These principal offices generally focus on specific areas of education,  such as career, technical, and adult education; elementary and secondary  education; or postsecondary education. In fiscal year 2015, Education awarded about  $4.3 billion in discretionary grants across its seven principal offices (see  table 1). For  example, all grant files should include the following three key documents:  grant award notifications, post-award conference records, and grantee  performance reports. Official Grant Files for About $21 Million in Selected Discretionary Grants Lacked Complete Documentation of Grantee Performance, and Education Has No Written Grant File Supervisory Review Procedures

		Official Grant Files We Reviewed Did Not Consistently Contain Key Monitoring Documenation

The sample of official grant files we reviewed did not consistently contain  documentation of certain key required monitoring activities outlined in  Education’s Handbook. Federal internal  control standards state that entities should provide continuous  supervision to provide reasonable assurance that internal control  objectives are achieved, and that internal control activities and  transactions be clearly documented. Written procedures that detail requirements  for the supervisory review of official grant files could enhance Education’s  ability to hold grant staff supervisors accountable for ensuring their grant  staff adhere to the monitoring and documentation requirements and help  the department be better positioned to ensure proper stewardship of its  federal discretionary grants. Education Created a Way to Identify and Share Grantee Performance Information Internally, but Has Not Developed Guidance to Help Ensure Its Effective Use by Grant Staff

Education developed features within G5 that allow grant staff to  systematically maintain, organize, identify, and share information about  grants and grantees in a central location. In 2013, Education spent about  $700,000 to develop the G5 Post-Award Monitoring (PAM) Module,  according to officials with whom we spoke. Specifically, since the PAM Module was implemented in 2013,  RMS officials said grant staff have been inconsistently interpreting key  terminology like “issues” and “notable results.” While RMS officials said  they offer grant staff training on the PAM Module, due to competing  priorities, they have not developed guidance to clarify what information  grant staff should enter into the PAM Module related to the “Issues” and  “Notable Results” tabs, specifically, nor circumstances under which using  the PAM Module might be an effective means to share information. Federal internal control standards state that pertinent information should  be identified, captured, and distributed in a form and time frame that  permits people to perform their duties efficiently. Without guidance to  help grant staff enter consistent information about grantee performance  across Education’s principal and program offices, RMS may not be able  to realize the full potential of its grants management system. Conclusions

The Department of Education’s more than 80 discretionary grant  programs are one of the foundational tools for achieving its mission of  increasing student achievement. Absent detailed written procedures for the supervisory review of  official grant files, these issues may persist. As Education continues to  move toward agency-wide adoption of its electronic G5 grants  administration system, using a centralized approach, such as G5’s PAM  Module, to gather this information could provide Education opportunities  to share information about grantee performance across programs and  offices. Such guidance may better position  Education to achieve the full potential benefits of its grants management  system. Recommendations for Executive Action

To enhance its oversight of discretionary grantee performance, the  Secretary of Education should direct RMS to work with principal offices,  as appropriate, to:
Establish and implement detailed written supervisory review  procedures for official grant files to provide reasonable assurance that  grant staff perform and document key monitoring activities. Develop guidance for grant staff on using the PAM Module to share  information on grantee performance. In its comments,  Education substantially agreed with both of our recommendations and  provided additional technical comments and clarifications, which we have  incorporated, as appropriate. Among other things, Education reported that  it will (1) establish a standard operating procedure for grant file reviews,  including a protocol for the review of these files to ensure that monitoring  efforts are documented appropriately; and (2) reinforce through grant  administration trainings the importance of sharing grantee performance  information agency-wide, including in the PAM Module. In commenting on our finding about the extent to which grant staff  consistently applied discretionary grant monitoring policies, Education  focused much of its attention on the 58 performance reports we  determined were missing from the official grant files we reviewed, and  which were associated with about $21 million in discretionary grant  awards.
Why GAO Did This Study

In fiscal year 2015, Education awarded more than $4 billion to over 7,000 grantees through some 80 discretionary grant programs. Over the past decade, GAO and Education's Inspector General identified various grants management and oversight challenges, including effectively monitoring grantee performance. GAO was asked to examine Education's oversight of its discretionary grants.
This report examines the extent to which Education: (1) consistently applied its discretionary grant monitoring policies, and (2) identified and shared across the department information about the performance of discretionary grantees. GAO reviewed the grant monitoring practices of three of Education's seven principal offices, which together awarded more than 80 percent of discretionary grant funds in fiscal year 2015, according to GAO's review of Education data, the most recent data available. Additionally, GAO reviewed a randomly selected, nongeneralizable sample of 75 official grant files; analyzed federal and Education grants policies and procedures; and interviewed Education grant officials and nine randomly selected grantees.

What GAO Found

U.S. Department of Education (Education) grant staff did not consistently document in the official grant files key required monitoring activities, according to GAO's review of a nongeneralizable sample of 75 discretionary grants. As a result, about $21 million in discretionary grant funds lacked correct documentation of grantee performance in the official grant files GAO reviewed. Specifically, compared to Education's requirements for these files, almost all—69 of 75—were incomplete in terms of certain key documents (i.e., grant award notifications, post-award conference records, and annual performance reports) that should have been contained in them (see figure). Further, the three principal offices GAO reviewed—the Offices of Postsecondary Education, Elementary and Secondary Education, and Innovation and Improvement—have not established detailed written procedures for the supervisory review of official grant files, contrary to federal internal control standards, which call for entities to provide reasonable assurance that internal control objectives, such as grant monitoring, are achieved and clearly documented. By developing and implementing detailed supervisory review procedures for official grant files, Education would be better positioned to ensure the proper stewardship of its discretionary grants.
Education spent about $700,000 to develop features within the Post-Award Monitoring (PAM) Module of its grants management system that allow staff to, for example, identify and share performance information to a central location, but it has not developed guidance on its effective use by grant staff working across programs and offices. Education described several ways staff share performance information, but according to a review of official grant files and interviews with Education officials, GAO found that staff rarely used PAM to disseminate information about grantee performance, such as notable results achieved in specific grant projects. Additionally, while Education officials said they offer staff training on PAM, they have not developed guidance to clarify use of features related to grantee performance. Federal internal control standards call for pertinent information, such as grantee performance information, to be identified, captured, and distributed in a form and time frame that permits people to perform their duties efficiently. Absent guidance on how to effectively use PAM Module features to share information about grantee performance, Education will likely not be able to achieve the full potential benefits of its grants management system.

What GAO Recommends

GAO recommends Education establish and implement detailed written supervisory review procedures for official grant files and develop guidance for grant staff on using the PAM Module to share information. Education substantially agreed with both recommendations and described the procedures and training it will provide to implement them.