Grants.gov
Additional Action Needed to Address Persistent Governance and Funding Challenges Gao ID: GAO-11-478 May 6, 2011In response to the Federal Financial Assistance Management Improvement Act of 1999, the Office of Management and Budget (OMB), among other things, deployed Grants.gov as the central grant identification and application portal for federal grant programs in 2003 and named the Department of Health and Human Services (HHS) its managing partner. As a result of funding and governance challenges-- such as untimely contributions, a lack of performance metrics, unclear lines of authority, and confusion over roles and responsibilities among Grants.gov's governance bodies-- that have adversely affected operations, GAO is required to examine (1) key factors HHS should consider when proposing a funding model for Grants.gov, and (2) how the Grants.gov governance bodies could address Grants.gov's previously identified governance challenges. To do this, GAO analyzed agency documents and interviewed officials at HHS, OMB, the Grants Executive Board (GEB), three case study agencies that manage similar E-Gov initiatives and three Grants.gov partner agencies.
In keeping with OMB's expectation to move toward a fee-for-service model, starting with the fiscal year 2010 budget, the Grants.gov contribution calculation changed to better reflect agencies' use of Grants.gov's services. However, GAO found that the calculation results in different contribution amounts for agencies with similar usage profiles because the calculation includes a measure of agency size that does not correlate well with an agency's use of Grants.gov. For example, usage data for the fiscal year 2011 contributions indicates that the Department of Housing and Urban Development (HUD, a large agency) posted 40 grant opportunities and received 4,817 applications through the Grants.gov Web site while the National Endowment for the Humanities (NEH, a small agency) posted 42 opportunities and received 4,577 applications. However, HUD's contribution is $414,422 while NEH's is $155,159. In addition, GAO found that the Grants.gov Program Management Office (PMO) does not track and report on certain key costs, limiting partner agencies' ability to understand the relationship between services received and amounts paid for that service. Grants.gov also does not charge partner agencies for all known costs, which can result in some agencies subsidizing other agencies' use of the system. Finally, Grants.gov continues to suffer from untimely agency contributions. While the other EGov initiatives GAO spoke with report similar challenges, some take mitigating steps that aid them in managing delays. They are: (1) depositing partner fees/contributions into multiyear appropriation accounts and (2) receiving some form of funds from their managing partners until partner agency contributions become available. Accountability and responsibility for Grants.gov performance among its governance bodies--the PMO, GEB and HHS's Office of the Chief Information Officer (OCIO)--remains unclear. Since GAO first reported on these issues in July 2009, some progress has been made clarifying roles and responsibilities, developing performance measures to track important aspects of system performance, and providing partner agencies with key performance and cost information. However, although the GEB and the OCIO continue to share responsibility for approving major changes to, and funding for, the Grants.gov system, there remains little evidence that the GEB-approved funding for Grants.gov is considered in HHS's review of Grants.gov as an IT investment as required by OMB guidance. In addition, Grants.gov's performance measures have not changed since GAO reported on them and still do not provide a clear picture of system performance. Finally, Grants.gov does not communicate some key performance and activity cost information with its partner agencies. A new federal grants governance model under OMB review would merge various Grants.gov governance entities and serve as the federal grants advisory body responsible for establishing the direction for and coordinating all governmentwide grants initiatives, including Grants.gov. As a preliminary, concept document, it is understandable that it contains few implementation details; however, the proposal lacks even an overview of several critical elements, such as how grants initiatives would be managed as IT investments. GAO is making four recommendations to HHS aimed at improving Grants.gov's funding calculation, cost tracking, and annual and strategic plan; and knowledgesharing with other E-Gov initiatives. HHS generally agreed with our findings and recommendations.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Stanley J. Czerwinski Team: Government Accountability Office: Strategic Issues Phone: (202) 512-6520GAO-11-478, Grants.gov: Additional Action Needed to Address Persistent Governance and Funding Challenges
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United States Government Accountability Office:
GAO:
Report to Congressional Committees:
May 2011:
Grants.Gov:
Additional Action Needed to Address Persistent Governance and Funding
Challenges:
GAO-11-478:
GAO Highlights:
Highlights of GAO-11-478, a report to congressional committees.
Why GAO Did This Study:
In response to the Federal Financial Assistance Management Improvement
Act of 1999, the Office of Management and Budget (OMB), among other
things, deployed Grants.gov as the central grant identification and
application portal for federal grant programs in 2003 and named the
Department of Health and Human Services (HHS) its managing partner. As
a result of funding and governance challenges-”such as untimely
contributions, a lack of performance metrics, unclear lines of
authority, and confusion over roles and responsibilities among
Grants.gov‘s governance bodies-”that have adversely affected
operations, GAO is required to examine (1) key factors HHS should
consider when proposing a funding model for Grants.gov, and (2) how
the Grants.gov governance bodies could address Grants.gov‘s previously
identified governance challenges. To do this, GAO analyzed agency
documents and interviewed officials at HHS, OMB, the Grants Executive
Board (GEB), three case study agencies that manage similar E-Gov
initiatives and three Grants.gov partner agencies.
What GAO Found:
In keeping with OMB‘s expectation to move toward a fee-for-service
model, starting with the fiscal year 2010 budget, the Grants.gov
contribution calculation changed to better reflect agencies‘ use of
Grants.gov‘s services. However, GAO found that the calculation results
in different contribution amounts for agencies with similar usage
profiles because the calculation includes a measure of agency size
that does not correlate well with an agency‘s use of Grants.gov. For
example, usage data for the fiscal year 2011 contributions indicates
that the Department of Housing and Urban Development (HUD, a large
agency) posted 40 grant opportunities and received 4,817 applications
through the Grants.gov Web site while the National Endowment for the
Humanities (NEH, a small agency) posted 42 opportunities and received
4,577 applications. However, HUD‘s contribution is $414,422 while NEH‘
s is $155,159. In addition, GAO found that the Grants.gov Program
Management Office (PMO) does not track and report on certain key
costs, limiting partner agencies‘ ability to understand the
relationship between services received and amounts paid for that
service. Grants.gov also does not charge partner agencies for all
known costs, which can result in some agencies subsidizing other
agencies‘ use of the system. Finally, Grants.gov continues to suffer
from untimely agency contributions. While the other E-Gov initiatives
GAO spoke with report similar challenges, some take mitigating steps
that aid them in managing delays. They are: (1) depositing partner
fees/contributions into multiyear appropriation accounts and (2)
receiving some form of funds from their managing partners until
partner agency contributions become available.
Accountability and responsibility for Grants.gov performance among its
governance bodies-”the PMO, GEB and HHS‘s Office of the Chief
Information Officer (OCIO)-”remains unclear. Since GAO first reported
on these issues in July 2009, some progress has been made clarifying
roles and responsibilities, developing performance measures to track
important aspects of system performance, and providing partner
agencies with key performance and cost information. However, although
the GEB and the OCIO continue to share responsibility for approving
major changes to, and funding for, the Grants.gov system, there
remains little evidence that the GEB-approved funding for Grants.gov
is considered in HHS‘s review of Grants.gov as an IT investment as
required by OMB guidance. In addition, Grants.gov‘s performance
measures have not changed since GAO reported on them and still do not
provide a clear picture of system performance. Finally, Grants.gov
does not communicate some key performance and activity cost
information with its partner agencies.
A new federal grants governance model under OMB review would merge
various Grants.gov governance entities and serve as the federal grants
advisory body responsible for establishing the direction for and
coordinating all governmentwide grants initiatives, including
Grants.gov. As a preliminary, concept document, it is understandable
that it contains few implementation details; however, the proposal
lacks even an overview of several critical elements, such as how
grants initiatives would be managed as IT investments.
What GAO Recommends:
GAO is making four recommendations to HHS aimed at improving
Grants.gov‘s funding calculation, cost tracking, and annual and
strategic plan; and knowledge-sharing with other E-Gov initiatives.
HHS generally agreed with our findings and recommendations.
View [hyperlink, http://www.gao.gov/products/GAO-11-478] or key
components. For more information, contact Stanley J. Czerwinski at
(202) 512-6806 or czerwinskis@gao.gov.
[End of section]
Contents:
Letter:
Background:
Grants.gov Funding Model Raises Issues about How Costs Are Distributed
among Users and the Lack of Effective Strategies to Manage Recurring
Collection Delays:
Accountability and Responsibility for Grants.gov Performance among the
Grants.gov Governance Entities Remains Unclear:
New Federal Grants Governance Model Is Under OMB Review:
Conclusions:
Recommendations for Executive Action:
Agency Comments & Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Benefits.gov:
Appendix III: Disaster Assistance Improvement Program (DAIP):
Appendix IV: Integrated Acquisition Environment (IAE) Initiative:
Appendix V: Comments from the Department of Health and Human Services:
Appendix VI: GAO Contacts and Staff Acknowledgments:
Table:
Table 1: NEH and HUD Fiscal Year 2011 Grants.gov Contribution Amounts
by Calculation Component:
Table 2: Benefits.gov Expected Agency Contributions for Fiscal Year
2011:
Table 3: Disaster Assistance Improvement Program Expected Agency
Contributions for Fiscal Years 2011 and 2012:
Table 4: Integrated Acquisition Environment Initiative Expected Agency
Contributions for Fiscal Year 2011:
Figures:
Figure 1: Entities Involved in the Federal Grants Pre-Award Stage of
Grants Life Cycle:
Figure 2: Grants.gov Contribution Calculation:
Figure 3: Components of Agency Contribution as a Percentage of Fiscal
Year 2011 Total Budget:
Figure 4: Grants.gov Collection Timing, Fiscal Year 2009 and Fiscal
Year 2010:
Abbreviations:
CCB: Change Control Board:
CFO: Chief Financial Officer:
CIO: Chief Information Officer:
CNCS: Corporation for National and Community Service:
CPIC: Capital Planning and Investment Control:
DAIP: Disaster Assistance Improvement Program:
DHS: Department of Homeland Security:
DOE: Department of Energy:
DOI: Department of the Interior:
DOL: Department of Labor:
E-Gov: Electronic Government:
FEMA: Federal Emergency Management Agency:
FPDS: Federal Procurement Data System:
FY: Fiscal Year:
GEB: Grants Executive Board:
GPC: Grants Policy Committee:
GSA: General Services Administration:
HHS: Department of Health and Human Services:
HUD: Department of Housing and Urban Development:
IAE: Integrated Acquisition Environment:
IT: information technology:
MOU: Memorandum of Understanding:
NEH: National Endowment for the Humanities:
OCIO: Office of the Chief Information Officer:
OMB: Office of Management and Budget:
PMO: Program Management Office:
[End of section]
United States Government Accountability Office:
Washington, DC 20548:
May 6, 2011:
The Honorable Tom Harkin:
Chairman:
The Honorable Richard Shelby:
Ranking Member:
Subcommittee on Labor, Health and Human Services, Education, and
Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Denny Rehberg:
Chairman:
The Honorable Rosa Delauro:
Ranking Member:
Subcommittee on Labor, Health and Human Services, Education, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
Grants.gov[Footnote 1] serves as the central grant identification and
application portal for more than 1,000 federal grant programs that
fund approximately $500 billion in grants from 26 grant-making
agencies for activities such as training, research, planning,
construction, and the provision of services in areas such as health
care, education, transportation, and homeland security. However, as we
have previously reported, the Department of Health and Human Services
(HHS), Grants.gov's managing partner, has faced funding and governance
challenges that have adversely affected Grants.gov operations.
