Managing Partner Agency. HHS is also responsible for  managing Grants.gov as an information technology (IT) investment  through HHS’s Office of the Chief Information Officer (OCIO). Grants.gov Funding Model Raises Issues about How Costs Are Distributed among Users and the Lack of Effective Strategies to Manage Recurring Collection Delays

		Grants.gov’s Funding Model Attempts to Better Align Contributions with Agency Use

In keeping with OMB’s expectation for legacy E-Gov initiatives to move  toward a fee-for-service model, starting with the fiscal year 2010 budget,  the Grants Executive Board (GEB) approved changes to the Grants.gov  contribution calculation to better reflect agencies’ use of Grants.gov’s  services. The Grants.gov Contribution Calculation Results in Different Contribution Amounts for Agencies with Similar System Use

The Grants.gov contribution calculation results in different contribution  amounts for agencies with similar usage profiles. For example, under the  fiscal year 2011 contribution calculation, the Department of Housing and  Urban Development (categorized as a large agency for the purposes of  Grants.gov) posted 40 grant opportunities, received 4,817 applications  through the Grants.gov Web site, and paid $414,422. However, the National  Endowment for the Humanities (categorized as a small agency for the  purposes of Grants.gov) posted 42 grant opportunities, received 4,577  applications through the Web site, and paid $155,159. NEH’s agency size component is $50,000; HUD’s is  $200,000. Grants.gov Does Not Track and Report on Certain Key Costs and Does Not Charge Agencies for All Known Costs

The Grants.gov PMO tracks costs for internal management purposes to  ensure contract compliance and that program activities stay within GEB  approved funding levels; however, it does not report costs by key program  activities to its partner agencies, and it does not track or report on costs  attributable to each partner agency. The type of cost tracking in our case study initiatives varied. They are: (1) depositing partner fees/contributions into multiyear  appropriation accounts and (2) receiving some form of funds from their  managing partners until partner agency contributions become available. Accountability and Responsibility for Grants.gov Performance among the Grants.gov Governance Entities Remains Unclear

Grants.gov continues to experience persistent governance challenges,  including unclear roles and responsibilities among the governance entities,  a lack of key performance metrics, and communication with stakeholders. Since we first reported on these issues in July 2009, some progress has  been made in these areas. Unclear Roles and Responsibilities. As we previously reported, the  GEB and HHS’s OCIO share responsibility for reviewing and approving  major changes to, and funding for, the Grants.gov system. Key System Performance Measures. Communication with Partner Agencies. HHS provides partner agencies  with feedback opportunities but does not communicate some key  performance and cost information. The new body would report directly to  OMB and would serve as the federal grants advisory body responsible for  establishing the direction for and coordinating all governmentwide grants  initiatives, including Grants.gov. As a preliminary, high-level concept document, it is understandable that  the proposal does not flesh out details as to how the framework would be  implemented, but it lacks even a high-level overview of several critical  elements. HHS’s written  comments are reprinted in appendix V. Key comments include that HHS  “is proud of the significant progress made since the government-wide  “Boost” to enhance system capacity, performance, and ensure the public  has reliable access to a central portal to find and apply for federal  assistance opportunities.”  HHS also stated that “long term strategic  planning as well as short term operations including acquisition activities  … are hampered by the uncertainties associated with the level of funding  and schedule of funding availability” and “if a “Fee for Service” model is  not adopted and Grants.gov remains tied to the E-Gov Benefit Report, HHS  recommends federal grant policy be changed to require OMB transmit the  E-Gov Benefits report to Congress by December 1st.”  In regards to  governance issues, HHS “appreciates the work of the Grants Governance  Taskforce in supporting the Grants.gov PMO and recommending  governance changes, and hopes that OMB will soon make its final  determination on the federal grants governance framework.”  We agree  that delayed funding poses a serious risk to Grants.gov's operations. Appendix I: Objectives, Scope, and Methodology

