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entitled 'Grants Management: Grantees' Concerns with Efforts to
Streamline and simplify Processes' which was released on July 28, 2006.
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
July 2006:
Grants Management:
Grantees' Concerns with Efforts to Streamline and Simplify Processes:
Grantee Views on Grant Streamlining:
GAO-06-566:
GAO Highlights:
Highlights of GAO-06-566, a report to congressional committees
Why GAO Did This Study:
At least 26 federal entities distribute grants, often with differing
administrative requirements. As a result, grantees may be diverting
resources from program objectives to comply with varying administrative
requirements. Congress, attempting to reduce this inefficiency, passed
the Federal Financial Assistance Management Improvement Act of 1999,
commonly referred to as P.L. 106-107. It required the Office of
Management and Budget (OMB) to ensure that agencies streamline
processes, develop common systems, and consult with grantees; it also
required GAO to evaluate the law’s effectiveness. In response, this
report discusses aspects of grant administration that grantees
identified as inadequate to meet the act’s goals and on which further
action was needed. GAO reviewed grantee comments on changes needed,
obtained views from grantee associations and users of the Web portal
called Grants.gov, performed detailed site visits at selected grantees,
and obtained views of OMB.
What GAO Found:
While some progress has been made since GAO issued its report last year
on interagency reform initiatives (GAO-05-355), federal grantees
continue to identify areas where the goals of P.L. 106-107 have not yet
been met. These include continued lack of standardization and continued
inefficiencies in grant administration across agencies and
technological difficulties with implementing Grants.gov, the Web site
where grantees can find and apply for grants. Grantees report they
continue to need to use different application, reporting, and payment
systems, and definitions differ across agencies. Further, some
inefficiencies continue to exist, such as agency grant processes not
aligning with typical grantee business practices. In addition, problems
using Grants.gov, such as search engine problems and complex
registration practices, have caused grantees frustration as they have
used the site for identifying and applying for grant opportunities. The
Grants.gov Program Management Office has taken actions to address some
of these problems and has plans for further improvements.
Figure: Examples of Grantee Concerns Related to P.L. 106-107 Goals:
[See PDF for Image]
Source: GAO.
[End of Figure]
Grantees GAO interviewed were concerned that, while the three federal
cross-agency initiatives underway to streamline grant
administration—Grants.gov, the Grants Management Line of Business, and
the cross-agency workgroups—were moving forward, progress to date has
been inadequate. Grantees identified two specific areas where the
management of P.L. 106-107 initiatives contributed to the lack of
progress. They pointed out that inadequate ongoing communication with
grantees before decisions on changes were made resulted in poor
implementation and prioritization of initiatives. Grantees also said
lack of clear objectives and a public time line for the reform process
sometimes prevented them from understanding the scope and timing of
planned changes.
What GAO Recommends:
OMB should ensure that grantees’ views are obtained as approaches are
developed. Further, Congress should consider reauthorizing the act
beyond its November 2007 sunset date to ensure that cross-agency
initiatives progress. OMB said that it will continue working with
agencies to further streamline grant administration and seek grantees’
input.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-566].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Stanley J. Czerwinski at
(202) 512-6520 or czerwinskis@gao.gov.
[End of Figure]
Contents:
Letter:
Results in Brief:
Background:
Grantees Report That, Despite Federal Efforts to Streamline, Excessive
Administrative Burden Remains:
Grantees Report That Inadequate Communication and Lack of a Clear
Schedule Have Resulted in Slow Progress:
Conclusions:
Matter for Congressional Consideration:
Recommendation for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Detailed Scope and Methodology:
Appendix II: Examples of Specific Areas Grantees Identified As Needing
Standardization and Streamlining:
Appendix III: Some States Have Taken Actions That Address Their Grant
Administration Issues:
Appendix IV: GAO Contact and Staff Acknowledgments:
Table:
Table 1: Description of Nonstate Grantees from Site Visits:
Figures:
Figure 1: Grant Life Cycle:
Figure 2: P.L. 106-107 Initiatives Organization Chart:
Abbreviations:
DUNS: Data Universal Numbering System:
OMB: Office of Management and Budget:
United States Government Accountability Office:
Washington, DC 20548:
July 28, 2006:
The Honorable Susan M. Collins:
Chairman:
The Honorable Joseph I. Lieberman:
Ranking Minority Member:
Committee on Homeland Security and Governmental Affairs:
United States Senate:
The Honorable Tom Davis:
Chairman:
The Honorable Henry A. Waxman:
Ranking Minority Member:
Committee on Government Reform:
House of Representatives:
About one-fifth of the federal budget--over $460 billion[Footnote 1]--
was distributed in fiscal year 2004 in grants to various entities, such
as state, local, and tribal governments, nonprofit organizations, and
colleges and universities. Grantees, particularly those that obtain
grants from multiple federal agencies, must comply with the different
requirements and systems that agencies have established, which can
result in directing excessive resources to meeting varying
administrative requirements rather than toward the purpose of the
program. While these requirements are generally intended to ensure
accountability, Congress became concerned that these administrative
requirements may be duplicative, burdensome, or conflicting and could
impede the cost-effective delivery of services at the local level. In
response, Congress passed Public Law 106-107, the Federal Financial
Assistance Management Improvement Act of 1999. The act (commonly
referred to by the grants community as P.L. 106-107) required that
federal grant-making agencies streamline administrative requirements
and engage and involve grantees in developing and implementing their
reform goals and implementation plans.[Footnote 2] It specifically
requires that the Office of Management and Budget (OMB) work with
agencies to establish common applications and systems and uniform rules
for federal grant administration. The act is scheduled to sunset in
November 2007.
P.L. 106-107 also directed GAO to assess the effectiveness of the
reform efforts and to obtain input from state, local, and tribal
governments and nonprofit organizations. In April 2005, we completed an
evaluation that focused on efforts federal grant-making agencies had
made to streamline and develop common processes for grantees and the
extent of coordination among OMB, the agencies, and potential grant
recipients.[Footnote 3] This second report examines how selected
grantees view the federal streamlining effort. Specifically, we will
identify:
* aspects of the various federal reform efforts and initiatives that
grantees identified as inadequate to meet the goals of P.L. 106-107, in
particular simplifying federal financial assistance application and
reporting requirements; and:
* grantees' views on further action needed to standardize and
streamline grant processes for grantees.
To address our objectives, we reviewed P.L.106-107 to identify
requirements and criteria for evaluating the effectiveness of agency
and governmentwide reform efforts. We then reviewed the common plan
developed initially by 26 grant-making agencies, and we obtained and
reviewed the annual progress reports that the act required each agency
to submit to OMB and Congress. We met with officials from OMB and with
lead officials from the various cross-agency work groups to discuss
ongoing reform and streamlining efforts. To get the perspective of
grantees, we reviewed the public comments that were received in
response to proposals for the initial, multiagencywide plan. We also
interviewed staff from several associations representing different
communities of grantees to identify issues that their memberships have
expressed about federal grant management process reform and to identify
states that were undertaking grant process management reforms of their
own. We analyzed results from surveys of users of the Grants.gov Web
portal, one of the initiatives implemented so far.
To get a better working-level understanding of grant management issues,
we visited and interviewed officials at 17 grantee organizations--4
state governments, 3 tribal governments, 2 county governments, 3
municipal governments, 2 nonprofit organizations, 2 higher education
institutions, and a nonacademic research institution. This selected set
of grantees represented a range of grantee sizes, levels of
administrative sophistication, and types of grants being applied for.
These discussions enabled us to gain an in-depth perspective on the
concerns of grantees from different communities of grant recipients,
and to understand how grantees manage an array of grants from different
programs and agencies, a perspective not obtained from individual
program reviews. Although we cannot project these results to all
grantees, the comments obtained help inform the issue of the type of
difficulties that grantees must address. These discussions also enabled
us to identify grant reform initiatives undertaken by selected states
that could have potential to reduce grantee administrative burdens. For
more on our methodology, see appendix I. We conducted our work in
accordance with generally accepted government auditing standards from
June 2005 through May 2006.
Results in Brief:
While some progress has been made, federal grantees continue to
identify significant areas of grants administration where the goals and
requirements of P.L. 106-107 have not yet been met. These concerns fall
into two groups: (1) the continued lack of standardization and other
inefficiencies in grant administration across agencies; and (2) the
difficulties related to technological implementation of the Grants.gov
Web portal, a Web site at which grantees can find grant opportunities
across government agencies and can apply for many of them online.
