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89–456 PDF 2003

FEDERAL GRANTS MANAGEMENT: A PROGRESS

REPORT ON STREAMLINING AND SIMPLIFYING

THE FEDERAL GRANTS PROCESS

HEARING

BEFORE THE

SUBCOMMITTEE ON TECHNOLOGY, INFORMATION

POLICY, INTERGOVERNMENTAL RELATIONS AND

THE CENSUS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

APRIL 29, 2003

Serial No. 108–53

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

CHRIS BELL, Texas

———

BERNARD SANDERS, Vermont

(Independent)

PETER SIRH, Staff Director

MELISSA WOJCIAK, Deputy Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHILIP M. SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON TECHNOLOGY, INFORMATION POLICY, INTERGOVERNMENTAL

RELATIONS AND THE CENSUS

ADAM H. PUTNAM, Florida, Chairman

CANDICE S. MILLER, Michigan

DOUG OSE, California

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

BOB DIX, Staff Director

SCOTT KLEIN, Professional Staff Member

URSULA WOJCIECHOWSKI, Clerk

DAVID MCMILLEN, Minority Professional Staff Member

(III)

C O N T E N T S

Page

Hearing held on April 29, 2003 .............................................................................. 1

Statement of:

Miller, Karen M., president-elect, National Association of Counties, commissioner, Boone County, MO; Marvin G. Parnes, executive director

of research administration, University of Michigan; and Kathy Crosby,

director of workforce development, Goodwill Industries International,

Inc. ................................................................................................................. 63

Springer, Linda M., Controller, Office of Federal Financial Management,

Office of Management and Budget; Dr. Ed Sontag, Assistant Secretary

for Administration and Management, U.S. Department of Health and

Human Services Lead Agency for E-Grants Initiative and Public Law

106–107 Compliance; and Paul Posner, Managing Director, Federal

Budget and Intergovernmental Relations, U.S. General Accounting Office .................................................................................................................. 8

Letters, statements, etc., submitted for the record by:

Clay, Hon. Wm. Lacy, a Representative in Congress from the State of

Missouri, prepared statement of .................................................................. 94

Crosby, Kathy, director of workforce development, Goodwill Industries

International, Inc., prepared statement of .................................................. 81

Miller, Karen M., president-elect, National Association of Counties, commissioner, Boone County, MO, prepared statement of .............................. 66

Parnes, Marvin G., executive director of research administration, University of Michigan, prepared statement of ..................................................... 73

Posner, Paul, Managing Director, Federal Budget and Intergovernmental

Relations, U.S. General Accounting Office, prepared statement of .......... 34

Putnam, Hon. Adam H., a Representative in Congress from the State

of Florida, prepared statement of ................................................................ 4

Sontag, Dr. Ed, Assistant Secretary for Administration and Management,

U.S. Department of Health and Human Services Lead Agency for EGrants Initiative and Public Law 106–107 Compliance, prepared statement of ........................................................................................................... 23

Springer, Linda M., Controller, Office of Federal Financial Management,

Office of Management and Budget, prepared statement of ....................... 11

(1)

FEDERAL GRANTS MANAGEMENT: A

PROGRESS REPORT ON STREAMLINING

AND SIMPLIFYING THE FEDERAL GRANTS

PROCESS

TUESDAY, APRIL 29, 2003

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON TECHNOLOGY, INFORMATION POLICY,

INTERGOVERNMENTAL RELATIONS AND THE CENSUS,

COMMITTEE ON GOVERNMENT REFORM,

Washington, DC.

The subcommittee met, pursuant to notice, at 10 a.m., in room

2203, Rayburn The Capitol, Hon. Adam Putnam (chairman of the

subcommittee) presiding.

Present: Representatives Miller of Michigan and Watson.

Staff present: Bob Dix, staff director; John Hambel, senior counsel; Scott Klein, Chip Walker, and Lori Martin, professional staff

members; Ursula Wojciechowski, clerk; David McMillen, minority

professional staff member; and Jean Gosa, minority assistant clerk.

Mr. PUTNAM. A quorum being present, this hearing on the Subcommittee on Technology, Information Policy, Intergovernmental

Relations and the Census will come to order.

Good morning and welcome to today’s hearing examining the efficiency of the Federal grants application, disbursement and management process.

I flew up this morning, and I pulled out my material for the

hearing and was reviewing some of the testimony, and the nice

lady sitting next to me in a very full flight—we were very close to

one another—looked over my shoulder, and she said, I notice that

you’re reading some material on Federal grants management. I

said, ‘‘Yes, ma’am.’’ And she said, ‘‘Well, I manage the grants for

the Department of Justice for the Bureau of Judicial Assistance.’’

And I said, ‘‘That is kind of interesting,’’ and she proceeded to tell

me some of the problems that she has experienced. And she said,

‘‘What is your role in all of this?’’ And I said, ‘‘Well, I’m a Member

of Congress,’’ and she said, ‘‘Well, you’re mighty young, aren’t you?’’

I said, ‘‘Yes, ma’am, I get that a lot.’’ She said, ‘‘Republican or

Democrat?’’ I said, ‘‘I’m a Republican.’’ She said, ‘‘What a shame.’’