[Footnote 2] For example, we said that Grants.gov's challenges had in
some cases led to late or incomplete applications and lost
opportunities for both grantees and the population that may have
benefited from the grantee's programs and services. In March 2009, the
Office of Management and Budget (OMB) also noted that the Grants.gov
system had experienced periods of noticeably degraded performance and
described the system as being at serious risk for failure. Concerned
about the impending influx of Recovery Act-related grant applications,
OMB instructed federal grant-making agencies with viable alternatives
to identify temporary, alternate methods for accepting grant
applications and in April 2009, instructed the agencies to cover the
additional costs of urgent improvements to the system.[Footnote 3] In
a July 2009 report, we recommended that the Director of OMB work with
HHS to develop Grants.gov system performance measures, guidance
clarifying the governance structure, a structured means for applicant
input, and uniform policies for processing grant applications. OMB and
HHS generally agreed with our recommendations; while they have taken
some steps to address them, they have not yet fully implemented the
recommendations.
This report responds to a mandate to examine the Grants.gov system and
make recommendations to improve system management, focusing on a
business model that provides an adequate, reliable funding stream and
the appointment of a unified administrative body that is delegated
both control and resources. To accomplish this, we evaluated (1) key
factors HHS should consider when proposing a funding model for
Grants.gov, and (2) how the Grants.gov governance bodies could address
Grants.gov's previously identified governance challenges. In order to
address both objectives, we reviewed available reports and documentary
evidence and conducted interviews with relevant officials from OMB,
HHS, and the Grants Executive Board (GEB). To obtain further
information for both objectives, we also selected three case study
agencies--the Department of Labor (DOL), the Department of Homeland
Security (DHS), and the General Services Administration (GSA)--all of
which are managing partners of other E-Government (E-Gov) initiatives
identified by OMB as similar to Grants.gov. To draw on the experiences
of these three managing partners, we reviewed available reports and
documentary evidence and conducted interviews at DOL - managing
partner of Benefits.gov (see appendix II); DHS/Federal Emergency
Management Agency (FEMA) - managing partner of Disaster Assistance
Improvement Program (DAIP) (see appendix III) and GSA - managing
partner of Integrated Acquisition Environment (IAE) (see appendix IV).
Each of these initiatives have funding and governance models similar
to those of Grants.gov. In addition, in order to obtain more
information from the perspective of Grants.gov partner agencies, we
interviewed relevant officials at the Departments of Homeland
Security, Labor, and the Interior.
We conducted this performance audit from April 2010 to May 2011 in
accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our
findings and conclusions based on our audit objectives. We believe
that the evidence obtained provides a reasonable basis for our
findings and conclusions based on our audit objectives.
Background:
Over 1,000 federal grant programs are disbursed and managed by 26
federal agencies and other federal grant-making organizations. Because
of concerns about the burden on grantees of the varying requirements
imposed by these different grant programs, Congress enacted the
Federal Financial Assistance Management Improvement Act of 1999,
commonly referred to by the grants community and OMB as Public Law 106-
107.[Footnote 4] Among other things, the act also required OMB to
direct, coordinate, and assist agencies in developing and implementing
a common application and reporting system that included electronic
processes with which a nonfederal entity can apply for multiple grant
programs that serve similar purposes but are administered by different
federal agencies.[Footnote 5] In response to Public Law 106-107, among
other things, OMB created Grants.gov (initially known as e-Grants),
and included it among the initiatives designated in OMB's 2002 E-
Government Strategy.[Footnote 6] As these programs were initiated
shortly after the E-Government Act of 2002 became law,[Footnote 7] we
refer to them in this report as legacy E-Gov initiatives. The
Grants.gov Web site was deployed with both the "Find" and "Apply"
tools on October 31, 2003, and was meant, in part, to improve the
announcement and application stages (together known as the pre-award
stage) of the grant-making process for grantees. OMB has directed that
almost all federal discretionary grant opportunities should be posted
to the Grants.gov Web site; applicants can search for grant
opportunities by agency or across agencies using the "Find" mechanism.
Many grant announcements include a link to application forms and
instructions.
Grants.gov Governance:
As with all legacy E-Gov initiatives, OMB established a management
structure to oversee the initiative and to facilitate a collaborative
working environment for Grants.gov. This management structure included
a managing partner agency--HHS--to manage the system and to coordinate
agency involvement in managing and developing procedures supporting
the use of the system. The Grants.gov oversight and management
structure also includes the GEB, and the Grants.gov Program Management
Office (PMO).
Managing Partner Agency. As managing partner for Grants.gov, HHS is
responsible for managing Grants.gov. HHS is also responsible for
managing Grants.gov as an information technology (IT) investment
through HHS's Office of the Chief Information Officer (OCIO). The OCIO
is required to manage Grants.gov through HHS's capital programming and
budget process. The HHS Office of Grants provides departmental input
to Grants.gov and other governmentwide grant initiatives, and key
leadership and oversight on Grants.gov management and implementation.
Grants Executive Board (GEB). The GEB was established in 2002 at HHS's
request to help coordinate agency involvement in managing Grants.gov
and consists of grant-making officials from the 26 partner agencies.
The GEB's role is to provide strategic leadership and resources to
Grants.gov, including reviewing implementation and operational
policies, the Grants.gov budget, and the level of financial
contribution of each partner agency. The GEB charter states that it
"will serve as an authoritative voice for the grant-making agencies,
providing a governance body that can vote on proposals and
deliverables as representatives of the grant-making agencies."
Grants.gov Program Management Office (PMO). Day-to-day management of
the Grants.gov initiative and its budget is the responsibility of the
Grants.gov PMO, which is located within HHS and is currently staffed
by 10 employees plus supporting contractor personnel. The PMO is also
responsible for managing the process to update the standard grant
application forms (SF 424 series) approved by OMB for governmentwide
use.
In addition, the Grants Policy Committee (GPC), established by the
Chief Financial Officers (CFO) Council, has overall responsibility for
implementing Public Law 106-107. One of its goals is to "simplify
federal financial assistance processes to make them more uniform
across agencies and eliminate unnecessary burdens on applicants,
grantees, and federal agencies." Specifically, the Grants Policy
Committee is to, among other things, coordinate all federal grants
policy recommendations submitted to OMB, recommend uniform forms and
formats for grant applications and post-award reports, recommend
standard and streamlined federal-to-grantee business processes,
facilitate greater community input and outreach in streamlining
federal financial assistance, and collaborate with the GEB on
Grants.gov and other streamlining issues. The committee's pre-award
working group is responsible for developing policy proposals for
streamlining and simplifying the pre-award stage of the grants life
cycle. Figure 1 illustrates the various entities involved in the grant
pre-award stages at the federal level.
Figure 1: Entities Involved in the Federal Grants Pre-Award Stage of
Grants Life Cycle:
[Refer to PDF for image: illustration]
Grants Executive Board[A]:
Grant-making officials from the 26 partner agencies comprise board and
policy committee.
Example:
Leadership and resources:
Managing partner agency (HHS)[A]: IT management:
Grants.gov Program Management Office (PMO)[B];
Coordination: occurs between Grants Executive Board and:
OMB;
Grants Policy Committee[A]:
PL 106-107 Pre-award working group[B].
Source: GAO analysis of OMB data.
[A] Governance body.
[B] Execution team.
[End of figure]
Grants.gov Funding:
The legacy E-Gov initiatives are funded using a variety of approaches,
including partner agency contributions, fee-for-service, direct
payments from the managing partner agency, or some combination of
these. OMB defines contribution and fee-for-service models as follows:
* Contribution model: Commitments of funding and/or in-kind services
provided by partner agencies to initiative managing partner agencies
in support of developing, implementing, and/or migrating to E-Gov
common solutions. Contribution amounts are determined annually through
collaborative, interagency E-Gov initiative governance structures and
subject to approval by OMB.
* Fee-for-service model: A transfer of funds by partner agencies to
initiative service providers in exchange for services rendered by the
initiative service providers. The amounts are typically based on a
transaction/usage-based fee structure (e.g., for payroll processing,
payroll service providers base their service fees on the number of
employees at a customer agency). Initiative service providers use fees
collected from partner agencies to cover ongoing operational costs,
perform routine maintenance, and support their customer base.
In June 2004, OMB issued a memo detailing the Grants.gov funding model
and partner agencies' Grants.gov contributions, as approved by the
GEB.[Footnote 8] Grants.gov is funded by payments from its 26 partner
agencies. Memoranda of Understanding (MOUs) between the Grants.gov PMO
and the partner agencies establish the amount and timing of the
contributions to be made and the Grants.gov services to be provided.
Annually, the GEB votes on both the Grants.gov budget and the
calculation that will be used to determine each agency's payment.
Grants.gov Funding Model Raises Issues about How Costs Are Distributed
among Users and the Lack of Effective Strategies to Manage Recurring
Collection Delays:
Grants.gov's Funding Model Attempts to Better Align Contributions with
Agency Use:
In keeping with OMB's expectation for legacy E-Gov initiatives to move
toward a fee-for-service model, starting with the fiscal year 2010
budget, the Grants Executive Board (GEB) approved changes to the
Grants.gov contribution calculation to better reflect agencies' use of
Grants.gov's services. Grants.gov partner agency charges are based on
three factors (see figure 2):
* charges based on agency size comprise 20 percent of the Grants.gov
budget,
* charges based on the number of grant opportunities posted by an
agency comprise 40 percent of the Grants.gov budget, and:
* charges based on the number of grant applications submitted comprise
40 percent of the Grants.gov budget.
Figure 2: Grants.gov Contribution Calculation:
[Refer to PDF for image: illustration]
Agency contribution:
equals:
Agency size[A] (20% of Budget);
plus:
Percentage of Grants posted (40% of Budget);
plus:
Percentage of Applications submitted (40% of Budget).
Source: GAO analysis of HHS data.
[A] Agency size, as measured in the contribution calculation, is based
on an agency's total dollar value of discretionary grants.
[End of figure]
To determine agency size for the purposes of Grants.gov, partner
agencies are divided into five groups based on an agency's total
dollar value of discretionary grants: extra small, small, medium,
large, and extra large. The component of an agency's contribution
based on agency size is the same for all agencies within a size
category. For example, for fiscal year 2011 the agency size component
of an agency's contribution is $50,000 for all small agencies and
$200,000 for all large agencies.[Footnote 9]
Two measures of Web site usage comprise the other two components of
the contribution calculation: (1) an agency's share of total grant
opportunities posted on Grants.gov, and (2) an agency's share of total
grant applications submitted through Grants.gov. According to fiscal
year 2007 data--on which the GEB based its fiscal year 2011
calculations--agencies posted from 3 to 1,167 grant opportunities on
Grants.gov. Grant applications submitted through Grants.gov ranged
from 13 to 107,961.[Footnote 10]
The Grants.gov Contribution Calculation Results in Different
Contribution Amounts for Agencies with Similar System Use:
The Grants.gov contribution calculation results in different
contribution amounts for agencies with similar usage profiles. For
example, under the fiscal year 2011 contribution calculation, the
Department of Housing and Urban Development (categorized as a large
agency for the purposes of Grants.gov) posted 40 grant opportunities,
received 4,817 applications through the Grants.gov Web site, and paid
$414,422. However, the National Endowment for the Humanities
(categorized as a small agency for the purposes of Grants.gov) posted
42 grant opportunities, received 4,577 applications through the Web
site, and paid $155,159. As shown in table 1, the majority of this
difference is due to the agency size component of the funding
calculation. NEH's agency size component is $50,000; HUD's is $200,000.
