In today’s uncertain political and budgetary climate, grants managers must improve transparency, streamline processes and leverage data-driven efficiencies.
While it may not be common knowledge, grants are the lifeblood of government services across the country. Over each of the last three budget years, approximately 20 percent of federal spending went toward grant funding. In FY 2016, this totaled $665 billion, an amount larger than that spent on federal contracts. Sadly, while I can trace the math for the spend, I am unable to say with conviction if those dollars are delivering the best possible outcomes for citizens.
A recent nationwide survey on the current state of grants management conducted by George Washington University, the National Grants Management Association and REI Systems confirmed that the kind of visibility and evaluation necessary to connect the dollars to outcomes is not happening today.
Of the 250-plus grants management professionals surveyed, 54 percent were frustrated by the bureaucracy and the inefficient tools and IT systems associated with managing grants. Another 44 percent of respondents were not confident that they could determine grant-making best practices despite years of working in the field. And, perhaps most disturbing, 31 percent were not confident they could evaluate the program impact and outcome of their grant funds at all.
The status quo must change. Such a lack of transparency and inability to measure performance outcomes only perpetuates the trust deficit that exists between the Americans and their government institutions. What is more, the status quo is untenable in today's uncertain political and budgetary climate.
The grants management world needs a new set of guiding principles and best practices. Extrapolating from our latest survey results and based on my firm’s long track record in the grants domain, I suggest the following five practices for improving the current state:
1. Introduce agile concepts to grant managers
Grants management effectiveness could be improved significantly by applying some of the core principles and values of the agile methodology. For example, the concept of cross-functional teams jointly accomplishing work would fundamentally alter the grants domain. Today, grants are usually assigned to an individual, who is expected to monitor them holistically from cradle to grave. In contrast, forming a cross-functional grant team that includes staff with the competencies required to administer and oversee a grant and then assigning that team a portfolio of grants would deliver significant benefits. It will reduce cycle times by minimizing outside dependencies, allow team members to adjust to the seasonal workloads typical with grant phases (e.g., application cycles), improve grantee satisfaction and increase federal employee engagement.
Another agile concept that should be adopted is incremental value delivery. Grant-making agencies can increase the pace of innovation in research and demonstration projects by requiring grantees to show incremental results and incorporating regular opportunities to inspect and adjust. That way, grants can be structured in a manner that supports grantees and permits flexibility. Doing so would promote evidence-based techniques to measure progress and reduce the risk of grant funding being squandered on initiatives that fail to deliver acceptable impact.
2. Establish a single, comprehensive grantee risk and performance database
Nationwide, tens of thousands of organizations receive federal grant funding -- many from multiple agencies. A single grantee performance database would allow grant-making agencies to consider the comprehensive, aggregated risk profile of a grantee before making an award. This insight would be particularly valuable if a struggling grantee receives funding from several sources -- an agency that notices a performance problem can alert others before they make their own award to the applicant. The system could function in parallel to the Past Performance Information Retrieval System that is used across government before a contract award is made.
Additionally, such a database would make it easier for grant makers to identify their “top 10” best performing grantees. Grant makers could meet with them and analyze their success factors and then share those best practices with grantees whose performance needs improvement. This would represent a marked change from current “best practice” gathering, which allows any grantee or agency to claim that its practices are “best” regardless of actual performance.
3. Build integrations between federal, state and local grant systems
State and local governments are by far the largest recipients of federal grant dollars. These vital funds are managed by a tangled web of systems, processes and data standards that blunt the positive impact of programs. Grant leaders have a tremendous opportunity to drive greater efficiency in the distribution and management of federal grant funds. Two interwoven initiatives can address this complex challenge head-on.
First, a federal/state/local grants data exchange must be created that standardizes grant-related documentation (i.e., application, award, post-award, etc.) into structured, machine-readable formats. While the DATA Act attempts this standardization with all federal funding, it is still being piloted and cannot be comprehensive given its scope.