I said, ‘‘A shame?’’ She said, ‘‘Yes, quite, what a shame.’’ I said,

‘‘OK.’’

So that’s how my morning was spent. And you can rest assured

that at our next hearing, the Department of Justice will be present.

But you’ve got to love a country where you’re free to express your

opinions.

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The Federal Government last year provided State and local gov- ernments with grants totaling more than $350 billion, or 15 percent of our Federal outlays and 31⁄2 percent of GDP. This compares to the less than $1 billion sent to the local and State governments

in the 1940’s, an amount totaling, at that time, less than 5 percent

of Federal outlays and one half percent of GDP.

By 2008, State and local governments are projected to receive more than $480 billion annually from the Federal Government. The

Federal Government also focuses resources on universities and

nonprofits, with some 71,000 grants provided each year totaling

more than $60 billion.

In my former role as a State legislator, we often spoke around

the Statehouse about the role of the Federal moneys and the role

that they played in our own policymaking decisions. Clearly, the

role of Federal Government resources within our communities is

large. Some even may say too large. But by the same token, service

delivery to our citizens cannot and should not be accomplished solely through programs based in Washington, DC.

The Federal Government must continue its collaborative effort as

a partner with various grant entities that deliver services to the

American public. The reliance we mutually place on this partnership, functioning with limiting resources, makes it more critical

than ever that we spend grant moneys wisely, that we have efficient processes in place to manage that grant money and that the

grants process is transparent and accessible.

Today we will examine the processes by which States, localities,

universities and not-for-profits discover, apply, secure and manage

more than $410 billion this year alone. The current system for

awarding and administering grants is highly decentralized, involves thousands of Federal employees, remains primarily paperbased, and each grant has different statutory, regulatory, policy

and process requirements.

Although there have been many incremental attempts over the

years to streamline this process, more recent grants management

legislative reforms are leading us toward massive changes to the

system, primarily by utilizing technology, combined with a citizencentric attitude.

In 1999, Congress passed the Federal Financial Assistance Management Improvement Act with the intent to improve the effectiveness and performance of Federal grant programs, simplify the application and reporting requirements, improve the delivery of services to the public and facilitate greater coordination among the delivering services. Of course, the devil is in the details and the execution.

Between 1999 and 2001, our 26 Federal grantmaking agencies

joined together, led by the Department of Health and Human Services, to develop the core of a plan that improved grants management as envisioned by Congress. That plan, in compliance with the

new law, cut across all Federal agencies, focused on efficiency and

openness for all by utilizing technology, and requires common applications in reporting by all agencies. This massive effort formed

the basis of what we now know as E-Grants, a top priority E-Government initiative followed closely by the President through his

President’s Management Agenda. The E-government Act of 2002

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further enhanced the tools available to the Federal Government to

make E-Grants technology-based solutions work, including such

provisions as authorizing electronic signatures and addressing internal data sharing between agencies.

Today we’ll take a close look at the ways we have been conducting business, both past and present, with the goal of making sure

all of our recent legislative and technology-based solutions are on

the right track and meet the desired mutual goals. In that light,

I hope we will be able to accomplish several things at this hearing.

We need to determine if we are on course with full compliance

with the Federal Financial Assistance Management Act of 1999.

We need to make sure that E-Grant solution provides a complete

and amenable solution to all stakeholders. We need to assure that

we are getting full cooperation across all agencies, as well as coordinating with the grantee community on all improvements, or

changes—I guess improvements are in the eye of the beholder. We

need to make sure adequate resources are on the table from each

grantmaking agency, as well as make sure we are promoting a productive climate that rewards change-agents and a citizen-centric

culture within agency leadership.

We hope to determine if further legislative action or housekeeping legislation is required to keep the process on track, and

take a fresh look at the additional benefits derived from a unified

grants management system with an eye on utilizing this system to

improve post-award accountability, improve internal analysis capabilities, reduce duplicative Federal programs and reduce the number of required printed reports on grants that can be derived in

realtime based on the resulting unified data base.

The Federal Financial Assistance Management Act has an 8-year

timeline. We are at an appropriate half-way point to evaluate all

of the moving pieces, make sure we are headed in the right and

same direction with this effort and ensure our laws and regulations

continue to allow us to succeed in this enormously valuable national State and local partnership.

[The prepared statement of Hon. Adam H. Putnam follows:]

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Mr. PUTNAM. We are delighted to have a distinguished panel of

witnesses for each of the panels, and I’m pleased to be joined by

the vice chairwoman of the subcommittee, the gentlelady from

Michigan, who has some hometown folks here who are participating in this panel as well. So with that, I’ll recognize Mrs. Miller

for her opening remarks.

Mrs. MILLER OF MICHIGAN. Thank you, Mr. Chairman. I think

this mic has a life of its own here, but I probably don’t need it.

And your day started off on an airplane with some conversation

from a lady. My day started off buying a $22 pair of eyeglasses at

CVS this morning, so we’ll see how they work.

I certainly want to thank all the witnesses, including those that

are coming from Michigan to testify before the subcommittee. I certainly look forward to hearing what all of you have to say there.