Table 1: NEH and HUD Fiscal Year 2011 Grants.gov Contribution Amounts
by Calculation Component:
Agency: NEH;
Agency size (% of contribution prior to caps): $50,000; (20%);
Number of grants posted (% of contribution prior to caps): $69,298;
(28%);
Number of applications submitted (% of contribution prior to caps):
$131,933; (53%);
Total fiscal year 2011 contribution prior to the application of caps:
$251,231;
Final fiscal year 2011 contribution after the application of caps:
$155,159.
Agency: HUD;
Agency size (% of contribution prior to caps): $200,000; (49%);
Number of grants posted (% of contribution prior to caps): $65,998;
(16%);
Number of applications submitted (% of contribution prior to caps):
$139,205; (34%);
Total fiscal year 2011 contribution prior to the application of caps:
$405,203;
Final fiscal year 2011 contribution after the application of caps:
$414,422.
Source: GAO analysis of HHS data.
Note: The contribution calculation caps the year-over-year increase in
contribution amounts for agencies classified as extra small and small
to 20 percent. Component contribution amounts do not add up to the
final contribution amounts due to the application of these caps on
small and extra small agency contributions.
[End of table]
According to the GEB, the agency size factor is one of three factors
used as a proxy for total agency Grants.gov system utilization. The
GEB stated that gauging actual system use would require a longitudinal
analysis of factors, including opportunities posted, applications
submitted, and applications received. HHS and PMO officials told us
that they consider agency size to correlate with an agency's use of
the Grants.gov system; however, we found only a moderate correlation
between partner agencies' use of the Grants.gov Web site (as defined
by the Grants.gov contribution calculation) and agency size. When we
analyzed fiscal year 2011 Grants.gov data for agency size, grants
posted, and applications submitted, we found no clear pattern of
increased system usage as agency size increased. While the average
number of grants posted and applications accepted was the lowest for
extra small agencies and highest for HHS (the only extra large
agency), the relationship was inconsistent for small, medium, and
large agencies. That is, some medium agencies have higher usage rates--
under both measures--than some large agencies.
Further, for some agencies, agency size--the measure with the weakest
link to system use--is the largest driver of an agency's contribution.
As noted above, while charges based on the agency size component
comprise only 20 percent of the total Grants.gov budget, they are
often a larger or smaller percentage of a particular agency's
contribution to Grants.gov. As shown in figure 3, 8 of the 26 partner
agencies paid more due to their size than for Web site usage costs in
fiscal year 2011.[Footnote 11] Overall, partner agencies' payments
based on size as a percentage of their total fiscal year 2011
contribution ranged from 6 percent for HHS to 83 percent for
Corporation for National and Community Service (CNCS).
Figure 3: Components of Agency Contribution as a Percentage of Fiscal
Year 2011 Total Budget:
[Refer to PDF for image: stacked vertical bar graph]
Percentage of total FY 2011 uncapped contribution:
Agency: HHS;
Size fee as percentage of total: 6%;
Posting fee as percentage of total: 36%;
Submission fee as percentage of total: 58%.
Agency: DoI;
Size fee as percentage of total: 12%;
Posting fee as percentage of total: 83%;
Submission fee as percentage of total: 5%.
Agency: DoD;
Size fee as percentage of total: 15%;
Posting fee as percentage of total: 43%;
Submission fee as percentage of total: 42%.
Agency: NEA;
Size fee as percentage of total: 16%;
Posting fee as percentage of total: 17%;
Submission fee as percentage of total: 68%.
Agency: DoJ;
Size fee as percentage of total: 17%;
Posting fee as percentage of total: 36%;
Submission fee as percentage of total: 47%.
Agency: USDA;
Size fee as percentage of total: 19%;
Posting fee as percentage of total: 44%;
Submission fee as percentage of total: 37%.
Agency: NEH;
Size fee as percentage of total: 20%;
Posting fee as percentage of total: 28%;
Submission fee as percentage of total: 53%.
Agency: EPA;
Size fee as percentage of total: 21%;
Posting fee as percentage of total: 61%;
Submission fee as percentage of total: 18%.
Agency: DoE;
Size fee as percentage of total: 23%;
Posting fee as percentage of total: 35%;
Submission fee as percentage of total: 42%.
Agency: NASA;
Size fee as percentage of total: 25%;
Posting fee as percentage of total: 71%;
Submission fee as percentage of total: 4%.
Agency: State;
Size fee as percentage of total: 26%;
Posting fee as percentage of total: 55%;
Submission fee as percentage of total: 19%.
Agency: DoED;
Size fee as percentage of total: 29%;
Posting fee as percentage of total: 35%;
Submission fee as percentage of total: 36%.
Agency: DoC;
Size fee as percentage of total: 31%;
Posting fee as percentage of total: 39%;
Submission fee as percentage of total: 30%.
Agency: IMLS;
Size fee as percentage of total: 40%;
Posting fee as percentage of total: 23%;
Submission fee as percentage of total: 37%.
Agency: USAID;
Size fee as percentage of total: 41%;
Posting fee as percentage of total: 57%;
Submission fee as percentage of total: 2%.
Agency: NSF;
Size fee as percentage of total: 42%;
Posting fee as percentage of total: 48%;
Submission fee as percentage of total: 10%.
Agency: NARA;
Size fee as percentage of total: 47%;
Posting fee as percentage of total: 44%;
Submission fee as percentage of total: 9%.
Agency: HUD;
Size fee as percentage of total: 49%;
Posting fee as percentage of total: 17%;
Submission fee as percentage of total: 34%.
Agency: VA;
Size fee as percentage of total: 56%;
Posting fee as percentage of total: 37%;
Submission fee as percentage of total: 7%.
Agency: DoL;
Size fee as percentage of total: 58%;
Posting fee as percentage of total: 22%;
Submission fee as percentage of total: 20%.
Agency: DOT;
Size fee as percentage of total: 60%;
Posting fee as percentage of total: 23%;
Submission fee as percentage of total: 17%.
Agency: DHS;
Size fee as percentage of total: 62%;
Posting fee as percentage of total: 19%;
Submission fee as percentage of total: 19%.
Agency: Treasury;
Size fee as percentage of total: 63%;
Posting fee as percentage of total: 25%;
Submission fee as percentage of total: 12%.
Agency: SSA;
Size fee as percentage of total: 64%;
Posting fee as percentage of total: 13%;
Submission fee as percentage of total: 23%.
Agency: SBA;
Size fee as percentage of total: 73%;
Posting fee as percentage of total: 14%;
Submission fee as percentage of total: 13%.
Agency: CNCS;
Size fee as percentage of total: 83%;
Posting fee as percentage of total: 16%;
Submission fee as percentage of total: 1%.
Source: GAO Analysis of HHS data.
Note: Analysis based on fiscal year 2011 agency contribution amounts
prior to the application of the fiscal year 2011 caps. The 26 agencies
in figure 3 are the: Department of Health and Human Services (HHS),
Department of the Interior (DoI), Department of Defense (DoD),
National Endowment for the Arts (NEA), Department of Justice (DoJ),
United States Department of Agriculture (USDA), National Endowment for
the Humanities (NEH), Environmental Protection Agency (EPA),
Department of Energy (DoE), National Aeronautics and Space
Administration (NASA), Department of State (State), Department of
Education (DoED), Department of Commerce (DoC), Institute of Museum
and Library Services (IMLS), United States Agency for International
Development (USAID), National Science Foundation (NSF), National
Archives and Records Administration (NARA), Department of Housing and
Urban Development (HUD), Department of Veterans Affairs (VA),
Department of Labor (DoL), Department of Transportation (DOT),
Department of Homeland Security (DHS), Department of the Treasury
(Treasury), Social Security Administration (SSA), Small Business
Administration (SBA), and Corporation for National and Community
Service (CNCS).
[End of figure]
According to federal cost accounting standards, agencies should assign
costs as closely as possible based on the amount of services or goods
provided.[Footnote 12] These standards list an order of preference for
three cost assignment methods that should be used: (1) direct tracing
of costs wherever economically feasible, (2) assigning costs on a
cause-and-effect basis, or (3) allocating costs on a reasonable and
consistent basis when not economically feasible to assign costs
directly or on a cause-and-effect basis. Further, to the extent that
agencies receive goods and services from HHS under the Economy Act,
the amount paid must be based on the actual cost of goods or services
provided.[Footnote 13] The Economy Act is the authority cited by most
agencies as the legal basis for transferring funds to HHS for
Grants.gov services. In 2008, we reported that better allocation of
system costs among users also promotes efficiency and perceived
equity.[Footnote 14] We said that requiring a beneficiary to pay for
the services they receive promotes economic efficiency and that fees
not based on use may result in under-or overcharging for services
received and results in cross-subsidization between system users.
Grants.gov Does Not Track and Report on Certain Key Costs and Does Not
Charge Agencies for All Known Costs:
The Grants.gov PMO tracks costs for internal management purposes to
ensure contract compliance and that program activities stay within GEB
approved funding levels; however, it does not report costs by key
program activities to its partner agencies, and it does not track or
report on costs attributable to each partner agency. For example, the
Grants.gov PMO updates GEB members at bimonthly board meetings with
spending information on contracted activities and staff salaries but,
according to HHS, detailed spending information by program activity or
agency-specific requests are not provided. Absent this information,
partner agencies' ability to link the services they received to their
Grants.gov payments is limited, and the Grants.gov PMO cannot easily
justify proposed increases to the Grants.gov budget or explain how
changes in agency contributions--either stemming from changes in the
contribution calculation or the total budget amount--align with
services agencies will receive. One partner agency said that the
inability to link services received to their Grants.gov payments
causes delays in processing the Grants.gov MOU because the agency's
MOU approval procedures require a documented link between costs
incurred and payments made. The Grants.gov PMO told us that if asked
to do so, they could track activity costs in greater detail, but that
they are not set up to track costs by agency.
The type of cost tracking in our case study initiatives varied. For
example, the Benefits.gov PMO prepares a strategic plan for partner
agencies that links activities to system goals and costs. According to
the Benefits.gov PMO, this type of reporting gives partner agencies
the information to decide what system activities they would have to
curtail to achieve lower payments. Integrated Acquisition Environment
(IAE) officials we spoke with said that in addition to tracking costs
by each of the eight systems they manage, they also provide annual
reports describing the services partner agencies receive as well as
the cost savings they realize through their participation in the IAE
systems. None of the initiatives we spoke with, however, track costs
by agency.