Grantees told us that federal grant-making agencies still use different
application, reporting, and payment systems, and use different
definitions on the grant application forms. Grantees also identified
other inefficiencies that continue to limit the effectiveness of grant
programs, particularly federal procedures that do not consider the
manner in which grantees conduct their grant administration. For
example, when federal processes are not aligned with typical grantee
business practices, key documents do not flow back and forth from the
federal grantor agency and grantees in an efficient manner. The most
significant progress in the area of technology development has been the
implementation of Grants.gov, but grantees report that the Grants.gov
technology nevertheless has areas needing improvement. Specifically,
grantees we interviewed were not satisfied with the performance and
usefulness of the Grants.gov search, or find, function, which was
intended to make it easier for them to identify grant opportunities.
Some grantees told us that the Grants.gov find feature was not any
better than previous methods of searching; others were unaware that
Grants.gov had a find capability at all. Additionally, some grantees
with experience using Grants.gov to apply for federal grants have had
difficulties and reported their considerable frustration with its
requirements, such as the complex and time-consuming process for
registering to use the Grants.gov apply system. The Grants.gov program
management office has worked at addressing some of these problems, for
example by improving the search capability in December 2005, and has
plans for further improvements.
Grantees we interviewed were concerned that, while the federal cross-
agency grant management reform initiatives were moving forward,
progress to date has been inadequate. They identified management issues
related to implementation of the P.L. 106-107 initiatives that have
contributed to the lack of progress. For example, they reported that
they would like to have more communication with work groups before
decisions about grant administration changes are made to better
prioritize and implement initiatives. Grantees also said lack of both
clear objectives and a public time line for the reform process
sometimes prevented them from understanding the scope and timing of
planned changes.
We are suggesting that Congress consider reauthorizing P.L. 106-107 to
make certain that federal agencies have clear requirements to continue
these efforts. We are also recommending that OMB ensure that the groups
leading the streamlining efforts identify and implement approaches to
obtaining grantees' input as policies and procedures are being
developed. In commenting by e-mail on a draft of this report, OMB wrote
that it will continue working with agencies to streamline grants
administration and to make further progress toward achieving the P.L.
106-107 goals, and it will continue to seek input from the grant
community.
Background:
The process of distributing federal assistance through grants is
complicated and involves many different parties, both public and
private, with different organizational structures and sizes as well as
varying missions. Federal grants are disbursed and managed by 26
different federal agencies as well as by some smaller federal entities,
and grants are used to implement about 1,000 different federal
programs. Grant programs have different objectives and strategies--
reflected in the application, selection, monitoring, and reporting
processes--that are intended to assure accountability to the federal
agencies.
The universe of potential applicants for grants is also large and
varied. It includes governments from the smallest school district to
the largest state. According to information from the Census Bureau and
the Department of Interior, there are approximately 88,500 units of
government in the United States, including states, tribal governments
and county governments, municipalities, townships, school districts,
and various other special purpose governments.[Footnote 4] Grant
recipients also include nonprofit organizations, described in one study
as ranging from small organizations with annual budgets less than
$25,000 to multi-million-dollar health organizations.[Footnote 5] We
reported in 2005 that over 460,000 nonprofit organizations filed tax
forms in 2002.[Footnote 6] Some grants are also provided to
individuals.[Footnote 7] While not all of these entities actually apply
for grants, they are potentially eligible and do reflect the
considerable diversity of grant recipients. The grants process is
further complicated because state agencies may act as both grantees
soliciting federal grant resources and as grantors distributing federal
funds to other grantees. Thus states redistribute significant amounts
of the federal aid they receive to local governments and nonprofit
agencies in their states.
Moreover, the grants themselves come in a wide variety of types and
sizes. Grant types cover a broad spectrum from those narrowly targeted
to fund a program to those that are broadly targeted and allow the
grantee to make decisions regarding how funds are used. Mandatory
grants are awarded under a program where the authorizing statute
requires the award to be made to each eligible entity under the
conditions and in the amount (or based on the formula) specified in
statute. Discretionary grants are those in which the federal awarding
agency may select the recipient from among all eligible recipients, may
decide to make or not make an award based on the programmatic,
technical, or scientific content of an application, and can decide the
amount of funding to be awarded to each recipient. Grants can be small,
such as the $1,100 National Science Foundation Social, Behavioral, and
Economic Sciences Grant, or large, such as California's $3.7 billion
Temporary Assistance to Needy Families block grant.
While there is substantial variation among grants, they generally
follow a life cycle as shown in figure 1: announcement, application,
award, postaward, and closeout. Once a grant program is established
through legislation, which may specify particular objectives,
eligibility, and other requirements, a grantor agency may impose
additional requirements on it. For competitive grant programs, the
public is notified of the grant opportunity through an announcement,
and potential grantees must submit applications for agency review. In
the award stage, the agency identifies successful applicants or
legislatively defined grant recipients and awards funding. The
postaward stage includes payment processing, agency monitoring, and
grantee reporting, which may include financial and performance
information. The closeout phase includes preparation of final reports,
financial reconciliation, and any required accounting for property.
Audits may occur multiple times during the life cycle of the grant and
after closeout.
Figure 1: Grant Life Cycle:
[See PDF for image]
Source: GAO.
[End of figure]
Grantees have different approaches for managing their grants across
their own internal subdivisions or departments. Grantees we visited had
a variety of grant administration structures and degrees of
centralization that were not dependent on the size of the organization
or the number of grants they received. In a more decentralized
structure, each department within the organization managed most aspects
of its grants, including financial accounting and reporting. For
example, in a municipality the police department might deal with
federal Department of Justice grants; the health department might deal
with Environmental Protection Agency grants; and the school
administration might deal with Department of Education grants.
Conversely, a more centralized structure might have a single grants
office that coordinated all aspects of grant administration across the
organization, including final submission of applications and general
oversight of reporting and accountability compliance. Even for grantees
we visited with a decentralized structure, some amount of central grant
oversight was generally present.
P.L. 106-107 was passed in response to the complicated nature of the
grant process. To address these issues, the act required OMB to direct,
coordinate, and assist federal agencies in establishing common
applications, systems, and uniform rules to improve the effectiveness
and performance of federal grants with the goal of improved efficiency
and delivery of services to the public. For example, under P.L. 106-
107:
* OMB is required to direct, coordinate, and assist federal agencies in
developing and implementing a common application and reporting system,
including electronic processes with which a nonfederal entity can apply
for, manage, and report on the use of funds from multiple grant
programs that serve similar purposes but are administered by different
federal agencies; and:
* federal grant-making agencies are required to streamline and simplify
their application, administrative, and reporting procedures and enable
applicants to apply for and report on the use of federal grants funds
electronically.
As we reported previously, the federal government has undertaken
several activities to implement P.L. 106-107.[Footnote 8] OMB has
designated the Department of Health and Human Services as the lead
agency responsible for assisting OMB in implementing the act.
Activities are presently organized under two different groups--the
Grants Policy Committee and the Grants Executive Board--who report to
OMB's Office of Federal Financial Management and Office of E-Government
and Information Technology, respectively (see fig. 2). The Grants
Policy Committee is currently responsible for formulating overall grant
management reform policy and oversees the efforts of the cross-agency
work groups. Work groups were organized shortly after the act was
passed to develop policies for implementing the act's goals related to
their respective areas:
* Pre-Award Work Group, responsible for streamlining policies and
practices that occur while grantees find grants, apply for grants, and
receive notification of award decision;
* Mandatory Work Group, responsible for streamlining policies and
practices for mandatory grants;
* Post-Award Work Group, responsible for streamlining policies and
practices that occur while grantees perform awards, complete required
reporting, acquire payments, and during the federal monitoring of
grantees;
* Audit Oversight Work Group, responsible for improving OMB's Circular
A-133 single audit process; and:
* Training and Oversight Work Group, responsible for addressing
governmentwide issues concerning the grants management workforce.
Figure 2: P.L. 106-107 Initiatives Organization Chart:
[See PDF for image]
Source: GAO.
[End of figure]
The Grants Executive Board consists of senior officials from federal
grant-making agencies. They provide strategic direction and oversight
of Grants.gov and the Grants Management Line of Business, which
implement technological aspects of P.L. 106-107. Grants.gov is a single
Web portal that enables users of all types to search for grants
electronically. Agencies are required to post all discretionary grant
opportunities on Grants.gov. Agencies are also able to provide the
capability for potential grantees to apply for grants through this Web
site. A Grants.gov official said that as of May 22, 2006, all but two
agencies have provided this capability and that both agencies plan to
post applications on the site in June 2006. Grants.gov continues to
make improvements to its cross-agency systems at which potential
grantees can find and apply for grant opportunities. A Grants.gov
official told us they have started planning and designing upgrades to
the computer hardware to meet the processing requirements as additional
grant application packages and functions, including improved search
capabilities, are added to the site. Further, a newly designed
Grants.gov Web site was introduced in July 2006.