The E-Grants Initiative that was outlined in the President’s

Agenda E-Government Component, is an example of how the Federal Government can effectively use technology to decrease costs

and to improve services.

So it is certainly vital that this initiative be implemented swiftly

and with a high degree of success, and with the amount of reform

that presents itself within the Federal realm, successful implementation of the E-Grants Program can act as a model as this subcommittee examines measures to increase the use of and effectiveness of technology.

And with the passage of the E-Government Act of 2002, there is

now a legal authority to ensure the development of E-Government

Initiatives, including E-Grants, but legal authority does not guarantee success, as has been seen by many reform initiatives of the

past.

So I’m pleased that there are so many distinguished individuals

who are familiar with the user side of Federal grant programs that

have taken the time to testify before us today. Successful reform

is not possible without the input of those who are actually utilizing

the programs, of course.

Currently there are 26 agencies in the Federal structure who are

distributing over 210,000 awards. Needless to say, there is obviously redundancy, and some unnecessary waste as well, between

the differing agencies who are administering the grants, with similar objectives, and waste within agencies who allocate grants spanning different programs.

The implementation of E-Government can be a very good thing

if done correctly, but the Federal Government is currently finding

itself in a situation sometimes where each agency has set up its

own electronic application, its own reporting processes, and this

has complicated matters for groups looking to obtain Federal

grants. And though this may cause some problems, the mere fact

that agencies are really trying to work together now to simplify the

grantmaking process, I think, is extremely promising. So I look forward to working with the members of this subcommittee and the

Government Reform Committee as a whole and certainly the

groups and individuals who use these grants, including many of my

constituencies, to improve the Federal grantmaking process as

well.

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Thank you, Mr. Chairman. I’m certainly looking forward to hearing the testimony today.

Mr. PUTNAM. Thank you. Our first panel of witnesses are experienced with congressional testimony. You understand the light system and the timing system. So we’ll get right to it. Please rise, and

we’ll do the oath.

[Witnesses sworn.]

Mr. PUTNAM. Note for the record that the witnesses responded in

the affirmative.

And we will begin with our first witness, Ms. Springer.

Linda Springer, on March 31, the Senate confirmed the President’s selection of Linda M. Springer as Controller of the Office of

Federal Financial Management within OMB.

Prior to her appointment, Ms. Springer served as Counselor to

the Deputy Director for Management at OMB. I was most impressed by the remarks she made to our colleagues on the Government Efficiency Subcommittee several weeks ago expressing her

priority to further standardize and automate financial transactions

and improve our ability to manage and account for resources more

wisely using IT. This will be especially important in managing Federal grants.

I believe this marks the first subcommittee hearing we’ve had

without Mr. Foreman, and you are a welcome addition to our hearing, so please proceed.

STATEMENTS OF LINDA M. SPRINGER, CONTROLLER, OFFICE

OF FEDERAL FINANCIAL MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET; DR. ED SONTAG, ASSISTANT SECRETARY FOR ADMINISTRATION AND MANAGEMENT, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES LEAD AGENCY FOR E-GRANTS INITIATIVE AND PUBLIC LAW 106–107

COMPLIANCE; AND PAUL POSNER, MANAGING DIRECTOR,

FEDERAL BUDGET AND INTERGOVERNMENTAL RELATIONS,

U.S. GENERAL ACCOUNTING OFFICE

Ms. SPRINGER. Thank you, Mr. Chairman.

I am pleased to testify before the subcommittee today on the status of our efforts to implement the Federal Financial Assistant

Management Improvement Act, and that act requires the Office of

Management and Budget to direct, coordinate and assist Federal

agencies in establishing a common application and reporting system and an interagency process for addressing the grant streamlining work.

As you noted, Mr. Chairman, the Federal grants account for

nearly $400 billion in fiscal year 2003 alone, and that is over 20

percent of the overall government budgeted outlays. So it is a very

significant activity.

Annually, the Federal Government makes over 218,000 awards

under 600 different programs administered by the 26 Federal agencies. The grantee community ranges from sophisticated entities

with state-of-the-art technology to small rural organizations that

may not even have computer access. The agencies use a variety of

administrative processes and requirements both governmentwide

and agency-specific to support the grants life cycle and provide

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foundation for agency and recipient compliance with laws, regulations, requirements including fiscal accountability.

There are significant opportunities to reduce these variations and

thereby meet the purposes of the act. To shepherd the implementation of the act, we’ve been operating with four interagency simplification work groups: Pre-award, post-award, audit oversight and

electronic processing as well as a policy and oversight team. Additionally, under the President’s Management Agenda’s Expanded EGovernment Initiative, the E-Grants Project is underway addressing the work of the former Grants Management Council Electronic

Processing Work Group, and the HHS agency is the lead for EGrants. And you’ll hear more about that today from Ed Sontag.

Interagency work is focused on various process improvements

and administrative changes that will make it easier for recipients

to identify, apply for and manage the programs funded by the Federal Government. In accordance with the requirements of the act,

agencies have consulted with non-Federal constituencies via several actions, including a unique electronic mailbox to accept public

comments on the grants streamlining effort and posting invitations

to comment on several agencies’ grant-related Web sites. Those

have been very active and have been a tremendous resource to us

as we’ve continued this effort.