Further, although Grants.gov tracks the costs of providing on-line
grant application forms to partner agencies for internal management
purposes, it does not charge partner agencies commensurate with their
use of these forms. Grant application packages can include multiple
custom or standard on-line grant application forms, which the PMO
creates and maintains at the request of partner agencies. According to
the Grants.gov PMO, the cost of developing and maintaining these forms
is increasing. Development of each custom form creates additional cost
for the PMO, and Grants.gov incurs maintenance costs (e.g., license
fees) for all active forms. Currently, each partner agency is allowed
two new forms each year. However, some partner agencies request and
receive more than two forms per year; others request new forms but
also request that the old forms remain active. Since partner agencies'
payments do not change based on their form usage, partner agencies
that request fewer than two new forms each year subsidize agencies
that request more than two forms. The PMO reports that the increasing
cost of forms puts pressure on its ability to deliver other required
services. The PMO said that it would like to include a measure of form
activity in the contribution calculation, so that partner agencies
with more form activity pay a higher share of system costs. The PMO
has discussed this informally with members of the GEB but has not made
a proposal to capture forms activity in the contribution calculation.
Lastly, because the Grants.gov contribution calculation does not
account for all of Grants.gov's activity costs, it is unclear whether
the weights assigned to the three measures in the contribution
calculation actually represent the relative cost of each activity. For
example, as mentioned above, the measure for posting grant
opportunities accounts for 40 percent of the Grants.gov budget in the
contribution calculation; however, the cost data necessary to make
this linkage is not tracked or reported. Consequently, we found little
evidence that the PMO spends 40 percent of its resources related to
posting activities.
Grants.gov PMO Lacks Effective Strategies to Manage Known, Recurring
Collection Delays:
Grants.gov continues to receive the bulk of its funding late in the
fiscal year. As we have previously reported, this has adversely
affected Grants.gov operations. As shown in figure 4, Grants.gov
received the majority of its fiscal year 2009 and fiscal year 2010
agency contributions 7 to 9 months into the fiscal year. In addition,
HHS and OMB have cited delayed funding as a management risk to
Grants.gov.[Footnote 15] In 2009, according to the PMO, delayed
funding nearly resulted in Grants.gov suspending operations. As we
have previously reported, this funding pattern is not unusual for
Grants.gov specifically or for legacy E-Gov initiatives in general.
[Footnote 16]
Figure 4: Grants.gov Collection Timing, Fiscal Year 2009 and Fiscal
Year 2010:
[Refer to PDF for image: vertical bar graph]
Quarter: Q1: October - December;
2009: 3%;
2010: 0%.
Quarter: Q2: January - March;
2009: 35%;
2010: 19%.
Quarter: Q3: April - June;
2009: 51%;
2010: 60%.
Quarter: Q4: July - September;
2009: 12%;
2010: 21%.
Source: GAO Analysis of HHS data.
[End of figure]
The Grants.gov PMO reported that collection delays complicate its
ability to manage Grants.gov efficiently. Until it receives its
contributions, Grants.gov is generally not permitted to expend funds
for system maintenance, upgrades, or any other activities or
purchases.[Footnote 17] HHS and PMO officials said that to date, they
have met all federal standards for executing contracts and eventually
are able to obligate all partner agency contributions each fiscal
year, but face difficulties, especially with small but crucial
contracts, that are restricted by acquisition rules from crossing
fiscal years. For example, the PMO said that for the first several
months of fiscal year 2010, it was difficult and expensive to make
changes to the Web site because the contract option period for the
contractor who supported those changes had ended and there were no
funds available to exercise the next option period. This resulted in
many Web pages becoming outdated and required approximately 90 changes
to Web pages when funds became available and support was restored.
Various factors contribute to funding delays. According to OMB,
reasons for late or nonpayment of partner agency funds include
internal agency issues and statutory requirements governing agencies'
transfer of funds for E-Gov initiatives.[Footnote 18] Additionally,
the Grants.gov PMO and officials from other legacy E-Gov initiatives
we interviewed reported that the process of managing the MOUs--which
are the vehicles that lay out the amount and timing of contributions
to be made in support of these E-Gov initiatives--is time consuming
and contributes to funding delays. For example, both the Disaster
Assistance Improvement Program (DAIP) and Benefits.gov PMOs noted that
delays in collections from partner agencies posed a serious threat to
their respective systems and all three case study managing partners
stated that the enforcement of these agreements is costly to the PMOs.
Managing recurring risks is a multistep process that includes
evaluating and selecting risk management alternatives.[Footnote 19] As
we have previously reported, OMB staff recognize the risks the PMO
faces in compelling agencies to pay on time, but said that with proper
management such risks can be greatly mitigated. They added that other
E-Gov initiatives face similar challenges but still run successful
systems with higher levels of customer satisfaction, such as Business
Gateway [hyperlink, http://www.business.gov] and Benefits.gov
[hyperlink, http://www.benefits.gov].
The E-Gov initiatives in our review use various strategies to manage
collection delays. For example, all of them--including Grants.gov--
prepare and distribute agency MOUs early in the fiscal year to
facilitate rapid collection, as well as time contracts to begin mid or
late in the fiscal year rather than at the start of the fiscal year.
However, the IAE and DAIP PMOs report that two additional strategies
are also useful in managing delays. They are: (1) depositing partner
fees/contributions into multiyear appropriation accounts and (2)
receiving some form of funds from their managing partners until
partner agency contributions become available.
* Multiyear Appropriation Accounts. Integrated Acquisition Environment
(IAE) and DAIP deposit their multiyear or no-year partner agency
contributions into multiyear accounts. This allows the agency to carry
over unobligated funds from one year to the next, which can help with
cash flow issues during the early part of the fiscal year before
current year funds become available. The IAE PMO reports depositing
partner agency contributions into a revolving fund, and said that in
previous years it was able to use unobligated funds (i.e., carry-over)
in the revolving fund to mitigate the adverse impact of receiving
contributions later in the fiscal year. The DAIP PMO uses a different
type of account--a multiyear, reimbursable account--to achieve the
same outcome.[Footnote 20]
* Timing of Managing Partner Contributions. Both IAE and DAIP have the
benefit of receiving funds from their managing partner to tide them
over between the beginning of a fiscal year and the point at which
partner agency contributions are made available. The IAE PMO reports
being able to borrow funds from GSA prior to receiving its partner
agency contributions; it reimburses GSA once it receives its partner
agency contributions. DAIP receives their managing partner's
contribution in advance of the OMB E-Gov Benefits report issuance
[Footnote 21]--in January of fiscal year 2010 for example--which eases
cash flow issues caused by receiving partner agency contributions late
in the fiscal year.[Footnote 22]
Grants.gov's contributions are deposited into an annual appropriation
account. The PMO treats all contributions, including contributions
from agencies that pay with multi-or no-year funds as being available
for obligation only in the fiscal year of the contribution. That is,
because the contributions are deposited into an account that closes at
the end of each fiscal year, the Grants.gov PMO either obligates all
of these funds by the end of each fiscal year, or returns them. Our
review of available agency agreements found that 7 partner agencies in
fiscal year 2008 and 10 partner agencies in fiscal year 2009 reported
contributing multiyear or no-year funds to Grants.gov. These funds
accounted for at least 20 percent of the Grants.gov budget in both
years.[Footnote 23] To create a more reliable funding stream for
Grants.gov, PMO and HHS officials said that they are exploring several
alternatives to the current system, including the use of revolving
funds, multiyear reimbursable accounts, and direct appropriations.
They are also exploring the possibility of keeping the funds in an
annual appropriation account but having partner agencies delay
transferring their no-or multiyear funds until the first quarter of
the following fiscal year; these funds would be available in the
fiscal year following the year for which the contribution was made. To
date, HHS has not implemented these or other alternatives.
Experiences and lessons learned from other similar legacy E-Gov
initiatives could help inform Grants.gov's deliberations as it
considers options for addressing its funding-related challenges. HHS
acknowledges the value in sharing information and met with the
National Science Foundation, which serves as managing partner for the
Grants Management Line of Business initiative in December 2010. The
purpose of the meeting was to discuss Grants.gov's funding challenges
and to explore potential funding alternatives. HHS also reported
attending an April 2010 Grants/Acquisition Community collaboration
meeting which included GSA IAE managing partner officials. Part of the
purpose of the meeting was to discuss governance and IT funding of E-
Government projects. However, HHS does not regularly meet with its
counterparts in other legacy E-Gov initiatives. We have previously
reported on the benefits of knowledge-sharing in a variety of
government programs.[Footnote 24] OMB encourages legacy E-Gov
initiatives to share good practices, such as strategies used to manage
collection delays, and has referred HHS to other E-Gov initiatives to
seek guidance on this issue. Other E-Gov managing partners have also
noted the benefits of such collaboration. For example, the DAIP and
Benefits.gov PMOs have a long-standing collaborative relationship
that, according to DAIP officials, includes sharing best practice
information and lessons learned. In addition, DAIP officials noted
that members of one of its governance bodies, typically
representatives of other E-Gov offices, often share best practices
from other E-Gov initiatives with which they have experience.
Recent Proposal to Merge Integrated Acquisition Environment and
Grants.gov Does Not Address Funding Issues:
The President requested $38 million for GSA in fiscal year 2012 to
modernize and upgrade IAE operations. Of this amount, $500,000 would
support the inclusion of Grants.gov functionality in a consolidation
of GSA's Federal Business Opportunities (an IAE system that publicizes
contract opportunities) and Grants.gov into a single Web site for both
grant and contract opportunities, tentatively called Federal
Opportunities; however, the proposal does not include a funding
mechanism for operation and maintenance costs once the system is
developed.[Footnote 25] GSA currently expects the development of
Federal Opportunities to be completed in fiscal year 2013.
Accountability and Responsibility for Grants.gov Performance among the
Grants.gov Governance Entities Remains Unclear:
Grants.gov continues to experience persistent governance challenges,
including unclear roles and responsibilities among the governance
entities, a lack of key performance metrics, and communication with
stakeholders. Since we first reported on these issues in July 2009,
some progress has been made in these areas. As previously discussed,
although OMB and HHS have taken some steps to implement our
recommendations to (1) develop and review performance metrics related
to system availability, usability, and data integrity; and (2) develop
guidance that defines roles and responsibilities of various governance
bodies and ensures that the Grants.gov budget and funding model
adequately supports the package of IT services approved by HHS's OCIO,
these recommendations have not been fully implemented. Given the
number of entities with management and oversight responsibilities for
Grants.gov, clear roles and responsibilities for each and coordination
among these entities is critical. In addition, information on system
performance and costs is necessary to clearly link the benefits
partner agencies receive with the costs they pay and may foster
partner agency support for Grants.gov.
Unclear Roles and Responsibilities. As we previously reported, the GEB
and HHS's OCIO share responsibility for reviewing and approving major
changes to, and funding for, the Grants.gov system. In October 2009,
the PMO indicated that it was working with the HHS Chief Information
Office to ensure full adherence to the HHS Capital Planning and
Investment Control Process (CPIC); in December 2010, the PMO told us
that Grants.gov is subject to all HHS IT Investment Control and
Security policies appropriate to major IT investments. The PMO also
described a closer working relationship with the OCIO and said that
since early 2009, HHS executives in the Grants, Budget, and CIO
offices have been regularly briefed on Grants.gov status. In addition,
HHS as the managing partner of Grants.gov attends OCIO and IT Review
Board meetings and communicates information back to the Grants.gov
PMO. According to a PMO official, the GEB continues to provide IT
capital planning governance. However, HHS officials also told us that
there is a disconnect between system requirements and the funding to
meet those requirements. As an example, HHS officials cited the GEB's
historical inability to fund an adequate disaster recovery capability.
