Clearly, this limits the extent to  which federal agencies can oversee grantee performance. Nonfinancial mechanisms would include altered oversight or flexibility. Accountability Provisions Can Be Employed at Different Phases of the Grant Life Cycle

Accountability mechanisms can be used in different phases of the grant  life cycle by different actors, including Congress, granting agencies, and  grantees themselves, and the lessons learned from one grant cycle can be  used to improve a performance accountability mechanism in the next (see  fig. Accountability Mechanisms Can Be Tailored to Specific Situations

Selecting appropriate performance measures and linking them to  performance accountability mechanisms is not a one-size-fits-all process;  rather, accountability provisions are tailored to reflect the program’s  characteristics. Strategies Support Successful Selection, Design, and Implementation of Performance Accountability Mechanisms

Collectively, five key strategies appear to facilitate the effective selection,  design, and implementation of performance accountability mechanisms. These strategies are    ensure mechanisms are of sufficient value,    periodically renegotiate and revise mechanisms,    ensure appropriate measurement selection and usage,    ensure grantor and grantee technical capacity, and  implement system in stages. In addition to these strategies, we noted extensive use of partnerships and  collaborations and regular and effective oversight and feedback, which  appeared critical to the success of accountability provisions in a third- party environment. In addition, the  use of national program evaluation studies and research and  demonstration grants can provide valuable information to assist in agency  and congressional oversight of and knowledge about accountability  mechanisms. OMB recognized the value in sharing information on  performance accountability mechanisms, but has not yet focused on this  issue. Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to identify (1) the challenges to  performance accountability in grants; (2) the kinds of mechanisms that are  being used to improve grant performance and how; and (3) given the  findings of questions 1 and 2, what strategies the federal government can  use to encourage the use of these mechanisms, as appropriate. To illustrate the mechanisms and strategies identified through our content  analysis, we used relevant case examples found in the literature. To  further illustrate the mechanisms and design and implementation  strategies, we also selected four additional case illustrations—two federal  grant programs and two nonfederal contract cases. How Federal Programs Use Outcome  Information: Opportunities for Federal Managers. 5, no.
Why GAO Did This Study

Maximizing the extent to which grants achieve their long-term performance goals is critical to successfully addressing the challenges of the 21st century. While performance accountability mechanisms are fairly new to federal grants, they have been used in contracts for some time and lessons learned have begun to inform federal grant design. Given this, GAO was asked to examine (1) challenges to performance accountability in federal grants, (2) mechanisms being used to improve grant performance, and (3) strategies the federal government can use to encourage the use of these mechanisms. GAO performed a content analysis of relevant literature and interviewed experts. To illustrate the mechanisms and strategies found in the literature, GAO used examples from the literature and selected additional case illustrations--two federal grant programs (vocational education and child support enforcement) and two nonfederal contracts--for further study.

What GAO Found

Accountability provisions in federal grants can vary widely. They can be financial (e.g., bonus payments) or nonfinancial (e.g., altered oversight or flexibility), and can be employed by various actors at different stages in the grant life cycle. Mechanisms need to be tailored to specific situations since there is no "one-size-fits-all" solution. Collectively, five key strategies appear to facilitate the effective design and implementation of performance accountability mechanisms. They are as follows: 1. ensure mechanisms are of sufficient value to motivate desired behaviors, 2. periodically renegotiate and revise mechanisms and measures, 3. ensure appropriate measurement selection, 4. ensure grantor and grantee technical capacity, and 5. allow for phased implementation. In addition to these strategies, collaboration, oversight, and feedback also appear critical to the success of performance accountability mechanisms. Opportunities exist to improve the design and implementation of federal grants. A results-focused design can enable and facilitate the use of accountability provisions. National program evaluation studies and demonstration grants can provide valuable information to support oversight of and knowledge about accountability mechanisms. Finally, the Office of Management and Budget (OMB), agencies, and grantees can benefit from sharing good practices and lessons learned regarding performance accountability provisions. OMB recognized the value in sharing information on performance accountability mechanisms, but has not yet focused on this issue.