The initial plan to implement the act was prepared jointly by the

26 Federal grantmaking agencies and submitted to OMB and the

Congress in mid-May 2001. Last summer each agency submitted its

update to OMB and the Congress, and we presented our annual report. This year’s progress report is due to OMB and Congress no

later than the end of August 2003. What I’m about to give you is

a flavor of what we’ll report at that time.

Every work group has access to the full set of comments that

have come in, and that has been factored into the decisions about

streamlining and simplification. The public and grantee community

have continued to be involved via conference presentations, media

news releases, information available on grants-related Web sites

and the formal 60-day comment period of each of our Federal Register proposals. We’ve made every effort to make sure all stakeholders have the opportunity to provide substance and comments that

will be taken into account before anything is made final.

In the Pre-Award Work Group, we are dealing with standard formats for announcements and funding opportunities. A standard format was proposed last August with an associative policy directive.

We’ve received favorable public comments, and we expect to have

the standard announcement finalized soon.

FedBizOpps is an initiative to establish a central Internet source

for agency announcements to make it easier for potential applicants to learn about announcements of funding opportunities. OMB

circulated the final data elements for this FedBizOpps synopses to

agencies again this month and expects to issue data standards very

soon.

Grant applications: This effort has three initiatives related to establishing governmentwide data standards, creating an electronic

portal and a single assurance statement that would show compliance with the award terms. Again this month OMB published in

the Federal Register a notice proposing those standard data eleVerDate 11-MAY-2000 09:25 Oct 29, 2003 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 D:\DOCS\89456.TXT HGOVREF1 PsN: HGOVREF1
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ments for both electronic and paper applications, and that will

eliminate two of the current forms. We expect comments back by

June, after which we’ll finalize that data standard.

Standard award terms and conditions: The pre-award group has

started to work governmentwide to develop standard terms, and

that would relate to the administrative requirements in the two

current OMB circulars, A–102 and A–110 as well as national policy

requirements. That is work that is ongoing and will be ongoing

through this year.

There is a lot more that you may want to follow-up with me on,

beyond the 5 minutes later on, but there is a fair amount in the

post-award side as well as additional post—beyond the post-award,

general audit oversight and other activities, similar to the PreAward. I can elaborate on those later for you, but a lot of activity

on the OMB side as well as the group as a whole as far as getting

announcements for reducing current procedures, reducing requirements and simplifying the overall process.

Overall, we’ve got good feedback on any of those that we have

published, any of those through the Web site that we’ve had forums

on, and we’d be happy to report on those in more detail to you.

Mr. PUTNAM. Thank you very much, Ms. Springer.

[The prepared statement of Ms. Springer follows:]

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Mr. PUTNAM. Our next witness is Dr. Ed Sontag. Dr. Sontag has

been Assistant Secretary for Administration and Management at

the Department of Health and Human Services since October 2001.

In that role he serves as the top adviser to Secretary Tommy

Thompson on all major department management issues including

grants management. With HHS managing more than a third of all

Federal grant funds distributed, Dr. Sontag and his staff have been

directed by the President and OMB to lead the E-Grants effort and

ensure compliance with the Federal Financial Assistance Management Act.

Welcome.

Mr. SONTAG. Good morning, Mr. Chairman, members of the subcommittee. I’m pleased to be here today to testify on what I think

is a good news story, on our progress in improving the Federal

grant process.

The Federal Financial Assistance Management Improvement Act

of 1999 is clearly watershed legislation. It not only provides the

mandate but the impetus for Federal agencies to improve the efficiency and effectiveness of the Federal financial assistance process.

I’m here today to share with you how we are implementing this

legislation and how the E-Grants Initiative is transforming the

grant environment to the benefit of the citizenry of this country in

support of President Bush’s Management Agenda and Public Law

106–107.

The President’s Management Agenda is instrumental in achieving the reform that is citizen-centered and focused on delivering results that matter to the American public. To that end, implementation of E-Grants will revolutionize the way in which the Federal

Government provides customer services to the public through improved accessibility, transparency, delivery, coordination throughout the grant life cycle.

The Department of Health and Human Services has demonstrated leadership in cross-government efforts to fulfill these

mandates, including serving as the managing partner for the EGrants Initiative.

With me today, in case there are any difficult and complex questions, is Mr. Charles Havekost, the Director of our E-Grants Initiative, and Mr. Mark Weisman, who is the Director of our Grants

Program and the Cochair of our Public Law 106–107 effort.

Both of these managers report directly to me, thus ensuring a

common thread of leadership and accountability throughout our efforts. The E-Grants Initiative became the vehicle for implementing

many of the improvements planned under 106–107. E-Grants will

create a unified electronic storefront for interactions between the

grant applicants and recipients conducting business with Federal

grantmaking agencies.

Grants.gov will simplify the process of finding information on

Federal grant opportunities, which will produce significant benefits

for, in particular, smaller applications and those that are novice

grant applicants.