The Grants Management Line of Business is an initiative begun in spring
2004 that intends to provide end-to-end management (that is, over the
entire life cycle of a grant from announcement to closeout) of grants
and address how best to consolidate the administration and management
of grants across agencies. In 2005, the Department of Health and Human
Services and the National Science Foundation were selected by OMB to be
the managing partners to lead the Grants Management Line of Business
effort. They plan to implement a consortia-based approach that builds
on existing commercial systems and grants management systems in
selected agencies to develop those agencies and their systems into
shared service providers or centers of excellence to be used by other
agencies. In late 2005, OMB and the Grants Executive Board chose three
agencies--the National Science Foundation, the Administration for
Children and Families within the Department of Health and Human
Services, and the Department of Education--to lead three consortia in
defining requirements and agency needs around a common end-to-end
grants management system for members of each consortium. OMB officials
told us that they, the cochairs of the Grants Management Line of
Business, and the consortia leads have developed a process for agencies
to join a consortium and that the consortia leaders are working with
other agencies to discuss potential partnerships and develop
memorandums of understanding. A cochair of the initiative said OMB may
designate additional consortia based on agency interests in leading a
consortium. Detailed plans for the initiative indicate a goal of
September 2011 for completing the movement of agencies to the common
systems.
Grantees Report That, Despite Federal Efforts to Streamline, Excessive
Administrative Burden Remains:
While OMB and the federal agencies have various efforts under way at
the federal level to streamline grant administration, grantees continue
to identify areas in which the goals of P.L. 106-107 have not been met.
Areas grantees identified include the lack of standard forms and
systems across agencies, federal processes that do not take into
account the manner in which grantees conduct their grant
administration, and technological aspects of the changes that have
presented problems for grantees.
Lack of Standardization in Applying for and Managing Grants:
Grantees continue to express frustration with having to work with
varying systems to apply for and report on the use of grant funds, to
respond to different administrative requirements, and to use different
payment systems. They voiced objections to policies and procedures that
differ by agency, as the differences necessitate that grantees become
familiar with different application and reporting requirements. (App.
II summarizes specific areas grantees identified as needing
standardization and streamlining through the grant life cycle.)
Multiple Application, Reporting, and Payment Systems Remain:
Grantees commented that they continue to need to be familiar with
multiple electronic systems and paper processes of different agencies
to apply for grants. As federal agencies transition to using Grants.gov
for their application process, grantees find themselves submitting
applications by mail, through existing agency systems, and through
Grants.gov. For example, officials from one research institution told
us that they had recently submitted applications through Grants.gov,
other federal agency Web-based systems, and by mail. A few grantees
mentioned that they had to mail in parts of the application in addition
to submitting parts online for some agencies. Some grantees expressed a
preference to be able to continue to use particular existing agency
systems because they were familiar with these systems and they found
useful some of the options that they provided, such as tracking the
status of applications.
Along with agencies' varying application processes, grantees described
varying agency procedures required to submit financial and progress
reports. When the cross-agency work groups sought public comments in
2001, several grantees raised issues such as the need to develop
uniform reporting requirements, formats, guidelines, and submission
frequencies, and the need to obtain and submit reports online. Grantees
we visited said that the frequency with which progress and financial
reports were required varied across programs, making it difficult to
keep track of when reports were due. Progress reports are sometimes
required quarterly, semiannually, or annually. Due dates for quarterly
financial reports also varied; grantees reported that financial reports
are due as few as 30 days and as long as 90 days after the end of the
quarter.
Grantees provided several examples of administrative requirements that
vary across grants and the resulting challenges. An official from one
nonprofit group we met with, which receives seven separate grants all
related to serving one special population, said reporting was the most
difficult part of managing federal grants for them. Reports require
information in different ways, and this requires that intake
information on their clients must be collected in different ways, such
as by special age-grouping categories. Grantees also described
different systems to submit reports. Some are submitted to agencies'
online systems, while others are submitted via paper hardcopy. One
system that grantees described required continual updating of
activities as often as daily for the purpose of generating performance
reports. A P.L. 106-107 cross-agency team representative explained that
standard reports are being developed, but have not been implemented
yet. Grantees receiving many federal grants also told us they would
like to have the ability to track reporting deadlines and submissions
online. This capability for grant administrators to conduct online
tracking of when reports are due and which reports have been submitted
to and received by the federal grantor agencies would decrease the
confusion caused by various reporting schedules.
Some grantees we interviewed expressed a preference for a single grant
management system on which multiple users could perform concurrent
tasks and that would provide the data to conduct end-to-end management
of grants throughout the grants' life cycle, unlike Grants.gov, which
only handles the front end of the process (i.e., identifying and
applying for grants). Several grantees told us they have had experience
using such systems. However, without the capability for grantee staff
to oversee the entire grant process on one system, grantees cannot
easily monitor when program reports are due, whether these reports have
been submitted and received, and whether payments have been made. Not
having this end-to-end grant management capability makes it
particularly challenging for central grant management staff at larger
grantees to oversee the grant process across their organizations. P.L.
106-107 required the development of a common system, including
electronic processes, through which a grantee can apply for, manage,
and report on the use of funding. To date, such a system has not been
developed across federal agencies. However, the Grants Management Line
of Business initiative, if implemented as proposed in its business
plan, could eventually result in reducing the number of different
systems.
Several grantees identified the multiple payment systems that they must
access to receive funds as a source of frustration. The existence of
multiple payment systems was one of the areas of greatest concern by
those grantees who commented on the initial plan, and grantees continue
to identify the need to reduce the number of payment systems. The
National Association of State Auditors, Comptrollers and Treasurers,
commenting on this situation, explained that it has continued to cause
problems for the states because of the continued use by some federal
agencies of unreliable and antiquated systems. Some of these systems
are paper-based or phone systems. Many grantees with whom we spoke
described needing to understand several payment systems--as many as six
different systems in one municipality. This creates problems as new
employees need to be trained on multiple systems. Grantees we
interviewed said they preferred some electronic systems more than
others because of the ease of use and the ability to track balances and
print reports. They also expressed concern that as systems were
standardized, the grant management systems that they believe are the
most functional will not be selected and used as the standard system.
In 1998, the Chief Financial Officers Council designated two payment
systems for use by federal civilian grant-making agencies and
designated a third payment system for use by the Department of
Defense.[Footnote 9] As of November 2005, 16 civilian agencies have
migrated to one of the civilian payment systems, but agencies still
continued to operate nine different systems. As of May 2006, the Grants
Policy Committee's Post-Award Work Group was seeking information on
agencies' current payment systems and their plans for these systems in
the future. Officials from neither the work group nor the Grants
Management Line of Business team could provide us with information on
payment systems that would be used under the Line of Business consortia
approach. They said these details had not yet been decided.
Lack of Standard Definitions and Formats for Grant Documents:
Grantees reported that they see differences across agencies in
policies, and the requirements and forms resulting from those policies.
Grantees reported that standard definitions do not exist for some
terms, and as a result, grantees must track and report expenses in
different ways. For example, expenses such as particular employee-
related costs are categorized differently across agencies, which
requires recalculating expenses into new categories, a time-consuming
step.
Grantees said that the lengthy and differing terms and conditions that
are part of the award agreements are difficult to grasp. They generally
said standard terms and conditions would be very helpful in identifying
significant differences between requirements of different agencies. As
of March 2006, the Grants Policy Committee's Pre-Award Work Group was
drafting a standard award notice and standard terms and conditions. It
would include a standard section, but would also identify award-
specific terms and conditions, including points related to the program
and to the specific grantee, if needed. After the draft is complete, it
will be reviewed by the Grants Policy Committee, reviewed by the
agencies, sent to OMB for approval, and published in the Federal
Register for a period of public comment. The goal for publication is
early 2007.
Grantees reported that for each grant awarded, they are required to
review and sign a set of multiple certifications and assurances forms,
though these forms do not vary widely from grant to grant, even across
agencies. These forms attest that the policies and procedures of a
grantee organization are in accordance with federal requirements.
Grantees are typically asked to avow that they will not use funds for
lobbying purposes and that they will provide a drug-free workplace,
among other assurances. Grantees noted that these types of policies are
unlikely to change frequently, and that it seems unnecessary to
reconfirm their adherence to them on a continual basis. Nevertheless,
grantees receiving many federal grants must get essentially the same
forms signed many times by executive level managers and submit these
forms to agencies, a process they say is duplicative and time-
consuming. In addition, frequently, certifications and assurances
require original signatures, and must be submitted in hardcopy, even at
times when the application is submitted electronically, adding
additional burden. Grantees suggested that there should be a mechanism
to submit any required certifications and assurances annually, in a
format which is accessible and accepted governmentwide. This would
relieve them of this additional burden and reduce the amount of
paperwork required.