To examine the Grants.gov system and make recommendations to improve  system management, we evaluated (1) key factors the Department of  Health and Human Services (HHS) should consider when proposing a  funding model for Grants.gov and (2) how the Grants.gov governance  bodies could address Grants.gov’s previously identified governance  challenges. To address both objectives, we gathered and reviewed reports  and documentary evidence from the Office of Management and Budget  (OMB), the Grants.gov Program Management Office (PMO), and the  Grants Executive Board (GEB). Specifically, we analyzed the relationship between the agency  size designation and other measures of system use. Each agency’s contribution is calculated using four measures of system  usage.
Why GAO Did This Study

In response to the Federal Financial Assistance Management Improvement Act of 1999, the Office of Management and Budget (OMB), among other things, deployed Grants.gov as the central grant identification and application portal for federal grant programs in 2003 and named the Department of Health and Human Services (HHS) its managing partner. As a result of funding and governance challenges-- such as untimely contributions, a lack of performance metrics, unclear lines of authority, and confusion over roles and responsibilities among Grants.gov's governance bodies-- that have adversely affected operations, GAO is required to examine (1) key factors HHS should consider when proposing a funding model for Grants.gov, and (2) how the Grants.gov governance bodies could address Grants.gov's previously identified governance challenges. To do this, GAO analyzed agency documents and interviewed officials at HHS, OMB, the Grants Executive Board (GEB), three case study agencies that manage similar E-Gov initiatives and three Grants.gov partner agencies.

What GAO Found

In keeping with OMB's expectation to move toward a fee-for-service model, starting with the fiscal year 2010 budget, the Grants.gov contribution calculation changed to better reflect agencies' use of Grants.gov's services. However, GAO found that the calculation results in different contribution amounts for agencies with similar usage profiles because the calculation includes a measure of agency size that does not correlate well with an agency's use of Grants.gov. For example, usage data for the fiscal year 2011 contributions indicates that the Department of Housing and Urban Development (HUD, a large agency) posted 40 grant opportunities and received 4,817 applications through the Grants.gov Web site while the National Endowment for the Humanities (NEH, a small agency) posted 42 opportunities and received 4,577 applications. However, HUD's contribution is $414,422 while NEH's is $155,159. In addition, GAO found that the Grants.gov Program Management Office (PMO) does not track and report on certain key costs, limiting partner agencies' ability to understand the relationship between services received and amounts paid for that service. Grants.gov also does not charge partner agencies for all known costs, which can result in some agencies subsidizing other agencies' use of the system. Finally, Grants.gov continues to suffer from untimely agency contributions. While the other EGov initiatives GAO spoke with report similar challenges, some take mitigating steps that aid them in managing delays. They are: (1) depositing partner fees/contributions into multiyear appropriation accounts and (2) receiving some form of funds from their managing partners until partner agency contributions become available. Accountability and responsibility for Grants.gov performance among its governance bodies--the PMO, GEB and HHS's Office of the Chief Information Officer (OCIO)--remains unclear. Since GAO first reported on these issues in July 2009, some progress has been made clarifying roles and responsibilities, developing performance measures to track important aspects of system performance, and providing partner agencies with key performance and cost information. However, although the GEB and the OCIO continue to share responsibility for approving major changes to, and funding for, the Grants.gov system, there remains little evidence that the GEB-approved funding for Grants.gov is considered in HHS's review of Grants.gov as an IT investment as required by OMB guidance. In addition, Grants.gov's performance measures have not changed since GAO reported on them and still do not provide a clear picture of system performance. Finally, Grants.gov does not communicate some key performance and activity cost information with its partner agencies. A new federal grants governance model under OMB review would merge various Grants.gov governance entities and serve as the federal grants advisory body responsible for establishing the direction for and coordinating all governmentwide grants initiatives, including Grants.gov. As a preliminary, concept document, it is understandable that it contains few implementation details; however, the proposal lacks even an overview of several critical elements, such as how grants initiatives would be managed as IT investments.

What GAO Recommends

GAO is making four recommendations to HHS aimed at improving Grants.gov's funding calculation, cost tracking, and annual and strategic plan; and knowledgesharing with other E-Gov initiatives. HHS generally agreed with our findings and recommendations.