HHS is reaching out to all of the Federal grantmaking agencies.

We have initiated pilot programs, conducted hands-on training and

are making ourselves available as a resource to agencies planning

for the full implementation of E-Grants.

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The E-Grants Initiative has been, and continues to be, vigorous

in its outreach and collaboration with groups such as the National

Association of State Auditors, Controllers and Treasurers, National

Association of Counties, National Council of American Indians,

University Members of the Federal Demonstration Partnership, the

National Council of University Research Administrators.

The first, and probably the most significant, benefit of the EGrants Program will be the search and find function of Grants.gov,

and in the past organizations and members of the public seeking

Federal grant assistance were made to suffer the burden of laborious searches through dozens of Federal agencies and multiple publications. The find functions of Grants.gov will solve this problem

by providing one central clearinghouse for all information on government grants, allowing the public to search by grant topic, eligibility or funding instrument.

Your constituents can also sign up for e-mail notification whenever a grant they may be interested in is posted. On October 1st

of this year, applicants will be able to submit applications electronically through the Grants.gov storefront. To meet this October 1

date, we’ve initiated a pilot effort that will allow grantee participants to submit applications in an electronic format using standard

data elements to participating agencies. Looking ahead, we are

planning for phase 2 of our initiative, including an emphasis on

unifying and streamlining the management and reporting processes required of grantees. This will move us further toward our ultimate vision of a one-stop point of service for the American public.

HHS has assumed a proactive role in the implementation of Public Law 106–107 and the E-Grants Initiative at the department

level under Secretary Tommy Thompson’s leadership.

Grant funding opportunities are the means by which and

through which outstanding achievements can be realized in many

areas, including but not limited to medical research, education,

public safety and so on. Simplifying the ability to locate and apply

for grants is critical to ensure the opportunities for future achievements are not missed. President Bush’s Management Agenda requires this, and the American public deserves this. I appreciate

your time and attention. Thank you for the opportunity to be here

this morning.

Mr. PUTNAM. Thank you, Dr. Sontag.

[The prepared statement of Dr. Sontag follows:]

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Mr. PUTNAM. I next recognize Paul Posner.

Paul L. Posner is Managing Director for Federal Budget and

Intergovernmental Relations Issues for the U.S. General Accounting Office. He has testified many times before congressional committees on Federal budgeting and financing, performance budgeting and intergovernmental fiscal relationships. He is also an adjunct professor at Johns Hopkins and Georgetown Public Policy

Graduate Programs, and I understand is the author of a book that

grabbed my attention titled, The Politics of Unfunded Federal Mandates.

Mr. Posner, you’re recognized. Welcome.

Mr. POSNER. Thank you, Mr. Chairman. It’s a pleasure to be

here.

My testimony will be somewhat different than what you’ve heard

before. We at GAO have a mandate to evaluate the Federal Financial Assistance Act by 2005, and we will look forward to beginning

that over the next year and working with a variety of people in this

room. In the meantime, I thought what I would talk about is the

backdrop for the whole system that we’re looking at. In other

words, what we’ve heard so far suggests some promising and important efforts to simplify and standardize a system that is inherently fragmented. I thought I would read to you from an evaluation

of the grants system that I have here which says, ‘‘That the grant

system: one, lacks an adequate means for disseminating grant information; two, creates a high degree of funding uncertainty; three,

fosters complex and varying application and administrative processes; four, is fragmented with similar programs administered by

different agencies and with programs too restrictive to meet State

and local needs.’’

Now, this sounds very contemporary—like it just came off of the

e-mail this morning. In fact, this was a 1975 report GAO issued

called ‘‘Fundamental Changes Are Needed to Federal Assistance to

State and Local Governments.’’

Now, what this says is there are and have been some heroic efforts at the Federal level and the State and local level to coordinate

a very confusing and complex array of programs that we have, a

myriad of overlapping and duplicative programs. The coordination

that does exist often is done from below.

There is a lot of creativity out there in packaging programs, but

it often takes heroic actions. Simplification and standardization can

help. We need to ally ourselves at the Federal level with those

seeking to try and make comprehensive program changes, but we

also need to keep our focus on the root cause: This is a Federal assistance system that is inherently fragmented.

And I wanted to first point to this chart here which shows that

notwithstanding some of the earlier initiatives to block grants in

the early 1980’s, the number of categorical grant programs has

grown to roughly 660, where we stand today.

The second chart very briefly shows the composition of those programs. The top 20 programs comprise 78 percent of the funds.

What is important to look at is the right-hand side of that chart,

that 169 of these grants have less than $5 million per year available, in other words, less than 1 percent of all grant funds go

through 169 programs.

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Now, I don’t challenge the creativity of people to use money in

whatever amounts but I think we can all imagine a less burdensome and costly administrative system to deliver these kinds of

funds.

Now, these problems come home to persistent problems in performance that GAO has identified in many different areas, whether

it is reports recently on the 50 homelessness programs in eight

Federal agencies, the 23 housing service programs in four Federal

agencies, the 26 food and nutrition programs in six Federal agencies or the 44 job training programs in nine agencies, even after

the Workforce Investment Act consolidated a number of them.