In commenting on a draft of this report, HHS provided additional
information on its CPIC process after we completed our work on this
engagement, including a new IT acquisition approval process
implemented as of February 24, 2011. The process applies to all IT
acquisitions greater than $10,000--including Grants.gov--and includes
an IT Acquisition Approval Checklist--which requires reporting the
total cost of the acquisition. These new policies above make it more
likely that Grants.gov will be reviewed through the CPIC process.
However, until HHS's OCIO can demonstrate that it directly receives
and reviews the GEB-approved budget for Grants.gov and approves
Grants.gov activities based on the GEB-approved funding levels, HHS
lacks assurance that Grants.gov's funding levels will support the
functions approved through CPIC.
Key System Performance Measures. Since our July 2009 report, the
Grants.gov PMO has made progress in developing improved system
performance measures. In commenting on a draft of this report, an HHS
official said that in December 2010 they launched an initiative to
implement Foglight, a system performance monitoring tool. As part of
this effort, HHS developed a draft set of performance metrics for
service availability, system performance, and system usage, and is in
the process of discussing the draft measures with its stakeholders to
solicit input on potential performance metrics for the Grants.gov
system. However, until HHS finalizes and deploys a set of well-
designed performance measures it will continue to lack a clear picture
of system performance and information about how well applicants are
being served.[Footnote 26] Further, as we previously reported, in
response to the recurring difficulties with the Grants.gov system some
agencies continue to accept applications through agency-specific
electronic systems, by e-mail, or mail, under at least some
circumstances.[Footnote 27] Absent better information on the health of
the Grants.gov system--and a means to use that information to improve
system performance--partner agencies have little incentive to reduce
their reliance on potentially duplicative agency-specific grant
application systems.
Grants.gov's current strategic plan contains high-level statements on
strategic vision, mission, and goals, but does not include specific
performance goals or information on current and planned initiatives.
HHS officials acknowledged that they should update their strategic
plan; the Grants.gov PMO told us that it initiated planning activities
during the first quarter of fiscal year 2011, such as developing a
documented annual work plan, that would include proposed PMO
activities for each quarter and its progress in completing those
activities.
Communication with Partner Agencies. HHS provides partner agencies
with feedback opportunities but does not communicate some key
performance and cost information. In an effort to better inform
partner agencies about Grants.gov operations, a PMO official said that
the Grants.gov Agency User group meets monthly, and helps provide an
open line of communication between the PMO and partner agencies. The
PMO official noted that, as part of an effort to increase transparency
and provide more substantive opportunities for two-way feedback
between Grants.gov and partner agencies, HHS sponsored forums held in
January and February 2010, attended by 21 of the 26 partners. During
these sessions, HHS solicited feedback and provided updates on the
status of past partner agency recommendations. The PMO also surveyed
partner agencies about their priorities for new system requirements.
In spite of these efforts, Grants.gov partner agencies have expressed
interest in obtaining more information on system performance and
costs. For example, an official from one agency said that he would
like to see more information about performance metrics for the
Grants.gov Web site and call-in center and more transparency about
program activity costs, such as agency-specific costs. The PMO does
not routinely provide partner agencies with detailed spending plans or
reports linking costs to activity, program goal, or agency-requested
services because, as previously discussed, it generally does not track
information in this way. Absent this information, agencies lack a
clear picture of the benefits they receive from Grants.gov compared to
the costs they pay, hampering their support of and satisfaction with
Grants.gov. The PMO said that it does report on the costs and trade-
offs of significant changes to system operations when significant
realignments of program resources are required by statute, regulation,
best practice, or when proposed by the GEB.
We have previously reported that agreeing on roles and
responsibilities and developing mechanisms to monitor, evaluate, and
report on results can help increase the success of interagency
collaborative efforts such as Grants.gov.[Footnote 28] By doing so,
federal agencies can better address their partner agencies'
expectations and gain their support in achieving joint objectives.
New Federal Grants Governance Model Is Under OMB Review:
In December 2009, the Grants Task Force, a group composed of
representatives from the GEB and the GPC, including a representative
from HHS, submitted a proposal for a Federal Grants Governance
Framework to OMB. In February 2010, the Task Force met with OMB to
further discuss the issue. As of April 2011, the proposal remains
under OMB review. The framework describes a new governance body that
would replace the GEB and the GPC. The new body would report directly
to OMB and would serve as the federal grants advisory body responsible
for establishing the direction for and coordinating all governmentwide
grants initiatives, including Grants.gov. The framework calls for a
single point of contact in OMB. A GPC official said that a single
point of contact ("a champion for the grants community") in OMB would
encourage decisiveness and clear communication. In addition to
consolidating the GEB and GPC, the proposed framework would integrate
the policy, IT, operations, and oversight functions of both bodies and
includes an OMB representative as a co-chair or sponsor. The
Grants.gov PMO would be represented on an operations committee.
Finally, the proposed framework will foster involvement by the
external grantee community and encourage collaboration between federal
grant-making agencies as well as between those agencies and the
public. OMB has not provided a time frame for finishing its review. We
note that significant changes to the Grants.gov governance model are
unlikely until OMB completes its review and announces a new Grants.gov
governance framework.
As a preliminary, high-level concept document, it is understandable
that the proposal does not flesh out details as to how the framework
would be implemented, but it lacks even a high-level overview of
several critical elements. For example, while the proposal appears to
clarify the roles of the GEB and PMO, and provide structure for their
interaction it does not address the role of the managing partner CIO--
a critical entity in managing the Grants.gov system as an IT system--
nor the relationship between the CIO and the new governance bodies.
Importantly, the proposed governance framework does not appear to
address the challenges that emerge when different entities are
responsible for approving system funding and system requirements, as
is currently the case with Grants.gov.
Conclusions:
The Grants.gov system has faced funding and governance challenges that
have adversely affected Grants.gov operations. HHS and OMB have worked
diligently to manage and mitigate these issues in the short run.
However, concerns about Grants.gov's funding calculation and
governance persist, and some partner agencies also maintain their own,
potentially duplicative grants management systems--contrary to the
streamlining and cost-saving intent behind Grants.gov and the federal
grants streamlining legislation on which it is based. OMB and the
Grants.gov governance entities continue to consider longer-term
improvements to Grants.gov--such as potentially consolidating the
separate grants and contracts application systems and implementing a
new advisory body for governmentwide grants initiatives. While we
recognize that the Grants.gov PMO's ability to address governance
issues is somewhat limited until OMB completes its review of the
proposed governance framework, we believe that the time is ripe to
reconsider whether a number of factors--the package of activity costs
charged to users, how those costs are distributed among users, and the
PMO's strategies for managing persistent collection delays--will help
or hinder Public Law 106-107's goals of simplifying and streamlining
grant administration. It is also an opportune time for Grants.gov to
consider whether there are lessons to be learned from similar legacy E-
Gov systems that could inform improvements in these areas.
Grants.gov has taken steps to move closer to a fee-for-service funding
model. However, three significant issues remain. First, the current
method of distributing costs among partner agencies results in
agencies that use Grants.gov to similar degrees paying vastly
different amounts for service; second, the contribution calculation
does not account for the development and maintenance of grant
application forms--a reportedly growing cost for the PMO. Third, the
Grants.gov PMO does not report costs by key program activities to its
partner agencies, and it does not track or report on costs
attributable to each partner agency. As such, agencies' payments for
Grants.gov's services may be misaligned with the costs they impose on
the system. The importance of analyzing and understanding system costs
is not limited to Grants.gov; it will also be a critical issue for
GSA's Federal Opportunities system so that GSA, partner agencies, and
Congress have the best possible information available to them when
considering how--and at what level--to fund the new system. Absent a
well-designed funding mechanism, Federal Opportunities runs the risk
of the same kind of funding challenges currently facing Grants.gov.
Grants.gov continues to suffer from untimely agency contributions and
the PMO continues to report this issue as a serious threat to its
continuing operations. This issue is not unique to Grants.gov.
However, while Grants.gov and other E-Gov managing partners employ
some of the same risk management strategies to mitigate the effects of
delayed funding, some take mitigating steps by: (1) depositing partner
fees/contributions into multiyear appropriation accounts and (2)
receiving funds from their managing partners before partner agency
contributions are made available for use. We believe that, to the
extent that they are available to Grants.gov, these strategies could
significantly improve Grants.gov's cash flow and allow for more
efficient operations in the earlier part of each fiscal year.
Although a proposal to restructure federal grants management systems
remains under OMB review we believe that HHS can take interim steps to
address immediate Grants.gov governance and performance issues.
Although HHS has taken important steps to gather information on
potential performance measures, more needs to be done. Grants.gov's
performance measures remain in draft form; the Grants.gov strategic
plan does not include specific performance goals and information on
current or planned initiatives, and the Grants.gov PMO does not
communicate key system performance information to partner agencies.
Absent full implementation of these initiatives information gaps about
the health of the Grants.gov system will persist. However, collecting
performance information is not enough; unless this information is made
available to stakeholders and used to inform decision making, the
Grants.gov governance entities will lack a valuable management tool
for developing strategies to better achieve results.
Lastly, we continue to believe in the value of knowledge-sharing
between Grants.gov and similar legacy E-Gov initiatives. Discussing
and modifying for its own use the experiences and lessons learned from
similar legacy E-Gov initiatives--such as DAIP, Benefits.gov, and IAE-
-could help inform Grants.gov's deliberations as it considers how to
best address its funding-and management-related challenges.
Recommendations for Executive Action:
We are making the following four recommendations to the Secretary of
Health and Human Services to improve economic efficiency and support
effective management of the Grants.gov system:
* HHS should work with the Grants Executive Board--or similar
organization should the governance structure change--to improve the
allocation of costs among users by developing and implementing a
calculation that more clearly links agency contributions to their
system use.
* HHS should build on and use its existing cost-tracking capabilities
to expand its cost information and communicate that information to
partner agencies in greater detail. This includes capturing, charging
for, and reporting on all Grants.gov services provided to partner
agencies.
* HHS should link its strategic plan to an annual operating plan that
links costs and spending to performance goals and milestones, and
includes progress against goals and system initiatives.
* HHS should build on its recent outreach efforts and engage in
knowledge sharing with the managing partners of other E-Gov
initiatives.
Agency Comments & Our Evaluation:
We provided a draft of this report to the Secretary of Health and
Human Services and the Director of the Office of Management and
Budget. OMB staff provided us oral technical comments that were
incorporated as appropriate.