Grantees Identified Areas Where Administrative Inefficiencies Continue
to Exist:
In addition to the lack of standardization in procedures and systems
across agencies, grantees mentioned other areas where inefficiencies in
grant administration and excess administrative burden on grantees
exist. These included not aligning federal grant processes with typical
grantees' business processes, inadequate advance information on
potential grant availability, and unexplained delays in grant awards.
OMB officials with whom we discussed these issues were generally
unaware of them but acknowledged that further investigation might be
warranted into how to best alleviate the problems.
Federal Processes Not Aligned with Grantee Business Processes:
Federal grant administrative systems, particularly those being
developed under streamlining initiatives, do not always seem to take
into account the manner in which grantee organizations conduct the
business of grant administration. For example, grantees told us that
federal agencies generally only send award notifications to one person
in the organization, frequently at the executive level (for example,
the mayor of a city), although several contacts are listed in the
application. By sending the notification by paper or e-mail to a single
contact who is authorized to sign off on grant applications for the
organization but is not directly involved with applying for the grant,
federal agencies might inadvertently leave the grantee's program
manager and financial staff out of the communication chain. It can take
some time for organizations to filter the information through, and
grantees said that notifications were frequently lost in their
organizations. For instance, if a letter or e-mail is sent to the mayor
of a city, it could be some time before that information is reviewed
and passed along to the appropriate person. Grantees would prefer that
notifications go to multiple people in the organization.
Additionally, grantees told us when they receive a bank wire transfer
report from their bank indicating that a payment has been credited to
their account, they sometimes cannot identify the grant program for
which it is providing funds because the bank report does not provide
helpful information. When funds from federal agencies are deposited,
grantee financial staff are notified of a deposit to the grantee's
account, which is notated with coding on a wire transfer report.
Grantees explained that these codes are complicated alphanumeric
sequences which have little or no information about which grant or
program the money is for. The grantee accountants may be unaware that
the funds are coming, sometimes because grantee program staff have
drawn down funds and have not notified them and sometimes because the
deposit was not expected. Financial staff said that even if they are
aware of the request, they match transactions primarily by dollar
amount because the codes are difficult to decipher. Grantees said that
it would be helpful to have more information, such as a payment
transaction number or Catalogue of Federal Domestic Assistance number,
on the wire transfer report.[Footnote 10] However, if that is not
possible, they suggested that some type of notice from the agency
describing the deposit made would be helpful.
Inadequate Advance Information on Potential Grant Availability:
Grantees reported to us that they generally do not have adequate time
between when federal agencies post grant opportunity announcements and
application deadlines to adequately develop application documentation
and obtain the necessary internal approvals. They explained that, in an
environment of increasing reliance and emphasis on partnerships in
grant project management, grantees have difficulty developing a well-
conceived project plan, lining up partnerships, and getting through the
necessary internal approval processes in the period normally allotted.
They said that they sometimes have insufficient time to obtain
approvals from internal authorities such as city councils and county
boards, who meet infrequently, yet such approvals are often required by
local officials before submitting applications. If lengthening the
application period is not feasible for a given grant or program, one
grantee suggested that federal agencies provide better forecasting of
opportunities they expect to be available, funds permitting. This would
allow grantees to begin developing projects well in advance. Some
agencies, such as the Department of Education, already provide
forecasts on their Web sites of funding opportunities.[Footnote 11]
Grantees also stated that it is difficult from the multitude of grant
opportunities available to readily identify those for which they are
most competitive. Grantees noted that there is inadequate information
in opportunity announcements for them to make a fully-informed
assessment of the appropriateness of their project for the grant
program. They said that the eligibility requirements do not always make
it clear whether their organization is likely to be considered.
Grantees said that the program may be designed for a specific type of
organization in mind, such as a particular level of government, and
that more information about these would allow them to make better
decisions about whether or not to apply. To improve their ability to
parse through announcements, grantees said it would be helpful to have
information about previously successful applications, which could
include a list of awardees or project abstracts. This would allow
grantees to make better decisions about whether or not the project they
have in mind is in line with the federal agencies' expectations for
that grant opportunity.
Delays and Uncertainties in Grant Award Process:
Grantees said delayed grant awards and uncertainty about award time
frames create significant burden on them and limit their ability to
plan for and efficiently execute funded grant programs. Grantees noted
that they often have no way to check on the status of their
applications after they are submitted. Further, they often receive
award notifications significantly later than they had anticipated,
sometimes months after the expected award date provided in the
opportunity announcement. These uncertainties and delays cause
significant problems in planning for and executing grant projects. Some
grantees experience problems related to the seasonal nature of their
work, and delayed awards could mean that the project must be delayed a
full year before beginning in certain fields such as environmental
research. Additionally, grantees noted prolonged uncertainty makes it
difficult to maintain partnerships with other organizations and that
they may need to quickly find another partner once the grant has been
awarded. Grantees suggested that agencies should award grants in a more
timely way or provide more precise information on when an award could
be expected.
Technology Issues Have Reduced the Benefits of Some Initiatives:
Grantees with whom we spoke expressed concerns about difficulty using
features of the Grants.gov site, the key effort completed so far in
response to P.L. 106-107. Of those who were aware of Grants.gov's find
capability, several told us it was not helpful in identifying
appropriate grant opportunities for them. Grantees also expressed
frustration with technological issues related to the apply capability
of Grants.gov, including steps required to register before a user can
submit an application.
Grants.gov Find Capability:
Although Grants.gov's find capability was designed to provide
information on federal grant-funding opportunities at a single Web
site, several grantees told us that it has not provided a better
alternative to traditional methods of finding federal grant
opportunities. Some grantee officials were unaware of Grants.gov's
ability to help identify grant opportunities. The site enables
potential applicants to search for grant opportunities by several
characteristics, such as the type of activity funded and the agency
providing funds. Grants.gov can also notify potential applicants by e-
mail of new opportunities that meet certain parameters the potential
applicants have preidentified.
During our visits with grantees in the fall of 2005, we heard several
comments that the keyword search did not work correctly and returned
irrelevant grants, resulting in some grantees deciding that such
searches were too time-consuming and generally unproductive. Some also
said that grant opportunities they knew were open were not included in
results when searching for relevant key words. They preferred using
other approaches to identifying grant opportunities, such as using paid
subscriptions to grant-finding services and searching individual
agencies' Web sites as they have in the past.
Grants.gov Program Management Office officials told us in early
December 2005 that the search engine had not been working properly, and
that an update planned for later that month would address issues that
had created problems for users. They reported to agency stakeholders in
early 2006 that the search engine had been modified and improved.
However, our interviews with selected grantees raised the issue that
some grantees may have already dismissed the Grants.gov find keyword
search function as a useful tool and abandoned this approach to
identifying relevant funding opportunities. We also reviewed results of
Grants.gov's online survey presented to a random sampling of site
visitors and found that the responses indicated users' views have not
improved markedly since the December 2005 change. Moreover, a question
posed on the survey after the update asking about the search format
enhancements showed mixed results.[Footnote 12]
Grants.gov Apply Capability:
The technological solutions chosen for Grants.gov's capability to apply
online for grant opportunities at federal grant-making agencies--the
apply capability--has also caused problems for grantees. Grantees cited
many examples to us of the system not being functional enough and easy
to use. Some complained of slow performance on the system, particularly
at peak usage times. Some complained of the system being shut down. A
few expressed a desire to have the capability to test the apply
function before they were actually ready to submit, given the pressure
experienced just prior to deadlines. Others expressed frustration that
existing systems for agencies that incorporated all aspects of grant
management from the application to closeout phases were not used
instead of the newly-developed Grants.gov system, which could only
address identifying and applying for grants.
The Grants.gov officials have worked at addressing some of these
problems. They said they had, for example, upgraded hardware and
increased capacity for peak application periods as agencies continue to
increase the number of grant opportunities requiring that applications
be submitted through Grants.gov. According to the Grants.gov officials,
future plans also include improving the Web site to provide the
capability for users to practice applying for grants and test options.
Grants.gov users who responded to the online survey questions related
to the apply function gave generally neutral responses. Grantee survey
respondents did show a greater degree of endorsement to the question of
how likely it was that they would use Grants.gov to submit an
application.[Footnote 13]
One issue that some grantees raised was that Grants.gov's apply feature
requires the use of software that works only on the Windows operating
system. For example, research institutions that use Macintosh computers
cannot use this software to submit applications on Grants.gov.
Grants.gov officials report that as of June 2006 more than 20
organizations had the capability to use a system-to-system approach
that directly links Grants.gov to their own internal computer system.