I won’t go into more detail now, but with the time permitted we

can talk later about some of the problems that this prompts in

service delivery and accountability.

The last point I wanted to talk about was Homeland Security, because we have seen how important coordination is, particularly at

the local level, to address these new threats to the Nation. We, in

our very well-intentioned way, are offering a variety of assistance

programs that are also fragmented, complex and difficult to manage.

We have the next chart here that shows the pattern that we see,

even after the reorganization of the Department of Homeland Security. We have a number of—16 that we count—major Federal assistance programs that go down to State and local governments

through a variety of conduits, some to States, some to different

State agencies within States, some directly to local actors like firefighters, law enforcement personnel and hospitals. Many are very

different in the way they distribute the money. Some are formula

based. Some are project grants. Some have matching requirement.

Some don’t. Some have maintenance of effort. Some don’t.

There is quite a bit of overlap in activities; 12 of the 16 grants

are available, for example, for training, 7 for equipment, and 8 for

exercises. And, again, this is post-DHS reorganization, and we

know, for example, that several of those programs that aid State

and local preparedness are, in fact, still in different directorates

within the department. So we still have a substantial problem with

a fragmented system for Homeland Security that remains to be addressed, and I think that is being discussed.

Now, my statement has a number of options that are available

to the Congress to address this in a more fundamental way. We’ve

blocked grants which consolidate and devolve authority and consolidated grants which don’t necessarily have to devolve authority.

There are models available where grants can be consolidated while

retaining accountability for strong performance goals and waivers.

The point is to say that these efforts that we are going to be

monitoring are important and somewhat heroic in some ways, but

they take place in the context of a highly fragmented system.

Thank you.

Mr. PUTNAM. Thank you very much, Mr. Posner.

[The prepared statement of Mr. Posner follows:]

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Mr. PUTNAM. At this time we will move to questions, and we will

begin with Mrs. Miller.

Mrs. MILLER OF MICHIGAN. Yes. I think for Ms. Springer, you

were mentioning about the e-public mailbox that you have and

some of the public comments that you get and also the

FedBizOpps, which I wasn’t quite sure what that was. Maybe you

could expand on that. But as you mentioned the phrase ‘‘customer

service,’’ I’m happy to hear people talk about that. Obviously we

can’t have that being a novel concept for the Federal Government

or any level of government. It really needs to be an operative

phrase. So we think about the end users in that.

And as you are getting public comment and these kinds of

things, how are you utilizing that kind of concept? I mean, they are

the end users, right? They are obviously communicating with you

on how they are finding the application process or perhaps whatever kind of comments they are giving you. Are you utilizing those

kinds of comments in your business planning? Are you finding any

particular trend lines with any of the public mailbox, the e-public

mailbox that is enlightening?

Ms. SPRINGER. Yes, we are. The answer to that is yes, they are

enlightening, yes, we are using them. The comments that we got

are typically focused to the particular initiative. There are obviously a broad range of initiatives. So that they are very helpful beyond the general feeling of, ‘‘yeah, this is great, we need it.’’ They

are very specific to the initiative. Every work group has full access

to those comments. No initiative goes out without review fully of

all the comments that come in. Everybody that is involved from the

government side has access to them. They are discussed. They are

tested against the proposals that are coming out and both before

any particular Federal Register announcements, for example, and

then comments that come in on kind of the second wave that comes

in once it is publicly announced in the Federal Register.

And all of those have been helpful. Generally they’ve been favorable as well. We find that not only helpful but favorable. So we

take that we’re on the right track in most cases.

Mrs. MILLER OF MICHIGAN. That is unusual. Usually you just

hear the negative comments but not the positive ones.

Can you tell me what the FedBizOpps is?

Ms. SPRINGER. Yes. The FedBizOpps is a portion of the Internet

site for the General Services Administration. We’ve established

under this E-Grants Project—and Ed could elaborate further, if I

go a little bit astray here—but we’ve established a governmentwide

E-Find Function within that FedBizOpps portion. So it’s Web-enabling through that GSA capability, the ability to find information

about grants.

Mrs. MILLER OF MICHIGAN. Thank you, Mr. Chairman.

Mr. PUTNAM. Thank you, Mrs. Miller. Let me begin my questions

with Mr. Posner.

What, if any, requirements under Public Law 106–107 are not

being addressed currently?

Mr. POSNER. Well, this is something we have not yet evaluated,

and as I said, we’re positioning ourselves to start looking at as

these changes are actually rolled out. And so we look forward to

looking at the substantial activities that have taken place and at

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how different agencies are working with HHS’s leadership to implement the act. But we’ve we have not yet looked at that.

Mr. PUTNAM. Dr. Sontag, are we currently in compliance with

the law?

Mr. SONTAG. I believe we are.

I can speak directly to Department of Health and Human Services. I think not only are we in compliance with the law, I think

we’re using it for constant self-evaluation of how we award grants,

of how we can actually streamline them. I know in our department,

which has a history of very independent agencies we’ve been using

106–107 process to bring consistency across our department.

Mr. PUTNAM. You are also the chairman of the overall task force

coordinating this, aren’t you?