Second, grant leaders must develop a common set of system-to-system connectors among the IT solutions agencies use to manage grants at different levels of government. This will simplify and automate the exchange of grants-related data per the standards created, reducing the burden of manual data sharing and reporting. Ultimately, this efficiency would increase the portion of spend that can go to grant purposes and reduce the part that goes to administration.
4. Establish a single payment platform across federal grant makers
Grants.gov was originally conceived to centralize how those seeking federal grant funding engage with the numerous agencies that issue grant funds. However, the scope of Grants.gov is currently limited to pre-award capabilities -- meaning that once an award decision is made, recipients must use a multitude of systems for reporting, compliance and award management.
A similar Grants.gov-like “doorway” and set of capabilities should be established for post-award processes. This proposed post-award functionality would allow grant recipients to submit a consolidated set of financials, progress reports and other grant submissions across federal grant makers. Instead of the burden of accessing multiple systems to request payment, a recipient could submit the required forms and associated documentation through one website. The grantee could then be intelligently routed to the appropriate federal grant agency and/or system for processing and resolution. This will improve visibility into compliance and allow creation of benchmarks on process cycles across the government to identify where it is most effectively implemented.
5. Create a consolidated audit process across government
The Office of Management and Budget issued uniform grants administrative guidance in December 2014 under 2 CFR 200. This guidance consolidates the requirements for grant-making agencies, eliminates the burdensome paper chase for reporting and raises the per-year threshold for audit from $500K to $750K to make more effective use of limited grant resources.
Although this part of the audit process consolidation is already in motion, there is an opportunity to go beyond simply consolidating regulations and instead integrating the back-end processes and IT systems for reviewing audit reports, generating insights and tracking findings. Leveraging modern, cloud-based platforms and creating a shared service that integrates with the Federal Clearinghouse, SAM.gov, and agency-specific award and performance data systems will help aggregate all relevant data necessary for agency-level analysis.
With such a system, the expertise required to generate insights can be centralized, and each agency can tailor the specific findings for communication and tracking at the grant program level. As data is centralized, relevant analyses can be made available to the public as well. Such an approach would reduce the aggregated government spend on IT systems, eliminate many of the excess advisory service contracts across government and improve both grantor and grantee accountability.
Lessons and progress
While a new set of grants management practices are needed, there are numerous examples of high-quality, efficient stewards of grant dollars. One such example is the Health Center Program, part of the Health Resources and Services Administration. Millions of the most vulnerable Americans rely on this program for their primary and preventative health care needs. In 2015, more than 24 million Americans were served by 1,400 HRSA-funded health centers across the nation.
The health centers are evaluated on a set of performance measures that emphasize health outcomes and the value of care delivered. These measures provide a balanced, comprehensive look at a health center’s services toward common conditions affecting underserved communities. For example, over 93 percent of these health centers met or exceeded at least one Healthy People 2020 goal for clinical performance in 2015. More than 68 percent have adopted a patient-centered model that improves primary care quality while lowering costs.
While constantly growing to meet increased demand since 2008, the Health Center Program used an agile approach to streamline its operations. It incorporated team-based workflow concepts to improve organizational effectiveness, deployed techniques such as a balanced scorecard to align the entire organization toward program priorities and made extensive use of data to drive its decision-making processes. I am hopeful that this type of leadership is replicated across government in the coming years.
This fall, REI Systems will conduct its annual grants management survey, again in partnership with George Washington University and the National Grants Management Association. However, unless our country’s grants management leaders act and begin to execute on the recommendations above, I would not expect to see substantial improvement in the survey results.
The grants management status quo cannot be sustained. Grant dollars sustain critical services for millions of Americans and provide much of the operational funding required to keep our state and local governments functioning. Implementing better policies, better management and better systems will not only better serve the country, but also play a small but meaningful role in restoring the public’s faith in government institutions.