In written comments, the HHS Assistant Secretary for Legislation
concurred with our overall findings and recommendations. HHS's written
comments are reprinted in appendix V. Key comments include that HHS
"is proud of the significant progress made since the government-wide
"Boost" to enhance system capacity, performance, and ensure the public
has reliable access to a central portal to find and apply for federal
assistance opportunities." HHS also stated that "long term strategic
planning as well as short term operations including acquisition
activities — are hampered by the uncertainties associated with the
level of funding and schedule of funding availability" and "if a "Fee
for Service" model is not adopted and Grants.gov remains tied to the E-
Gov Benefit Report, HHS recommends federal grant policy be changed to
require OMB transmit the E-Gov Benefits report to Congress by December
1st." In regards to governance issues, HHS "appreciates the work of
the Grants Governance Taskforce in supporting the Grants.gov PMO and
recommending governance changes, and hopes that OMB will soon make its
final determination on the federal grants governance framework." We
agree that delayed funding poses a serious risk to Grants.gov's
operations. As stated earlier in this report, HHS and OMB have both
cited delayed funding as a management risk to Grants.gov. We said
that, given the timing of when the E-Government report is typically
issued, funds are generally not available for transfer until near the
beginning of the third quarter of each fiscal year. We believe that
adopting a fee-for-service model would go a long way toward addressing
Grants.gov's funding issues. We also agree, as stated in this report,
that significant changes to the Grants.gov governance model are
unlikely until OMB completes its review. In addition, HHS provided
updated information, technical comments, and suggested edits that were
incorporated where appropriate.
We are sending copies of this report to the Secretaries of Health and
Human Services, Homeland Security, and Labor; the FEMA and GSA
Administrators; the Director of the Office of Management and Budget
and to appropriate congressional committees. The report also is
available at no charge on the GAO Web site at [hyperlink,
http://www.gao.gov].
If you or your staff members have any questions or wish to discuss the
material in this report further, please contact me at (202) 512-6806
or 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 key contributions to this
report are listed in appendix VI.
Signed by:
Stanley J. Czerwinski:
Director:
Strategic Issues:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
To examine the Grants.gov system and make recommendations to improve
system management, we evaluated (1) key factors the Department of
Health and Human Services (HHS) should consider when proposing a
funding model for Grants.gov and (2) how the Grants.gov governance
bodies could address Grants.gov's previously identified governance
challenges. To address both objectives, we gathered and reviewed
reports and documentary evidence from the Office of Management and
Budget (OMB), the Grants.gov Program Management Office (PMO), and the
Grants Executive Board (GEB). We also conducted interviews with
relevant officials from OMB, HHS, and the GEB. We also reviewed
relevant legal authorities and guidance as well as previous GAO work
on Grants.gov, E-Government (E-Gov) initiatives, federal user fees,
and interagency collaboration. In addition, we analyzed Grants.gov
funding data to determine the relationship between agency use of the
system and payments. Specifically, we analyzed the relationship
between the agency size designation and other measures of system use.
To obtain additional information for both objectives, we conducted
case study reviews of three agencies that are managing partners of
other E-Gov initiatives: the Department of Labor (DOL), managing
partner of Benefits.gov; the Department of Homeland Security (DHS),
managing partner of Disaster Assistance Improvement Program (DAIP);
and the General Services Administration (GSA), managing partner of
Integrated Acquisition Environment (IAE). To make the case study
selections, we collected data from HHS on the partner agencies of
Grants.gov and from OMB on the governance and funding models used by
all legacy E-Gov initiatives. We selected a nongeneralizable sample
including DHS, DOL, and the Department of the Interior (DOI) as case
study agencies because they fulfilled our criteria of being (1)
managing partners to legacy E-Gov initiatives with funding and
governance models similar to Grants.gov and (2) partner agencies of
the Grants.gov system. As the engagement progressed, we substituted
GSA for DOI as a third case study E-Gov initiative because Grants.gov
officials identified GSA as managing a complex, similar E-Gov system
(IAE) and because GSA recently piloted an electronic grants system at
OMB's request. These case studies are not representative of all E-Gov
initiatives or partner agencies of Grants.gov. To draw on the
experiences of other managing partners of E-Gov initiatives, we
reviewed available reports and documentary evidence and conducted
interviews at all case study agencies. In order to obtain more
information from the perspective of partner agencies of Grants.gov, we
reviewed documentation and interviewed relevant officials at DHS, DOL,
and DOI.
We assessed the reliability of the data we used for this review by
interviewing knowledgeable agency officials, reviewing related
documentation, and reviewing the data for outliers and missing data.
Based on our review, we determined the data were sufficiently reliable
for our purposes. We conducted this performance audit from April 2010
to May 2011 in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit
to obtain sufficient, appropriate evidence to provide a reasonable
basis for our findings and conclusions based on our audit objectives.
We believe that the evidence obtained provides a reasonable basis for
our findings and conclusions based on our audit objectives.
[End of section]
Appendix II: Benefits.gov:
Purpose: To provide citizens with a single point of entry to
government benefit and assistance programs.
Managing partner agency: Department of Labor (DOL):
Number of partner agencies (including managing partner): 17:
Fiscal year (FY) 2011 expected agency contribution total: $3,557,033:
Table 2: Benefits.gov Expected Agency Contributions for Fiscal Year
2011:
Agency: Department of Commerce;
FY 2011 contribution: $69,201.
Agency: Department of Education;
FY 2011 contribution: $259,753.
Agency: Department of Energy;
FY 2011 contribution: $205,596.
Agency: Department of Health and Human Services;
FY 2011 contribution: $326,948.
Agency: Department of Homeland Security;
FY 2011 contribution: $164,477.
Agency: Department of Housing and Urban Development;
FY 2011 contribution: $293,852.
Agency: Department of the Interior;
FY 2011 contribution: $122,355.
Agency: Department of Justice;
FY 2011 contribution: $51,148.
Agency: Department of Labor;
FY 2011 contribution: $725,824.
Agency: Department of State;
FY 2011 contribution: $83,241.
Agency: Department of Transportation;
FY 2011 contribution: $110,320.
Agency: Department of the Treasury;
FY 2011 contribution: $175,509.
Agency: Department of Veterans Affairs;
FY 2011 contribution: $200,582.
Agency: Small Business Administration;
FY 2011 contribution: $225,654.
Agency: Social Security Administration;
FY 2011 contribution: $256,744.
Agency: U.S. Department of Agriculture;
FY 2011 contribution: $285,829.
Agency: Total;
FY 2011 contribution: $3,557,033.
Source: GAO presentation of DOL data.
Note: Partner agencies that do not make financial contributions are
not included in this table.
[End of table]
Funding: According to the Program Management Office (PMO),
Benefits.gov uses a fee-for-service funding model.
Each agency's contribution is calculated using four measures of system
usage. The four measures and their weights are as follows:
* the number of partner agency programs posted (weight = 1.0),
* page views by public (weight = 4.5),
* Benefits.gov traffic outbound to the agency (weight = 3.5), and:
* agency traffic inbound from agency to Benefits.gov (weight = .50).
Partner agencies are ranked based on their usage of each of the four
measures. This ranking is multiplied by the weight for that metric.
The result is the number of shares an agency has in the program. The
inbound traffic measure--when internet users click on links at an
agency's Web site to connect to Benefits.gov--is designed to be an
incentive. More inbound traffic from a particular agency reduces that
agency's contributions. The total approved budget for a fiscal year is
divided by the total number of partner shares. The resulting share
price is then multiplied by each partner agency's number of shares,
thus resulting in an agency funding level for that fiscal year. DOL,
the managing partner, pays more than the contribution calculation
would call for to reflect its responsibility for the system.
Governance: The Benefits.gov governance model is as follows:
* Benefits.gov Program Management Office (PMO): Day-to-day operations
are performed by the PMO. The PMO is responsible for activities such
as keeping the site running and updated, paying the program's vendors,
and updating the Benefits.gov governance bodies.
* Benefits.gov Change Control Board (CCB): The CCB is comprised of
representatives from each of the 17 partner agencies. Representatives
vet all proposals that are developed by the CCB or the PMO before they
go to the Governance Board. The CCB also oversees development of the
annual strategic and performance plans. The CCB meets four times per
year.
* Working Groups: Working Groups are formed by members of the CCB and
other federal partner agency subject matter experts to deal with a
specific issue as it arises. Working Groups meet as needed.
* Governance Board: The Governance Board is comprised of Chief
Information Officers (CIOs), or their designees, from each partner
agency and provides ongoing strategic guidance to the program manager.
These individuals represent their agency and vote on all funding and
governance decisions. The Governance Board meets four times per year.
[End of section]
Appendix III: Disaster Assistance Improvement Program (DAIP):
Purpose: To provide a single portal where citizens can identify forms
of federal disaster assistance that may be relevant through a
prescreening questionnaire, apply for disaster assistance using a
single application, and check the status of their application requests.
Managing partner agency: Department of Homeland Security (DHS)/Federal
Emergency Management Agency (FEMA):
Number of partner agencies (including managing partner): 17:
Fiscal year (FY) 2011 expected agency contribution total: $18,400,000:
Table 3: Disaster Assistance Improvement Program Expected Agency
Contributions for Fiscal Years 2011 and 2012:
Agency: Department of Commerce;
FY 2011 contributions: $30,000;
FY 2012 contributions: $12,337.
Agency: Department of Defense;
FY 2011 contributions: [Empty];
FY 2012 contributions: [Empty].
Agency: Department of Education;
FY 2011 contributions: $84,333;
FY 2012 contributions: $49,349.
Agency: Department of the Interior;
FY 2011 contributions: $41,241;
FY 2012 contributions: $41,124.
Agency: Department of Justice;
FY 2011 contributions: $95,949;
FY 2012 contributions: $50,378.
Agency: Department of Labor;
FY 2011 contributions: $410,708;
FY 2012 contributions: $115,149.
Agency: Department of Health and Human Services;
FY 2011 contributions: $194,124;
FY 2012 contributions: $133,655.
Agency: Department of Homeland Security;
FY 2011 contributions: $15,846,838;
FY 2012 contributions: $17,388,337.
Agency: Department of Housing and Urban Development;
FY 2011 contributions: $129,999;
FY 2012 contributions: $111,036.
Agency: Department of State;
FY 2011 contributions: [Empty];
FY 2012 contributions: $12,337.
Agency: Department of Transportation;
FY 2011 contributions: [Empty];
FY 2012 contributions: [Empty].
Agency: Department of the Treasury;
FY 2011 contributions: $129,299;
FY 2012 contributions: $116,177.
Agency: Department of Veterans Affairs;
FY 2011 contributions: $193,749;
FY 2012 contributions: $47,293.
Agency: Small Business Administration;
FY 2011 contributions: $464,667;
FY 2012 contributions: $94,586.
Agency: Social Security Administration;
FY 2011 contributions: $182,508;
FY 2012 contributions: $64,771.
Agency: U.S. Department of Agriculture;
FY 2011 contributions: $555,344;
FY 2012 contributions: $133,655.
Agency: U.S. Office of Personnel Management;
FY 2011 contributions: $41,241;
FY 2012 contributions: $29,815.
Agency: Total;
FY 2011 contributions: $18,400,000;
FY 2012 contributions: $18,400,000.
Source: GAO presentation of DHS data.
[End of table]
Funding: According to the DAIP Program Management Office (PMO), DAIP
has adopted a new funding model for fiscal year 2012 that contains
elements of an agency contribution and a transaction-based (fee-for-
service) model. Under the fiscal year 2012 model, DHS/FEMA will
contribute 94 percent of the total DAIP budget. The remaining 6
percent will be divided among the contributory partner agencies based
on five measures of system usage. The five measures and their relative
weights in the calculation are:
* the number of times data are exchanged between an agency interface
and disasterassistance.gov (weight = -30),
* the number of times each agency's forms of assistance are identified
as applicable to their situation by a registered disaster survivor
(weight = -20),
* the number of times each agency's forms of assistance are viewed
(weight = 50),
* the number of transfers from disasterassistance.gov to an agency Web
site (weight = 40), and:
* the number of transfers from an agency Web site to
diasasterassistance.gov (weight = 30).
The weights for two measures are negative, reducing partner agencies'
contributions. Negative weights act as incentives to partner agencies
to perform these activities. Partner agencies receive a ranking based
on their usage under each metric. This ranking is multiplied by the
weight for that metric. The result is the number of shares an agency
has in the program. The total approved budget for a fiscal year is
divided by the total number of partner shares. The resulting share
price is then multiplied by each partner agency's number of shares,
thus resulting in an agency funding level for that fiscal year.
Governance: The DAIP governance model is as follows:
* DAIP Program Management Office (PMO): The PMO handles day-to-day
operations such as keeping the site running and updated, and paying
the program's vendors.
* Working Group: The Working Group is chaired by the DAIP program
manager and consists of representatives assigned by their agencies.
This group includes two types of partners, voting partners (those who
provide monetary support of the program) and advisory partners (those
who attend meetings to advise the group on topics within the agency
area of expertise). The Working Group provides direction to the DAIP
PMO regarding the execution of the program strategic plan and scope
and provides recommendations to the Executive Steering Committee for
ratification decisions on all major program initiatives. The Working
Group meets biweekly.
* Working Group Subcommittees: Subcommittees are made up of volunteers
from the Working Group. Subcommittees have been used for developing
the program strategic plan, scope, funding model, performance
measurement, and lessons learned procedures.
* Executive Steering Committee: This committee consists of appointees
from each federal partner agency. This group includes voting and
advisory partners. Voting partners ratify all decisions related to
funding and strategy. The committee meets quarterly.
[End of section]
Appendix IV: Integrated Acquisition Environment (IAE) Initiative:
Purpose: To integrate and streamline the federal procurement process
through electronic means. IAE consists of eight systems under one
organizational umbrella.
Managing partner agency: General Services Administration (GSA):
Number of partner agencies (including managing partner): 24:
Fiscal year (FY) 2011 expected agency contribution total: $40,574,591:
Table 4: Integrated Acquisition Environment Initiative Expected Agency
Contributions for Fiscal Year 2011:
Agency: Department of Commerce;
FY 2011 contributions: $194,889.
Agency: Department of Defense;
FY 2011 contributions: $26,373,484.
Agency: Department of Education;
FY 2011 contributions: $54,656.
Agency: Department of Energy;
FY 2011 contributions: $1,957,912.
Agency: Department of Health and Human Services;
FY 2011 contributions: $1,635,490.
Agency: Department of Homeland Security;
FY 2011 contributions: $1,668,346.
Agency: Department of Housing and Urban Development;
FY 2011 contributions: $39,180.
Agency: Department of the Interior;
FY 2011 contributions: $299,160.
Agency: Department of Justice;
FY 2011 contributions: $712,563.
Agency: Department of Labor;
FY 2011 contributions: $145,153.
Agency: Department of State;
FY 2011 contributions: $719,638.
Agency: Department of Transportation;
FY 2011 contributions: $359,001.
Agency: Department of the Treasury;
FY 2011 contributions: $358,606.
Agency: Department of Veterans Affairs;
FY 2011 contributions: $1,747,180.
Agency: Environmental Protection Agency;
FY 2011 contributions: $108,139.
Agency: General Services Administration;
FY 2011 contributions: $1,483,007.
Agency: National Aeronautics and Space Administration;
FY 2011 contributions: $1,783,828.
Agency: National Science Foundation;
FY 2011 contributions: $15,067.
Agency: Nuclear Regulatory Commission;
FY 2011 contributions: $6,964.
Agency: Small Business Administration;
FY 2011 contributions: $2,872.
Agency: Social Security Administration;
FY 2011 contributions: $39,124.
Agency: U.S. Agency for International Development;
FY 2011 contributions: $131,734.
Agency: U.S. Department of Agriculture;
FY 2011 contributions: $615,145.
Agency: U.S. Office of Personnel Management;
FY 2011 contributions: $123,453.
Agency: Total;
FY 2011 contributions: $40,574,591.
Source: GAO presentation of GSA data.
[End of table]
In addition to the IAE Initiative, the IAE program also receives
funding through the IAE-Loans and Grants initiative. The IAE-Loans and
Grants initiative funds the expanded use of the Data Universal
Numbering System that assigns a unique identifier to all recipients of
federal awards as required by the Federal Funding Accountability and
Transparency Act and the American Recovery and Reinvestment Act. In
fiscal year 2008, OMB directed the IAE Program Management Office
(PMO), which is responsible for overseeing the Data Universal
Numbering System, to issue Memoranda of Agreement to 22 partner
agencies to cover the cost of this expanded service. Fees for the IAE-
Loans and Grants initiative are calculated using a different funding
calculation than the IAE initiative described in this report and
annually add $6.5 million to the total IAE program budget.
Funding: According to the PMO, IAE uses a fee-for-service funding
model. IAE uses a funding calculation to determine the fees of the 24
partner agencies. Initially, two partner agency measures are used: (1)
the annual obligated dollar volume of contracts and (2) the annual
number of transactions. A "transaction" is defined as any
modification, new contract, or other action which would require the
use of an IAE system. Both of these measures are provided by the
Federal Procurement Data System (FPDS). Partner agencies are divided
into three tiers based on the two measures. The FPDS data on dollar
volume of contracts and number of transactions used to determine an
agency's tier are from the most current completed fiscal year (i.e.,
data from fiscal year 2008 will be used in the fiscal year 2011
calculation). The funding calculation is updated each year. A weight
is assigned to each tier (.01, .02, or .03). This weight is multiplied
by each agency's FPDS total dollar volume and the result is divided by
100 to determine each agency's weighted share of the budget. Each
agency's weighted share is divided by the sum of all agencies'
weighted shares (not including the Department of Defense's shares) to
determine the agency percent of 35 percent of the total IAE initiative
budget. The agency percent is multiplied by the total IAE initiative
budget to get the agency's contribution. The Department of Defense--
the largest agency user of the IAE system both in terms of dollar
volume and number of transactions--pays 65 percent of the total IAE
budget. This cap was agreed to in 2004 and is reviewed annually to
determine if a cap is required.
Governance: The IAE governance model is as follows:
* The Program Management Office (PMO) is responsible for day-to-day
program support. The PMO holds monthly meetings with the program
managers of each of IAE's eight systems.
* The IAE Transition Planning Team Review Board is responsible for
reviewing and approving changes to IAE operations and programs. The
board is organized within the PMO and is composed of the individual
system program managers. The board meets twice monthly.
* The Acquisition Committee for E-Gov is the executive steering
committee that makes broad and long-term decisions regarding IAE. The
committee's responsibilities include reviewing and voting on the IAE
budget and funding models. The committee includes representatives of
IAE partner agencies and OMB and meets monthly.
* In addition, the eight IAE systems have a consolidated Change
Control Board that includes partner agency voting members. The
consolidated CCB recommends and approves internal system changes.
Individual system Project Managers are part of both the consolidated
CCB and the IAE Transition Planning Team Review Board.
[End of section]
Appendix V: Comments from the Department of Health and Human Services:
Department Of Health & Human Services:
Office Of The Secretary:
Assistant Secretary for Legislation:
Washington, DC 20201:
April 26, 2011:
Stanley J. Czerwinski:
Director, Strategic Issues:
U.S. Government Accountability Office:
441 G Street N.W.
Washington, DC 20548:
Dear Mr. Czerwinski:
Attached are comments on the U.S. Government Accountability Office's
(GAO) draft report entitled: "Grants.Gov: Additional Action Needed to
Address Persistent Governance and Funding Challenges" (GAO 11-478).
The Department appreciates the opportunity to review this draft report
prior to publication.
Sincerely,
Signed by:
Jim R. Esquea:
Assistant Secretary for Legislation:
Attachment:
[End of letter]
General Comments Of The Department Of Health And Human Services (HHS)
On The Government Accountability Office's (GAO) Draft Report Entitled,
"Grants.Gov: Additional Action Needed To Address Persistent
Governance And Funding Challenges" (GAO-11-478):
The Department appreciates the opportunity to review and comment on
this draft report. We concur with the report's overall findings and
recommendations and offer the following comments:
Managing Partner Role & System Performance:
HHS, as the largest grant making entity in the federal government,
takes seriously its managing partner role of Grants.gov and is proud
of the significant progress made since the government-wide "Boost" to
enhance system capacity, performance and ensure the public has
reliable access to a central portal to find and apply for federal
assistance opportunities.
* Since the completed "Boost" activities in April 2010, the Grants.gov
system has experienced only 2 unplanned outage as compared to routine
user interruptions experienced in early 2009 and prior years.
* The Grants.gov website logged more than 11 million site visits in
Fiscal Year (FY) 2010; and processes an average of over 250,000
applications per year.
* The system's processing speed is exceptional - validating
prospective grantee applications in less than three minute compared to
previous processing times which averaged five to ten minutes in length.
* Since 2009, Grants.gov has completed six technical builds to further
enhance system functionality and improve users' experience including:
the ability to export data into Excel, streamline workflow and access
24 hour user support. With the Grants.gov system fully stable, the
Grants.gov Program Management Office (PMO) is working to complete
implementation of additional performance monitoring metrics that will
be meaningful to a wide array of stakeholders and will help to
identify system issues.
As the managing partner, HHS ensures strong executive and managerial
support for the Grants.gov system across the Department. HHS CIO is
fully engaged in the Grants.gov PMO's capital planning efforts, IT
investment considerations (including analytic support of the system's
Exhibit 300), and security monitoring through the Department's
Certification and Accreditation process.
Funding Model:
The current Grants.gov funding model hampers the Grants.gov PMO's
ability to meet its financial obligations and ensure continued system
availability. Long term strategic planning as well as short term
operations including routine acquisition activities (such as the
timely procurement of updated software licenses) are hampered by the
uncertainties associated with the level of funding and schedule of
funding availability.
The current contribution-based funding model requires approval by the
Grants Executive Board (GEB) and OMB concurrence (which is the driving
factor) of the Grants.gov annual budget, and does not allow for the
collection of funds until after OMB issues the Report to Congress on
the Benefits of the President's E-Government Initiatives (E-Gov
Benefit Report) in February or March.
In FYs 2009, 2010 and 2011, HHS, as managing partner, requested
budgetary increases for Grants.gov to accommodate user requests for
additional system functionality. All budget increase requests were
denied by the GEB and OMB; the latter makes the formal decisions.
In both FYs 2010 and 2011, delayed production & delivery of the E-Gov
Benefits Report led to a lack of funds until almost the 3rd quarter of
the fiscal year. Collection of funds is further delayed from some
agencies due to their congressional requirement to reprogram funds
from their respective appropriations committees; in FY2010, Grants.gov
was still missing more than $370k in owed agency contributions as of
September 16, 2010. This situation placed the Grants .gov program at
risk for lapsing funds because standard acquisition processing
timelines had passed.
Grants.gov is a fully operational system and is no longer considered a
"new" systems development project. The E-Gov Benefits Report provision
was constructed for new programs that had not yet made it to an
operational status.
The outdated funding model, constraints associated with the program's
ties to the E-Gov Benefits report, and delayed agency partner
contributions place the program and the system at risk by forcing us to
"pass the hat" in order to pay for our routine operations, maintenance
and customer support activities.
HHS requested in 2009 and 2010, that Grants.gov receive formal
designation as a "mature" program and that mature programs be allowed
to receive funding starting October 1" of the fiscal year. OMB has not
approved these requests to change the system's designation.
A "Fee for Service" model that incorporates collection of funds for
required operations and maintenance, legislative and policy
modifications, and enhancements that keep the product in line with
technology advances is also suggested. If a "Fee for Service" model is
not adopted and Grants.gov remains tied to the E-Gov Benefit Report,
HHS recommends federal grant policy be changed to require OMB transmit
the E-Gov Benefits report to Congress by December 1st.
Governance:
By design, the current governance structure overseeing Grants.gov
places all members of the GEB with responsibility to:
"provide oversight, executive sponsorship, Agency participation, and
Agency resource contributions for the Grants.gov as well as Agency
review and sponsorship for GMLOB. The Board will define accountability
and reporting requirements to be met by the Program Management
Offices. The Grants Executive Board will focus on the following areas
of strategic interest:
* Grants.gov implementation, operation, budgets and funding
algorithms, funding, and foundations for long-terra service." (GEB
Charter, January 2007)
Even though HHS has the most thorough understanding of the Grants.gov
program and system needs, in its role as Managing Partner (and as
evidenced by HHS' funding requests in FYs 2009, 2010 and 2011) it does
not have the authority to adjust Grants.gov's programmatic budget
without the agreement of 26 different constituents.
HHS appreciates the work of the Grants Governance Taskforce in
supporting the Grants.gov PMO and recommending governance changes, and
hopes that OMB will soon make its final determination on the federal
grants governance structure.
[End of section]
Appendix VI: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Stanley J. Czerwinski, (202) 512-6806:
Staff Acknowledgments:
In addition to the individual above, Jackie Nowicki, Assistant
Director; and Elizabeth Hosler, Analyst-in-Charge, managed all aspects
of this engagement. Sarah Arnett, Richard Burkard, Hayley Landes,
Andrew Litten, Julia Matta, Amanda Miller, Patricia Norris, Melissa
Swearingen, James R. Sweetman, Jr., and Elizabeth Wood made key
contributions to this report. Donna Miller provided the report's
graphics.
[End of section]
Footnotes:
[1] [hyperlink, http://www.grants.gov/].
[2] GAO, Recovery Act: Consistent Policies Needed to Ensure Equal
Consideration of Grant Applications, [hyperlink,
http://www.gao.gov/products/GAO-09-590R] (Washington, D.C.: Apr. 29,
2009) and GAO, Grants Management: Grants.gov Has Systemic Weaknesses
That Require Attention, [hyperlink,
http://www.gao.gov/products/GAO-09-589] (Washington, D.C.: July 15,
2009).
[3] Office of Management and Budget, Recovery Act Implementation--
Improving Grants.gov and Other Critical Systems, M-09-14 (Washington,
D.C.: Mar. 9, 2009) and Office of Management and Budget, Improving
Grants.gov, M-09-17 (Washington, D.C.: Apr. 8, 2009). In April 2010,
OMB reported that these risks had been successfully mitigated and
instructed federal grant-making agencies to resume using the apply
function of Grants.gov for all programs that previously used this
functionality by April 30, 2010. See Office of Management and Budget,
Grants.gov - Return to Normal Operations, M-10-16 (Washington, D.C.:
Apr. 23, 2010). According to the Grants.gov PMO, all federal partners
but one--with some additional individual programmatic exceptions--use
both the find and apply functions. In fiscal year 2010, 4,217
discretionary synopses were posted and 246,631 applications were
submitted.
[4] Pub. L. No. 106-107 (Nov. 20, 1999).
[5] For more information on Public Law 106-107 implementation, see
GAO, Grants Management: Additional Actions Needed to Streamline and
Simplify Processes, [hyperlink,
http://www.gao.gov/products/GAO-05-335] (Washington, D.C.: Apr. 18,
2005), GAO, Grants Management: Grantees' Concerns with Efforts to
Streamline and Simplify Processes, [hyperlink,
http://www.gao.gov/products/GAO-06-566] (Washington, D.C.: July 28,
2006) and [hyperlink, http://www.gao.gov/products/GAO-09-589].
[6] Office of Management and Budget, E-Government Strategy
(Washington, D.C.: Feb. 27, 2002).
[7] Pub. L. No. 107-347 (Dec. 17, 2002).
[8] Office of Management and Budget, FY 2004 Grants.gov Funding and
Advance Planning Guidance for FY 2005-FY 2006, M-04-14 (Washington,
D.C.: June 18, 2004).
[9] Prior to fiscal year 2010, agency size was the sole basis for
determining agency contributions.
[10] The fiscal year 2010 and fiscal year 2011 contribution
calculations are the same and use fiscal year 2007 data to measure Web
site usage. The GEB approved the use of fiscal year 2008 data to
calculate the Web site usage measures in the fiscal year 2012
contribution calculation. In all other aspects the fiscal year 2012
contribution calculation is the same as the one used in fiscal year
2010 and fiscal year 2011.
[11] These agencies are: (1) CNCS, (2) SBA, (3) SSA, (4) Treasury, (5)
DHS, (6) DOT, (7) DoL, and (8) VA.
[12] Statement of Federal Financial Accounting Standards (SFFAS) No.4,
Managerial Cost Accounting, Concepts and Standards for the Federal
Government (July 31, 1995).
[13] 31 U.S.C § 1535(b).
[14] GAO, Federal User Fees: A Design Guide, [hyperlink,
http://www.gao.gov/products/GAO-08-386SP] (Washington, D.C.: May 29,
2008).
[15] Office of Management and Budget, Improving Grants.gov, M-09-17
(Washington, D.C.: Apr. 8, 2009).
[16] For example, in 2005, we reported that most of the 10 legacy E-
Government initiatives that were funded by agency contributions
experienced shortfalls from their funding plans for fiscal years 2003
and 2004; in most cases contributions from partner agencies were made
in the third and fourth quarters of those fiscal years. In 2009, we
reported that such delays persisted for Grants.gov, with 37 percent of
their fiscal year 2009 partner contributions being paid by March 2009
and 88 percent paid by the end of June 2009.
[17] HHS, as the managing partner, provides the Grants.gov PMO funds
to pay staff salaries and benefits as well as to maintain their
physical offices from the beginning of the fiscal year until
Grants.gov receives its partner agency contributions. The only
exceptions are tasks performed by contractors under contracts funded
with prior fiscal year funds with performance periods extending into
the current fiscal year.
[18] For example, since fiscal year 2006 agencies may not make funds
available for transfers or reimbursements to OMB's E-Government
initiatives until 15 days after OMB submits an E-Government report to
the House and Senate appropriations committees and until the
committees approve the transfer of these funds. See e.g., Consolidated
Appropriations Act, 2010, Pub. L. No. 111-117, div. C, title VII, §
733 123 Stat. 3213. In fiscal year 2010, this report was issued on
March 5, 2010--a time frame that OMB officials described as consistent
with previous years. Given the timing of when the E-Government report
is typically issued, funds are generally not available for transfer
until near the beginning of the third quarter of each fiscal year. In
fiscal year 2011, the report was issued on February 17, 2011. Further,
some agencies also have specific limitations on their agency
contributions to E-Government initiatives, such as
reprogramming/notification requirements.
[19] The GAO Risk Management Framework divides risk management into
five major phases: (1) setting strategic goals and objectives, and
determining constraints; (2) assessing risks; (3) evaluating
alternatives for addressing these risks; (4) selecting the appropriate
alternatives; and (5) implementing the alternatives and monitoring the
progress made and results achieved. See Risk Management: Further
Refinements Needed to Assess Risks and Prioritize Protective Measures
at Ports and Other Critical Infrastructure, [hyperlink,
http://www.gao.gov/products/GAO-06-91] (Washington, D.C.: Dec. 15,
2005).
[20] In all cases, the ability to legally carry forward unobligated
balances is subject to the funds' period of availability. That is, the
funds contributed must be legally available for obligation beyond the
fiscal year. Unless otherwise specifically provided for, amounts
contributed do not automatically assume the time character of the
account or fund to which they are transferred. See 31 U.S.C. § 1532; B-
319349, June 4, 2010.
[21] The DAIP PMO also reports that it is seeking full managing
partner funding for disasterassistance.gov. DAIP PMO staff view this
move as important to reducing the disruption of late agency payments
and the staff time involved in MOU review and enforcement. In fiscal
year 2011, DHS is expected to pay 86 percent of DAIP's budget. In
2010, the DHS OIG recommended full DHS/FEMA funding of DAIP to
stabilize the funding model; however, this recommendation has not been
implemented (see Department of Homeland Security Office of the
Inspector General, FEMA's Disaster Assistance Improvement Plan, OIG-10-
98, June 2010).
[22] Not every partner contribution constitutes a transfer of funds,
which is defined as a shifting of all or part of the budget authority
in one appropriation or fund account to another. See A Glossary of
Terms Used in the Federal Budget Process, GAO-05-734SP (Washington,
D.C.: September 2005), at 95.
[23] Our review of Grants.gov MOUs included all 26 partner agency MOUs
for fiscal year 2008 and MOUs for 25 of the 26 partner agencies for
fiscal year 2009. In each year, some of the MOUs did not specify the
type of funds (one-year, multiyear or no-year). For that reason, we
can state that at least 20 percent of funds were multi-or no-year
funds.
[24] GAO, Information Sharing: Federal Agencies Are Sharing Border and
Terrorism Information with Local and Tribal Law Enforcement Agencies,
but Additional Efforts Are Needed, [hyperlink,
http://www.gao.gov/products/GAO-10-41] (Washington, D.C.: Dec. 18,
2009); GAO, Older Driver Safety: Knowledge Sharing Should Help States
Prepare for Increase in Older Driver Population, [hyperlink,
http://www.gao.gov/products/GAO-07-413] (Washington, D.C.: Apr. 11,
2007).
[25] The consolidated system is based on a "proof of concept" pilot
conducted in 2009-2010. OMB directed GSA to initiate the pilot so that
lessons learned could inform OMB's efforts to modernize the broader
federal grants structure, including how these systems interact with
agencies' own grants and contracting systems.
[26] Grants.gov's only performance measures that address system
performance are tied to customer satisfaction.
[27] [hyperlink, http://www.gao.gov/products/GAO-09-589].
[28] GAO, Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, [hyperlink,
http://www.gao.gov/products/GAO-06-15] (Washington, D.C.: Oct. 21,
2005). The eight key practices are as follows: define and articulate a
common outcome; establish mutually reinforcing or joint strategies;
identify and address needs by leveraging resources; agree on roles and
responsibilities; establish compatible policies, procedures, and other
means to operate across agency boundaries; develop mechanisms to
monitor, evaluate, and report on results; reinforce agency
accountability for collaborative efforts through agency plans and
reports; and reinforce individual accountability for collaborative
efforts through performance management systems. Two of the eight
factors are identified in this report as lacking in Grants.gov's
collaborative efforts with its partner agencies.
[End of section]
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