Mr. SONTAG. No, I’m not.

Mr. PUTNAM. Ms. Springer, are we fully compliant with the law?

Ms. SPRINGER. I believe we are in compliance with the law. One

of the things that was in the original report that came in 2001 is

a checklist of action steps by year for each calendar year, and if

you go down that list, as I have had opportunity to do, I find that

with the exception primarily of the shift from the original vision for

technology to the E-Grants as that has emerged under the President’s Management Agenda, I was able to check off the box under

every single one of those activities.

Mr. PUTNAM. Are all grantmaking entities required to use the EGrants process?

Ms. SPRINGER. They are. There are some that are still moving toward it. So, for example, there is a requirement to use certain payment systems for making the grants payments and disbursements.

There is one for the Defense Department and two others that are

systems that are specified. Of the 24 main agencies, all of them

have designated which system. Fourteen have already migrated to

it. The other 10 are already in the process of waiting for changes

or in the process of migrating.

So that is an example of compliance, and I would say activities

are in line with the expectations in all those.

Mr. PUTNAM. What agencies predominantly make up the small- est 169 grants, those under $5 million? Are they concentrated in

any one particular area?

Mr. POSNER. I don’t think they are concentrated in any one particular agency. We could provide you with a list of all those for the

record. A number of them, I believe, are in HHS.

This is something, by the way, that has been a persistent, perennial issue. Fifteen years ago we reported much the same finding,

so that there are a number of programs that are very small.

Mr. PUTNAM. In your review, and I understand that y’all have a

more comprehensive review underway, have you made observations

or come to any conclusions on the proper channel for these grants?

In other words, there are some thoughts of only distributing Federal moneys to the States and then letting the States make that

next leap? And I’m sure we’ll have some input from the counties

later. Or is there any evidence that shows that it’s better directed

directly from the Federal Government to the end user?

Mr. POSNER. That is a good question, and it is obviously one

that’s very important for the Homeland Security debate.

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I think there’s a couple of things to consider, and we are in the

process of looking at this.

One is that giving money directly to the State at least ensures

some coordination throughout the State and that there’s some possibility of promoting the kind of collaboration among local governments within regions. One of the emerging challenges within

Homeland Security is the need to have governments within a region work together to realize the economy of scale that the problem

requires.

On the other hand, many local governments, let’s say, do not

have a completely harmonious relationship with their States, and

the extent to which the problem is concentrated at the local level,

may cause Congress to mandate direct pass-throughs, like in the

education area. Some of those Homeland Security Grants mandate

an 80 percent pass-through to the local governments. Some there’s

a variety of things that you can do to both realize some of the

broader State planning advantages while nonetheless being fairly

sure that the money, in fact, is going to get down to the places

where the needs are greatest.

Mr. PUTNAM. Ms. Springer, do you know how much money the

Federal Government spends in managing the grants process and

what that would be as a percentage of people who contribute to

charity? People, they like to know that 85 percent or 95 percent of

what they give to Good Will or the United Way is spent on providing services. How much does it cost for us to actually administer

169 different grant programs that are less than $5 million each?

Ms. SPRINGER. That is a good question. I don’t know the answer,

but I will find that out for you. It makes sense to find that out.

I think certain agencies are structured differently. So, for example,

in one agency there may actually be a grants management function

separate and apart for example, from the CFO’s office, and some

of the other agencies that are less grant-intensive, it might all be

done out of a CFO shop.

So we could certainly find that out.

Mr. PUTNAM. I think it’s an important thing to know. In testimony that we’ll have from the second panel that I read—I believe

it’s from the University of Michigan—they single out NSF and NIH

as being tremendous examples of how things can work and perhaps

others as not being so.

But I think it’s important for us to know what it’s costing us to

administer these, and at the end of the day, who actually holds the

grantees accountability for those funds being spent? Is it your job?

Is it the agency’s job? Is that delegated to State and local governments? Who actually does that?

Ms. SPRINGER. Well, it’s a combination. The agencies are responsible from an audit standpoint for the awards that are granted by

their agencies. We have the provisions of the Single Audit Act, for

example, that reinforces the effort to make sure that the money is

spent as it is expected to, there is no fraud, waste or abuse.

Additionally, one of the things we are looking at very carefully

as a result of the Erroneous or Improper Payments Act of 2002

passed late last year, is grants programs. That is a portion of that.

So that would include grants that are distributed directly from the

Federal Government as well as those that go to the States and any

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of those are within the purview of review from an Erroneous Payments standpoint. So that would be the responsibility that we

would work with the agencies on.

Additionally, from an overall effectiveness as opposed to just the

fraud or the efficiency of the spending, there’s also analysis of the

purpose, are the dollars going to the purpose that we expect and

the program results? One of the things that the administration is

doing—it started with this last budget cycle—is the program assessment process through the tool called the PART. And there were

a third of the PARTS that are done this year related to grants programs. So there are several initiatives, a combination of the agency

level, the Single Audit Act work, as well as the Erroneous Payments and the PART process that are meant to evaluate effectiveness of the programs.