However, this requires significant programming and financial investment
to use. In addition, in December 2005, Grants.gov instituted a
temporary solution to allow users of Macintosh systems to complete and
submit applications using the electronic forms software. Grants.gov
officials anticipate that a final solution will be available in
November 2006.
One particularly difficult problem for grantees using the apply feature
has been the initial registration process. Grantees experienced
difficulties with registering through the Central Contractor
Registration--a requirement to use Grants.gov--as well as the time it
takes to complete the process. They stated that the registration
process was complicated and difficult. Much of the confusion has
centered on the use of Data Universal Numbering System (DUNS) numbers,
which are used to track grantees. States, as well as other grantees,
sometimes have more than one DUNS number and stated that it is unclear
which number should be used for the registration. Grantees also stated
that the process takes too long to complete. The Grants.gov online
survey also asked site visitors to rate both the clarity of
instructions for registering and the ease of registering. No
significant positive shifts in the average ratings to these items were
observed after the Web site was upgraded in December 2005.[Footnote 14]
Grantees Report That Inadequate Communication and Lack of a Clear
Schedule Have Resulted in Slow Progress:
Grantees we interviewed were concerned that, while the three cross-
agency grants management reform initiatives related to P.L. 106-107 are
moving forward, progress to date has been inadequate. Grantees
identified two specific areas where the management of P.L. 106-107
initiatives contributed to the lack of progress: (1) inadequate ongoing
communication with grantees; and (2) insufficient information on the
timing and objectives of proposed changes, including a lack of clarity
on the responsibility for decisions involving both policy and
technology issues.
Inadequate Communication with the Grantee Community:
According to some grantees and grantee associations, insufficient
ongoing communication with the grantee community has resulted in poor
implementation and prioritization of initiatives and has limited
grantees' use and understanding of new functionality of electronic
systems. P.L. 106-107 required that lead officials consult with
representatives of nonfederal entities during the development and
implementation of the P.L. 106-107 initial plan. In 2005, we
recommended to OMB that cross-agency work groups solicit grantee input
and provide coordination with grantees on an ongoing basis.[Footnote
15] However, there has not been extensive communication with all types
of grantees on policy and technology development. For example, one of
the work groups told us that they obtained feedback from grantees on a
potential product during its development, but this has not occurred on
a wide scale.
Our discussions with grantees about P.L. 106-107 initiatives that have
been implemented indicate that insufficient communication with the
diverse grantee community has hampered effective and efficient
implementation of the act, especially in the case of the technology
implemented. As discussed earlier, grantees experienced problems
stemming from policies and technologies that are inconsistent with
grantees' business practices and these have caused inefficiencies in
their administration of grants. These issues may have been addressed,
or addressed sooner, if greater communication, before implementation,
existed between grantees and the cross-agency work groups. For example,
we found that some grantees could not efficiently use the software
needed to apply for grants on Grants.gov as intended because internal
information technology policies limit their use and transfer of certain
files or programs throughout the organization.
The Grants.gov staff felt that the needs of rural users merited the use
of an application that could be completed offline, rather than using a
system that involves completing forms while online, to reduce the time
spent online completing the application. They also stated that using
online fillable forms would require a greater investment in hardware to
store applications that were not complete and also maintain system
performance. However, some grantees we spoke with stated that it takes
a long time to submit applications to Grants.gov and they have
experienced problems with submission due to large file sizes. They
stated that they prefer completing forms online and that it would be
easier for them to submit applications using that method.
In addition, the lack of communication between the work groups and the
whole grantee community may have prevented the work groups from
focusing on initiatives that grantees found important. Grantees we
spoke with stated that there was a need to address postaward
administration in addition to addressing the find and apply phases that
are completed on Grants.gov. P.L. 106-107 requires a common electronic
system that grantees can use to apply for, manage, and report on
federal financial assistance. However, according to a coleader of the
Grants Management Line of Business initiative, no single common system
exists for grantees to report on grants from multiple agencies. That
initiative should eventually meet the need for a common system, but not
by the law's sunset date. Had grantees been consulted about their
priority of needs, greater emphasis may have been placed on
implementing this initiative.
In some cases the lack of communication with grantees has limited their
ability to use and understand new technology implemented under P.L. 106-
107. Some grantees stated that they had not heard of Grants.gov, though
they expressed some interest when we discussed it with them. Some
grantees also expressed concern about the lack of training they
received on the use of electronic systems, either Grants.gov or other
agency electronic systems used for grants management. Those that did
use Grants.gov expressed some serious concerns about its functionality
as well. For example, as discussed previously, many stated that the
Grants.gov keyword search did not yield grants that were relevant to
the search words. Some of these issues may have been resolved more
quickly if communication with grantees had been greater.
The lack of adequate communication between the federal government and
state grantees particularly affects progress in streamlining grant
administration because of the dual role that states play. States both
receive federal grants and provide grants to other levels of government
and nonprofit agencies, including some federal funds that pass through
the state. Subrecipients of federal grants must follow procedures
established by both federal agencies and state agencies, all of which
can differ. States must implement federal changes in their own state
grant awards as required by the federal agencies. In addition, federal
efforts to reduce administrative burden on grantees may also stimulate
corresponding state actions to examine requirements added by states.
Some states are already taking actions (discussed in more detail in
app. III) that may reduce administrative burdens on recipients of state
grant awards. For example, states we visited had initiated their own
grant process management reforms, including:
* establishing central policies and procedures that provide consistency
across all state agencies awarding funds to local governments and
nonprofit agencies;
* establishing central state grants management offices that can provide
mechanisms for statewide oversight of grants management; and:
* developing new streamlined and standardized grants management systems
that are similar in intent to the federal Grants.gov system.
The research community has established avenues of communication with
relevant federal agencies through the Federal Demonstration
Partnership, a cooperative initiative of 10 agencies and over 90
research institutions that encourages streamlining the administration
of federally-sponsored research. The research community has used the
Federal Demonstration Partnership to provide input on the
implementation of P.L. 106-107. This initiative, however, only
encompasses the research community. State and local governments, tribal
governments, and nonprofit organizations have had only limited success
in organizing their efforts to share their views with federal
streamlining initiatives in an ongoing and continual manner.
The National Grants Partnership, an organization that brings together
both government and nongovernment individuals with an interest in
improving grants administration, believes it can serve as a similar
avenue of communication with the cross-agency work groups. The National
Grants Partnership's membership includes individuals from state, local,
and tribal governments; federal agencies; nonprofits; and associations
that represent particular sectors of the grant community. National
Grants Partnership representatives told us that they have not been able
to have significant interaction with the cross-agency initiatives
before they are published in the Federal Register to obtain comments
from the public. They feel that, at that point, they can have little
influence. They believe to better represent the grantee community it is
necessary to have greater communication with the cross-agency work
groups on streamlining issues before proposals are published in the
Federal Register for comment.
Although no concrete plans had been made as of March 2006, the Grants
Policy Committee has recognized the need for grantee feedback and
discussed how to obtain it. Committee members told us that they may
hold meetings in multiple geographical locations with specific topics
for discussion. The National Grants Partnership representatives told us
they would like to be consulted on how the Grants Policy Committee
plans to conduct these meetings to ensure that their members' views are
expressed on a wide variety of issues. As of January 2006, the Grants
Management Line of Business, which is currently in development, had not
solicited states' or other grantees' feedback on capabilities that they
would like to see used by the consortia service centers.
Grantees Are Unsure of Plans and Time Lines:
Plans and time lines for the P.L. 106-107 initiatives have not all been
provided to grantees, leaving grantees unsure of what changes will be
made and when. The initial cross-agency plan for implementing the act
included some short-term time lines, but these were not explicitly
updated in later governmentwide annual reports to Congress and OMB,
which describe the cross-agency work groups' progress and update their
initial plan. Similarly, most of the federal grant-making agency annual
reports to Congress, which describe the progress of each agency, do not
contain goals and time lines. These annual reports have listed any
upcoming activities as "future plans" but have not provided time frames
for completion. The lack of a publicly available schedule reduces both
the individual agency and the cross-agency initiatives' accountability
for making progress. In 2005, we recommended that OMB ensure that
agency annual progress reports to Congress and OMB on implementation of
P.L. 106-107 are prepared and contain information on their progress
towards goals. However, 12 of the 26 annual reports for the period
ending May 2005 were not finalized and posted on the Web site for the
public until after March 28, 2006. In the same report, we also stated
that the lack of clear goals and time lines for cross-agency work
groups to complete tasks and for agencies to implement systems
undoubtedly has contributed to the lack of progress in implementing
these proposals. An OMB official told us that it has been challenging
to develop a comprehensive schedule but they do have individual
schedules for various initiatives coordinated through the Grants
Executive Board.
In some cases for which project time lines were provided, the goals set
for the cross-agency initiatives are not being met or extend beyond
P.L. 106-107's sunset date. For example, the goal of reducing payment
systems was not achieved by the Chief Financial Officers Council's
deadline and a workgroup chairman said that not all agencies will be
using these systems before November 2007. As mentioned previously, the
Grants Management Line of Business initiative plans for the consortia
service centers indicate that all agencies will not complete migration
to the centers until 2011. As of May 2006, the lead agencies were
reaching out to other grant-making agencies to discuss an approach and
time line for consortia partnering. While this may be an appropriate
time line for implementing these complicated electronic systems, it
appears the lack of early attention placed on this initiative will
prevent its completion by the law's 2007 sunset date. In addition, the
milestones that the Grants Policy Committee provided to us in March
2006 indicate that some tasks may not be completed by the act's sunset
date.
Conclusions:
When Congress passed P.L. 106-107 in 1999, it was concerned that
federal grant administration requirements could be duplicative,
burdensome, and conflicting, and that this prevents the cost-effective
delivery of services at the local level. Since then, individuals from
many agencies have begun to work together to meet the act's goals of
simplifying grant administration and improving the effectiveness of
grants. They organized into work groups, proposed changes, and
implemented some of them. Their job has not been a simple one; it
involves reaching consensus and obtaining conformity among 26 agencies
whose procedures have evolved independently to address varying program
goals, agency systems, management styles, and individual initiatives
over the years. Given the complexity of the P.L. 106-107 initiatives,
it is vital to continue to integrate and coordinate their various
components. However, despite all these efforts, estimates for
completing these initiatives indicate that the goals of P.L. 106-107
will not be met by the act's sunset in November 2007. Because of this,
grantees will continue to need to work with different systems that
often have different processes and procedures.
Because additional work still needs to be done, it is important that
the momentum established under P.L. 106-107 initiatives continues past
the law's sunset and that agencies understand the importance of being
active participants in the grants administration streamlining process.
As a result of P.L. 106-107, agencies have begun to work together to
develop common systems and processes. However, without the continued
congressional oversight and accountability that the law brings,
implementation of these initiatives may lose momentum when the act
sunsets. As a result, opportunities to simplify grant administration
for the grantee, and thus to deliver services more cost-effectively,
could be missed.
As we spoke with grantees, it was apparent that closer involvement with
all types of grantees as policies and technologies have been developed
may have both reduced the negative effect on grantees from some
technological changes and could have identified other areas that are
critical to grantees. The cross-agency teams are just beginning to
establish a mechanism to get grantees' views through forums held across
the nation. Grants.gov's ongoing systematic efforts to get system
users' comments have helped keep it informed of grantees' concerns
about its systems in place. However, it has no systematic way to get
grantees' views as it develops and proposes changes. Plans to involve
grantees as the newer Grants Management Line of Business initiative
evolves have not yet been developed. It is particularly important that
states, with large grant management systems of their own, be able to
have input into, and knowledge of, potential changes at the federal
level. If grantees remain isolated from the development of systems and
policies that they will use or be affected by daily, the system and
policies will remain ineffective and require more resources to use. As
a result, grantees will direct resources from implementing programs to
completing administrative duties.
In our previous report, we recommended several areas in which OMB
should take action to augment progress toward meeting the goals of P.L.
106-107.[Footnote 16] Action is still needed to ensure that adequate
progress is made on streamlining grant administration. For example,
* clear goals with time lines for all the initiatives have not been
set;
* efforts toward common grant-reporting systems are moving slowly;
* although most agencies have submitted their 2005 annual progress
reports, many were not finalized and posted on the Web site until after
March 2006; and:
* grantees do not seem to be having adequate input early in the
development of solutions.
It appears that without additional oversight, P.L. 106-107's goals are
not likely to be met in the short term.
Matter for Congressional Consideration:
Given that the goals in P.L. 106-107 are not likely to be met by the
sunset date of November 2007, Congress should consider reauthorizing
the law to make certain that federal agencies have clear requirements
to continue these efforts and the momentum for progress in streamlining
grant administration continues. As part of the reauthorization process,
Congress should consider ensuring that agencies and cross-agency teams
are setting goals and making progress toward P.L. 106-107's objectives.
Recommendation for Executive Action:
OMB should ensure that the Grants Executive Board and the Grants Policy
Committee identify and implement approaches to obtaining grantees'
input as policies and procedures are being developed by these lead
groups.
Agency Comments and Our Evaluation:
We provided a draft of this report to OMB for comment. OMB responded in
an e-mail that it will continue working with agencies to streamline
grants administration and to make further progress toward achieving the
P.L. 106-107 goals. OMB added that it will also continue to seek input
from the grant community, such as at regular stakeholder meetings,
webcasts, and other methods as policies are developed.
We are sending copies of this report to the Director of OMB. We will
also make copies available to others on request. In addition, the
report will be available at no charge on the GAO Web site at
[Hyperlink, http://www.gao.gov].
If you have any questions about this report, please contact me at (202)
512-6520. I can also be reached by e-mail at czerwinskis@gao.gov.
Contact points for our Offices of Congressional Relations and Public
Affairs may be found on the last page of this report. GAO staff who
made major contributions to this report are listed in appendix IV.
Signed by:
Stanley J. Czerwinski:
Director Strategic Issues:
[End of section]
Appendix I: Detailed Scope and Methodology:
To address our objectives, we reviewed P.L. 106-107 to identify
requirements and criteria for evaluating the effectiveness of grant
administration reform efforts. We also reviewed (1) the initial plan
developed by teams with representation from grant-making agencies
across the federal government in 2001 and its annual updates and (2)
the individual agency progress reports on P.L. 106-107-related
activities for 2005. We interviewed officials from OMB and from the
various initiatives that are addressing P.L. 106-107 requirements--the
Grants.gov Program Management Office, the Grants Management Line of
Business leaders, and leadership from the Grants Policy Committee and
its cross-agency teams. These officials updated us on the status of
their initiatives.
To obtain information on grantees' views on the streamlining that has
occurred and additional efforts that they believe should be done, we
used several approaches. We reviewed testimony related to deliberation
of streamlining legislation. We also analyzed comments submitted by
grantees on the initial plan. We interviewed representatives from
several associations representing various sectors of grantees, such as
states, counties, small municipalities, tribal governments,
universities, and nonprofit organizations. We obtained information from
them on their constituents' concerns regarding grant administration and
the P.L. 106-107 initiatives, and on states that were undertaking grant
management reforms of their own.
To obtain a better understanding of how grantees implement grants from
multiple sources, and how they are affected by grant administration
initiatives (including those responding to P.L. 106-107), we
purposefully selected a set of grantees who received federal funds from
three or more different federal agencies. Our objective in selecting
grantees was to obtain a diverse mix of grant recipients from grantee
communities of different sizes[Footnote 17] and geographical areas of
the United States. We used the Single Audit data for 2003, which
included recipients of federal assistance who received more than
$300,000 in that year, to develop a list of potential grantees from
which to select.[Footnote 18] In addition, when determining which
states to select, we focused on those states that had projects underway
or implemented to improve their grant management and potentially reduce
administrative burden on their grantees. We contacted grantee
candidates who fit our selection criteria to learn more about their
operations and their willingness to participate in our review.
We then selected 17 grantees--4 state governments, 3 tribal
governments, 2 county governments, 3 municipal governments, 2 nonprofit
organizations, 2 higher education institutions, and a nonacademic
research institution. Table 1 shows the mix of nonstate grantees
selected by size and geographical area.
Table 1: Description of Nonstate Grantees from Site Visits:
Grantee community: City/town;
Organization size: Small: X;
Organization size: Medium: [Empty];
Organization size: Large: [Empty];
U.S. geographic area: East: X;
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: [Empty].
Grantee community: City/town;
Organization size: Small: [Empty];
Organization size: Medium: X;
Organization size: Large: [Empty];
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: X;
U.S. geographic area: West: [Empty].
Grantee community: City/town;
Organization size: Small: [Empty];
Organization size: Medium: [Empty];
Organization size: Large: X;
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: X.
Grantee community: County;
Organization size: Small: X;
Organization size: Medium: [Empty];
Organization size: Large: [Empty];
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: X.
Grantee community: County;
Organization size: Small: [Empty];
Organization size: Medium: [Empty];
Organization size: Large: X;
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: X;
U.S. geographic area: West: [Empty].
Grantee community: Nonprofit (nonacademic);
Organization size: Small: X;
Organization size: Medium: [Empty];
Organization size: Large: [Empty];
U.S. geographic area: East: X;
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: [Empty].
Grantee community: Nonprofit (nonacademic);
Organization size: Small: [Empty];
Organization size: Medium: [Empty];
Organization size: Large: X;
U.S. geographic area: East: X;
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: [Empty].
