The Compliance Conundrum With Federal Grants: National Grants Management Association 2018

It’s always great to hear from Rhea Hubbard, Senior Policy Analyst at the Office of Management and Budget, in any setting. I can’t tell you how much I appreciate that the President’s Management Agenda Cross-Agency Priority Goal #8 is all about grants – and that we’re keeping on keeping on with the long slog of grant reform.

I can confirm that agencies are already working on strategic plans, like Anna Mauldin suggested back in February. But I have had a few conversations often starting along the lines of, “How are we supposed to manage for performance, when we can’t even get the compliance right?” This combined with rumblings about the emphasis on internal controls (a.k.a., things that make it easier to be compliant), and feelings of being lost… Hopeful, but lost.

I don’t know about you, but I have a really hard time wrapping my head around the promise of moving beyond compliance to performance. I want to believe. And, I see it happening.

The enhancements to and the Single Audit Clearinghouse are fantastic. I now have terabytes of government grant information at my fingertips.

Quite frankly, it’s amazing – and yet, it’s far from perfect.

Until we’ve improved our understanding and application of compliance on all levels within the grant community, we’re still going to get asked the basics:

  • How much was expended?
  • Was it obligated?
  • Why haven’t these billions of dollars been drawn down?
  • Were there any false claims made?

It’s a conundrum that is consistently top-of-mind for many of us. At the individual project and program levels, sometimes we’re able to get from compliance to performance, but getting there for all $700B in annual federal grant spending is a whole new ballgame.

What are the barriers to overcoming this compliance conundrum?

  • Investment. During this year’s National Grants Management Association event, we heard a lot of tips and tricks about how to create forms and document internal controls. But when it comes to feeding the federal grants data behemoth, there must be a massive investment made into systems and technology by all participants. Additionally, once those systems are in place, another investment must be made to maintain them. Interestingly, it’s conceivable that there may be a grant program to help the recipient community with these investments but not so much when it comes to operations and maintenance.
  • Value proposition. At the national level, the value proposition has come together – more data will lead to better grants management, reduced duplication, and earlier detection of when and how policy implementation is a success (remember, grants are policy tools). We heard from Carol Kraus from the State of Illinois that streamlining efforts have saved $106M for the state and its subrecipients.

That said, I’m not sure how recipients at the end of the grant funding chain are going to see the benefits unless they’re getting millions of dollars from lots of grants. This is the value proposition that must crystalize before moving into the next phase. This is especially true for those challenged with meeting the basic compliance requirements (which aren’t easy); without a source for operational funds to meet the coming data and reporting standards, or the need for investment in grant compliant systems.

On a positive note, grant reform continues to be a bipartisan effort… just look at the GREAT Act co-sponsors. There is a joint belief that we should be responsible with taxpayer dollars issued as financial assistance. If this issue can survive as a bipartisan issue for multiple administrations, we in the grants community have an opportunity to convince state and local officials, NGO executive directors, donors, university presidents, and thousands of other stakeholders that it is a worthy investment.

Written by:
Erica Preston
Grants & Assistance
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