Mr. PUTNAM. I was home doing town hall meetings for the past

2 weeks over the district work period, and one of the things that

came up very frequently with law enforcement officials is the

amount of time that it takes to receive the money after having

been notified that they’ve been awarded the grant, and I suspect

that may not be limited to law enforcement.

What is the average time that transpires between the awarding

of the grant and receiving the money?

Ms. SPRINGER. I don’t know the answer to that question, but,

again, I could find that one out. I don’t know if anyone else does.

Mr. PUTNAM. Mr. Posner, do you know?

Mr. POSNER. No. I think it depends on the type of grant and

whether you have a continuous relationship, for example, if you get

the grant annually renewed versus a one-time kind of thing. There

is a lot of variables that enter into that. But I don’t know of a particular number, actually.

Mr. PUTNAM. Dr. Sontag, one of the concerns that will come up

in the second panel involves the differences between agencies who

deliver grants to a specific institution or entity versus to a particular individual. Does HHS have a policy on who the actual grant recipient is, and if so, could you elaborate on that?

Mr. SONTAG. Generally 99 percent of the time our grants go to

agencies. With research grants, there’s usually a principal investigator designated, and in rare cases if that principal investigator

would move locations, the grant sometimes could go along. But

very, very few of our grants are awarded to individuals.

Now, the exception of that would be training grants, scholarships

and the like.

Mr. PUTNAM. And, again, we’ll get into this deeper in the second

panel, but I wanted you to have an opportunity to comment on it.

For example, the difference between administering a grant to a

specific university or even university system versus to a specific researcher who then has the flexibility to adjust the grant application

or adjust the commitments or timelines without running it through

some clearinghouse at the State university system or within that

research facility.

Department of Education, as an example administering grants to

a school district versus an individual teacher or an individual principal, just as examples.

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I understand that a methodology has been developed to determine the level of resources that each agency can bring to the table.

Can you name some of the agencies that have been particularly

helpful in providing resources and leadership who have been key

players in that process?

Mr. SONTAG. In the E-Grant process?

Mr. PUTNAM. Yes.

Mr. SONTAG. Well, certainly within the Department of Health

and Human Services the National Institute of Health is essentially

going to be the major player of consolidating our E-Grants efforts.

The grants dissemination, application process, etc., will be through

essentially a filter at NIH. We have smaller agencies within the department that have very small grant programs, and we’re working

very closely with them to bring them into the fold.

Mr. PUTNAM. Now, earlier I asked you if you chaired the task

force, and I may not have been particularly clear. Is it correct that

HHS is taking a lead role in implementing the E-Grants Program

with OMB?

Mr. SONTAG. Yes, sir. I’m sorry. I thought you asked me if I was

Chief Financial Officer.

Mr. PUTNAM. I apologize. I probably did. But I just wanted to

clarify that. So I apologize, for both of our sakes.

One of the key things that runs through these hearings on a variety of issues but particularly the E-Government Initiatives is that

the obstacles aren’t particularly technological in nature but cultural.

Could the three of you please comment on the cultural or the

human capital personnel management-type challenges that we face

in reforming grants management, beginning with Ms. Springer.

Ms. SPRINGER. I think that one of the things I have noticed is

that across all of these grantmaking agencies, you have some initiatives that have started at the agency level. Some agencies have

been slower to respond on their own. So prior to a governmentwide

approach that tries to harmonize and simplify down to just one approach, you have some agencies that have just on their own moved

ahead.

So you’ll have a particular department—I’ll mention the Department of Education, for example—that has advanced its own initiative. One of the things that we need to do is to harmonize them

back in with other agencies that maybe haven’t done a whole lot.

So that is one cultural variation that we need, and in one case

you’re trying to move them up to a state-of-the-art activity and responsiveness. In the other case, they might view it as a step back.

In fact, it isn’t. Often we can leverage off of what they’ve done, but

you do have a very wide variety, spectrum of existing approaches

that we need to harmonize.

Mr. PUTNAM. Dr. Sontag.

Mr. SONTAG. I’d like to speak to it from two vantage points.

First from the HHS grant consolidation effort. HHS has had a

history of a very decentralized agency, very independent, very productive agencies, the National Institute of Health, the Center for

Disease Control, FDA and so on. Their quality and their independence have made it more difficult to consolidate grants.

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At the same time, we think we can achieve considerable cost saving to the American public by consolidating essentially the grant

management process at the department level and even at the agency-head level. We have many more grants offices than we need.

The policies sometimes contradict each other, and we’re working

very hard to issue consistent policies across the department. We’ve

initiated a review of all grant announcements that come out of the

department. To that end, we’re looking for length. We’re looking for

ease of application. We’re looking for simplicity of language, and

we’ve made I think great strides.

The same issue, Mr. Charles Havekost administers our E-Grant

Initiative across government. We’re finding similar problems,

where agencies have had a history of being very independent and

doing things the correct way according to their sense to give up

data points, give up data cells, information, is going to be a very

complex challenge.

But speaking particularly to 106–107 in the Department of

Health and Human Services, we think we can improve quality of

grants administration and save the American public considerable

dollars.

Mr. PUTNAM. Mr. