 2013, GAO identified challenges related to COFAR's priorities and its lack of a plan to achieve implementation of these priorities and GAO recommended that OMB provide an implementation schedule for COFAR, clarify roles and responsibilities of COFAR members, and improve two-way communication with stakeholders. However, in this review GAO found that COFAR's challenges remain and it has still not (1) released an implementation schedule that includes performance targets and evaluation mechanisms; (2) established roles and responsibilities for its members; or (3) made progress in developing effective two-way communication with the grant recipient community and other stakeholders.

What GAO Recommends

GAO is making four recommendations to address the concerns identified at the specific subagencies, such as including required and recommended information in public notices for grant opportunities and developing guidance on reviewing applicants for potentially duplicative funding. All agencies agreed with the recommendations.