Grantee community: Tribal;
Organization size: Small: X;
Organization size: Medium: [Empty];
Organization size: Large: [Empty];
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: X.
Grantee community: Tribal;
Organization size: Small: [Empty];
Organization size: Medium: X;
Organization size: Large: [Empty];
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: X;
U.S. geographic area: West: [Empty].
Grantee community: Tribal;
Organization size: Small: [Empty];
Organization size: Medium: [Empty];
Organization size: Large: X;
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: X.
Grantee community: College/university;
Organization size: Small: X;
Organization size: Medium: [Empty];
Organization size: Large: [Empty];
U.S. geographic area: East: [Empty];
U.S. geographic area: Central: X;
U.S. geographic area: West: [Empty].
Grantee community: College/university;
Organization size: Small: [Empty];
Organization size: Medium: [Empty];
Organization size: Large: X;
U.S. geographic area: East: X;
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: [Empty].
Grantee community: Other research institution;
Organization size: Small: [Empty];
Organization size: Medium: X;
Organization size: Large: [Empty];
U.S. geographic area: East: X;
U.S. geographic area: Central: [Empty];
U.S. geographic area: West: [Empty].
Grantee community: Category totals;
Organization size: Small: 5;
Organization size: Medium: 3;
Organization size: Large: 5;
U.S. geographic area: East: 5;
U.S. geographic area: Central: 4;
U.S. geographic area: West: 4.
Source: GAO.
[End of table]
We visited each grantee and interviewed staff involved in grant
administration. At the grantees, we met with individuals who prepared
grant applications, financial and performance reports, and requests for
payment. These included program, financial, and grant management staff.
We obtained descriptions of their processes to administer grants,
including the following steps:
* identifying relevant grant opportunities, including using
Grants.gov's find capability;
* applying for grants, including using Grants.gov's apply capability
and specific electronic application processes;
* being notified of grant awards;
* reviewing agencies' grant award documents and submitting necessary
grant acceptance documents to agencies;
* submitting progress and financial reports;
* requesting payments;
* preparing for and undergoing the annual Single Audit to meet OMB's A-
133 circular requirements; and:
* closing out grant awards.
In addition to their procedures, we discussed the effect of
streamlining initiatives that have been implemented and are planned, as
well as other aspects of grant administration where grantees would like
to see improvements. While the views obtained from these grantees are
not generalizable to the grantee community at large or grantees with
multiple funding sources, their views do encompass the range of
concerns that grantees obtaining funds from multiple sources have with
regard to standardizing and streamlining the process and are generally
in accord with the information obtained from other sources such as
association representatives.
To further examine grantee perspectives with regard to Grants.gov, we
also obtained and analyzed response data to an online survey which was
presented to a random sample of those viewing Grants.gov Web pages
during the period from June 2005 to early March 2006. The survey
contained items designed to obtain site visitors' views and
satisfaction with different elements of the Web site, such as
navigation, functionality, and quality of content. This period
encompasses the time in December 2005 when updates to the site's
functionality were performed. The timing of the presentation of the
survey was designed to ensure that visitors receiving the survey varied
in the number of Grants.gov Web pages they had viewed before the survey
appeared.
In order to examine the responses of visitors who were similar to those
in the grantee communities we visited, we restricted our analyses to
only those surveys where the respondents indicated on the survey that
they were from the grant community with a specific sector
affiliation.[Footnote 19] In all, there were 6,432 surveys included in
our analyses. The response rate for the online survey (i.e., the
proportion of visitors who completed the survey relative to the total
number of times it was presented to visitors) generally ranged from 7
to 9 percent on average over the time period we examined. We compared
the average ratings of survey respondents on selected survey items
before and after the changes to the site in December 2005 to assess
whether there had been any significant[Footnote 20] shifts in users'
views of the site. These survey respondents constitute a self-selected
group whose grantee status is unverified. While their responses are
sufficiently reliable for use as a supplemental source of information
concerning grantee views of the Grants.gov Web site, they cannot be
generalized to all those who were presented with the survey, all
visitors to Grants.gov, or the grantee community at large.
[End of section]
Appendix I Examples of Specific Areas Grantees Identified As Needing
Standardization and Streamlining:
Table 2: :
Grant phase: Find;
Area identified as needing standardization or streamlining: Need
advance information on grant opportunities to allow more time to
prepare application.
Grant phase: Find;
Area identified as needing standardization or streamlining: Current
grant finding tools do not filter out irrelevant grants well.
Grant phase: Find;
Area identified as needing standardization or streamlining: Access to
information on previous awardees and past accepted abstracts would be
helpful.
Grant phase: Find;
Area identified as needing standardization or streamlining: Eligibility
requirements are unclear in the grant announcement.
Grant phase: Apply;
Area identified as needing standardization or streamlining:
Registration process on Grants.gov is difficult and time- consuming.
Grant phase: Apply;
Area identified as needing standardization or streamlining: Application
time lines are too short and do not give the grantee enough time to
adequately establish partnerships and get applications internally
approved.
Grant phase: Apply;
Area identified as needing standardization or streamlining:
Applications are not completely electronic; some still submitted in
paper copy.
Grant phase: Apply;
Area identified as needing standardization or streamlining: Unclear
which Data Universal Numbering System (DUNS) number to use if the
institution has multiple DUNS numbers.
Grant phase: Apply;
Area identified as needing standardization or streamlining: Application
forms are not standardized across agencies.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: Late or
delayed award notifications create more work for grantees, and cause
problems with implementing the program and setting up the budget.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: Would like
information on rejections as soon as possible.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: No ability
to check the status of applications online.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: Would like
to receive application comments and review if rejected to better
prepare future applications.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: Would like
standard definitions for materials within award documents.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining: There are
substantial differences in the terms and conditions for different
grants and they should be standardized.
Grant phase: Notification of grant award;
Area identified as needing standardization or streamlining:
Certifications and assurances are required to be submitted too
frequently. Grantees would prefer to submit once per year since these
forms are generally the same.
Grant phase: Payment;
Area identified as needing standardization or streamlining: There are
multiple payment systems used by the various grant-making federal
agencies.
Grant phase: Payment;
Area identified as needing standardization or streamlining: Prefer
electronic systems with payment tracking abilities.
Grant phase: Payment;
Area identified as needing standardization or streamlining: Wire
transfers are difficult to identify because they contain complicated
transaction codes that do not relate to the grant.
Grant phase: Reporting;
Area identified as needing standardization or streamlining: Report and
budget definitions differ from agency to agency making it difficult to
create budgets and reports.
Grant phase: Reporting;
Area identified as needing standardization or streamlining: Some
agencies do not have an ability to track the status of reports. This
includes the ability to see when they are due and if the agency has
accepted the report.
Grant phase: Reporting;
Area identified as needing standardization or streamlining: Area
identified as needing standardization or streamlining: Report forms,
formats, and instructions differ substantially from agency to agency,
which causes confusion to grantees.
Source: GAO data.
[End of table]
[End of section]
Appendix II: Some States Have Taken Actions That Address Their Grant
Administration Issues:
In addition to identifying federal grant-making agencies' processes
that can be administratively burdensome, the nonstate grantees we
interviewed identified many of the same issues related to the state
agencies that provide them with federal funds through state grants. A
significant amount of federal grant funds is passed through the states
to nonprofits and other levels of government. Similar to the federal
government, states' different agencies can have different procedures
and systems in use. For example, some have developed electronic systems
while others continue to use paper processes.
Grantees mentioned several specific areas in which state agencies
lacked consistency in their administrative requirements. For example,
grantees said application and reporting forms sometimes varied. They
pointed out the need to use different systems to submit reports for
different state grants. Some programs are managed through online
systems, but sophistication of the systems varies within a state. One
grantee cited a state agency system that allowed the grantees to
access, complete, and submit reports online, but not save the form,
meaning that later changes required them to complete the whole form
again. Another said it would be helpful to have the forms mirror
federal forms as the federal forms are standardized. They also said
that terms and conditions vary across state agencies; and a few grant
coordinators pointed out the difficulty of ensuring that their various
program departments are complying because of the variations in the
administrative requirements laid out in the terms and conditions.
Further, payments are sometimes requested online and sometimes with
mailed-in requests. Some grantees also noted that their state takes
considerably longer than federal agencies to send out payments, in
fact, as long as 4 months.
Some states have established central policies and procedures that
provide consistent grants management procedures across all state
agencies awarding funds to local governments and nonprofit
organizations. For example, Tennessee has a policy to streamline the
reporting requirements for selected subrecipients of federal and state
grant monies and to achieve cost savings to both subrecipients and
state funding agencies.[Footnote 21] Prior to this policy,
subrecipients were required to submit revenue, expenditure, and budget
reports that were individualized and tailor-made to the needs of the
various state agencies, causing subrecipients to prepare a variety of
reports for each state agency to which it reported. In another example,
Texas has established statewide Uniform Grant Management Standards.
These standards were established to promote the efficient use of public
funds by providing awarding agencies and grantees a standardized set of
financial management procedures and definitions, by requiring
consistency among state grantor agencies in their dealings with
grantees, and by ensuring accountability for the expenditure of public
funds. State agencies are required to adhere to these standards when
administering grants and other financial assistance agreements with
cities, counties, and other political subdivisions of the state.
Several states have also established or are considering central offices
that can provide mechanisms for statewide oversight of grants
management. The Director of the Governor's Grants Office in Maryland
chairs a committee of state agency representatives from each cabinet
agency that meets several times during the year to improve inter-agency
grants management coordination and to help manage the work of the
Grants Office. This committee met in early February 2006 to discuss
effects on state grants management operations from filing electronic
grant applications on Grants.gov. In 2005, the Grants Office and local
officials also identified as problems with state awards grantee
requirements for more information on amount of funding, award criteria,
eligibility, match requirements, and contact information in state
notices of funding availability; a lack of standardized terminology,
forms, and processes on state application forms; and inconsistent
communication of federal, state, and local legal requirements. Texas
established a State Grants Team in the Office of the Governor that
coordinates statewide discussions of grants management issues. Other
states are exploring establishment of similar central grants management
offices or committees. In 2005, the Maryland Governor's Grants Office
said nine states have contacted it to obtain more information about the
office.
Several states are also developing and implementing new streamlined and
standardized grants management systems which are similar in intent to
the electronic system required by P.L. 106-107. Michigan, for example,
awarded a 3-year contract in October 2005 to build a statewide
electronic grants management system which will streamline all phases of
the process from notification of the state grant opportunity,
application for state grants, processing of these applications,
managing resulting grant awards, and closing out grants. The system
will provide a portal that provides a single source for grant posting
and grant searching across all state agencies and comprehensive
information about all phases of the grants process. Applicants will be
able to obtain information about the eligibility requirements of a
grant, apply online, and check the status of their application. State
staff will be able to manage the grant process electronically.
Texas has also begun development of a Grants.gov type project. The
state legislature directed in 2005 that the Department of Information
Resources, in cooperation with the Office of the Governor's State
Grants Team, develop an electronic system for state agency grants.
Objectives of the project include (1) providing a single location for
state agencies to post electronic summaries of state grant assistance
opportunities with the state agencies; (2) enabling a person to search
for state grant assistance programs provided by state agencies; (3)
allowing, when feasible, electronic submission of state grant
assistance applications; and (4) improving the effectiveness and
performance of state grant assistance programs. Texas anticipates the
project will streamline and simplify state grant assistance application
and reporting processes through standard data elements and a common
application form. A state official said the project database will
include information on federal, state, and private funding
opportunities.
[End of section]
Appendix III: GAO Contact and Staff Acknowledgments:
GAO Contact:
Stanley J. Czerwinski, (202) 512-6520, czerwinskis@gao.gov:
Acknowledgments:
In addition to the above contact, Faisal Amin, Thomas Beall, Alexandra
Dew, Cynthia Grant, Robert Hadley, Ernie Hazera, Thomas James, Justin
Jaynes, Hannah Laufe, Romonda McKinney, Kathryn O'Dea, Carol Patey,
Paul Posner, Amy Rosewarne, and Katherine Wulff also made key
contributions.
FOOTNOTES
[1] As reported in the Consolidated Federal Funds Report at http://
www.census.gov/govs/www/cffr.html (downloaded Mar. 10, 2006).
[2] As defined in the act, federal financial assistance includes
grants, cooperative agreements, loans, loan guarantees, insurance,
interest subsidies, and other forms of assistance. Pub. L. No. 106-107,
§4. The current streamlining efforts have focused on grants and
cooperative agreements. In our evaluation we have also limited our
assessment to grants and cooperative agreements and, for simplicity,
refer to them as grants.
[3] GAO, Grants Management: Additional Actions Needed to Streamline and
Simplify Processes, GAO-05-335 (Washington, D.C.: Apr. 18, 2005).
[4] Census Bureau, 2002 Census of Governments GC02-1(P) (Washington,
D.C.: 2002) and Department of Interior Quick Facts, http://www.doi.gov/
facts (downloaded Mar. 6, 2006).
[5] Lester M. Salamon, "The Resilient Sector: The State of Nonprofit
America," Snapshots, no. 25 (2002).
[6] GAO, Tax-Exempt Sector: Governance, Transparency, and Oversight Are
Critical for Maintaining Public Trust, GAO-05-561T (Washington, D.C.:
Apr. 20, 2005). An entity that believes it meets the requirements set
by Congress must apply to the Internal Revenue Service to obtain tax-
exempt status. Entities that are not required to apply include those
that are not private foundations and that have gross receipts of less
than $5,000 as well as churches and church-affiliated entities.
Churches are potentially eligible for federal grants.
[7] See, for example, the National Endowment for the Arts's "Literature
Fellowships: Translation Projects" or the National Endowment for the
Humanities's Fellowships and Faculty Research Awards.
[8] GAO-05-335.
[9] The two civilian systems are the Automated Standard Applications
for Payment System, operated by the Department of the Treasury's
Financial Management Service, and the Payment Management System,
operated by the Department of Health and Human Services.
[10] The Catalogue of Federal Domestic Assistance is a governmentwide
compendium of federal programs, projects, services, and activities that
provide assistance or benefits to the American public.
[11] http://www.ed.gov/fund/grant/find/edlite-forecast.html (downloaded
June 1, 2006).
[12] The survey asked respondents to rate Grants.gov on a variety of
Web site characteristics such as content, navigation, and
functionality. Our analysis covered the period from June 2005, when the
survey administered by the current contractor was initiated, through
early March 2006. We examined the responses to online survey questions
asking Grants.gov visitors to rate on a scale from 1 ("poor") to 10
("excellent") such things as the usefulness and organization of search
results, how they are presented, and the capability to narrow the
results to find the desired information. The average respondent
ratings, although falling between 6 and 7 on the scale, showed no
significant positive shift upward subsequent to the December search
engine updates. Regarding the question posed after the update on search
format enhancements, 20 percent of the grantee respondents indicated
that it was "better," another 21 percent said it was "on par," 12
percent said "worse" and the rest chose the "didn't notice" (29
percent) or "didn't use search" (16 percent) response categories.
(Figures do not total 100 percent due to rounding and a small number of
respondents not answering this item. See app. I for detail on our
analysis of these data.)
[13] When asked to rate the grant application process on a scale from 1
("very difficult") to10 ("very easy"), the average rating by grantee
respondents over the period we analyzed was 5.69, which suggests a
generally neutral position with regard to the ease or difficulty of the
application process. On the question of how likely it was that they
would use Grants.gov to submit an application, with a scale from 1
("not very likely") to 10 ("very likely"), the average rating was 7.63.
On both items, however, the average rating after the December upgrades
were implemented showed no significant improvement over the average
rating prior to the upgrades.
[14] The Grants.gov online survey asked visitors to rate both the
clarity of instructions for registering and the ease of registering on
a scale from 1 ("poor") to 10 ("excellent"). The average rating
provided by grantee responders placed both items in the interval of 6
to 7 with no significant shifts in these average ratings after the Web
site was upgraded in December 2005.
[15] GAO-05-335.
[16] GAO-05-335, 27.
[17] For governmental entities, we categorized size by their
population. For nongovernmental entities, we categorized size by the
amount of their federal funds received as reported in Single Audit
data.
[18] Nonfederal entities that expend $500,000 or more ($300,000 or more
in 2003) of federal awards in a year are required to obtain an annual
audit. The Federal Audit Clearinghouse maintains data reported in the
audit reports on federal funds received. We used this data to guide in
selecting grantees for our visits.
[19] The respondents included in our analyses chose one of the
following as the organization they represented: city government, county
government, state government, tribal organization, research institution
(nonacademic), academic institution (such as a college or university),
faith-based organization, nonprofit organization, public housing
authority, or for profit organization. We did not include respondents
who chose the "other" category or who indicated that they were
representing themselves.
[20] p-value < .05.
[21] State of Tennessee, Department of Finance and Administration,
Policy 03, "Uniform Reporting Requirements and Cost Allocation Plans
for Subrecipients of Federal and State Grant Monies." (Nashville,
Tennessee: December 1997) The policy applies to all private not-for-
profit entities subject to accounting and financial reporting standards
promulgated by the Financial Accounting Standards Board, and
governmental not-for-profit entities that are subject to Governmental
Accounting Standards Board standards.
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