4 minute read 4 Mar 2021
Glowing windows of office building

How government organizations are overcoming the challenges of grants management

By Michael Herrinton

EY US Government and Public Sector Leader

Seasoned business leader. Audit and risk professional. Devoted husband and father of three. Avid sports fan, especially all things Michigan State.

4 minute read 4 Mar 2021

Organizations are following different methods to overcome challenges of grants management. Read the ones that are trending.

The federal government uses grants to invest approximately $700 billion each year in mission-critical needs for taxpayers. Grants-giving organizations often face challenges balancing compliance requirements with meeting their agency missions. A lack of trained staff, cumbersome grantee-reporting systems, and poor communication can diminish the success of grant programs, wasting taxpayer money and leaving unresolved the problems that the grants were created to address in the first place.

To better understand how organizations are overcoming the challenges of grants management, Government Business Council (GBC) conducted an in-depth research study of public sector employees involved in their agencies’ grant programs.

The alignment between the outcomes and performance of our grantees to our organization’s mission was make or break for us in terms of credibility with all stakeholders, including Congress. This survey shows government leaders’ interest in learning from success and failure in real time in order to derive actionable insights from modern grant management systems as opposed to drowning in disconnected data.
Victoria Baecher Wassmer
EY Managing Director, and former Millennium Challenge Corporation CFO and VP of Administration and Finance

Successfully measuring grantee performance remains a challenge

Reforming the administration of grant programs to focus on project performance instead of recipient compliance with regulations has long been a priority of the federal government. In recent years, the Office of Management and Budget (OMB) codified these performance measurement requirements with the development of the Uniform Guidance. A majority of respondents say their organization’s grantees achieve their intended outcomes at least half of the time. Yet only 58% say their organization keeps track of how often grantees achieve their intended public policy outcomes.

Government agencies have not widely adopted risk management systems

Fewer than half of those surveyed believe that their agency identifies and assesses top grant risks well. This shortcoming stems from the fact that less than 50% say that their agencies have programs in place to identify and evaluate grantee risk, only 31% proactively manage grantee risk, and only 39% consider past performance results when making evaluations. The survey’s results highlight the need for organizations to invest in and improve their grantee evaluation process.

Data analytics has created unprecedented opportunities for government to manage grant risk and gain visibility across their grant portfolio to improve outcomes for the people that public grants serve. Government doesn’t need to wait to make progress for comprehensive solutions. Agencies can start to put into place the building blocks for better data and analytics now.
Bill Colbert
EY Partner and Public Financial Management Leader

A major opportunity exists to leverage data for improved decision-making

Despite the widespread agreement that performance accountability depends on access to credible, consistent, and valid data that is aligned with program objectives, agencies have not fully implemented this vision. Respondents report challenges with not only the technology their organizations have for analyzing data (32%), but also the quality of the data itself (30%). While the source of these problems vary, respondents indicate that they are at least in part caused by a continued reliance on manual reporting systems, with only 27% of respondents indicating that their organizations use automation technology that can greatly improve speed and efficiency.

What the survey says

  • 58% of respondents say their organization keeps track of how often grantees achieve their intended public policy outcomes.
  • 58% of respondents approve of the metrics used by their organizations to track grant performance outcomes.
  • A majority of respondents say their agencies’ grantees achieve their intended outcomes at least half of the time.
Range of university functions
  • Only 10% of respondents say that eligible grantees can always find available grants.
  • Limited personnel, outdated technology, and non-standard decision-making processes hinder grant administration efforts.
Range of university functions
  • For nearly a third of respondents, quality data – and the technology to analyze that data – is insufficient.
  • A majority of respondents report that their organizations use automation technology, but only 27% see significant value from it.
Range of university functions
  • 58% of respondents say their agencies have a system to identify and evaluate grantee risk.
  • Fewer than half of respondents say their agency identifies and assesses top grant risks well.
  • Fewer than half of respondents already have a tool to ensure that past performance informs future risk evaluations.
Range of university functions
  • A plurality of respondents don’t know the best way forward for improving their agency’s risk management system.
  • Data analytics tops the list of tools that respondents say are poised to impact how grants are awarded.
Managers report spending 40% of their time using antiquated processes to monitor compliance instead of analyzing data to improve results.
CAP Goal Overview: Results-Oriented Accountability for Grants

What respondents say

  • Hire more staff with program management skills
  • Work with other grant-making agencies to avoid overlap
  • Hold delinquent grantees responsible
  • Create a centralized grants management office
  • Increase staff training
  • Make online grants systems user friendly
  • Award grantees who retain internal staff
  • Utilize quantifiable past performance data when choosing grantees
  • Automate the grant assessment process
  • Standardize and streamline the process

Read the entire list here.

EY insights

  • Prioritize data analytics to provide insights and improve operations. Quality data – and the technology to analyze that data – is a top challenge for agencies. Better data analytics will help agencies to monitor risk and performance of grantees.
  • While the Office of Management and Budget (OMB) is driving an enterprise-wide approach to data standardization, agencies can take smaller, incremental approaches to data improvements in parallel. For each data and analytics challenge it faces, it is advisable that an agency apply a strong data and analytics transformation framework.

When considering how to improve the success of grant programs, agencies should:

  • Strengthen communications and outreach strategies
  • Improve data analysis and processes in support of it
  • Introduce systematic measures to assess grantee risk

Read the full article for detailed recommendation.

 

Summary

In this era of accountability, government agencies are working hard to maximize the value from grants without increasing the complexity and cost of their administration for both themselves and their grantees. To better understand how organizations are overcoming the challenges of grants management, Government Business Council (GBC) conducted an in-depth research study of public sector employees involved in their agencies’ grant programs.

About this article

By Michael Herrinton

EY US Government and Public Sector Leader

Seasoned business leader. Audit and risk professional. Devoted husband and father of three. Avid sports fan, especially all things Michigan State.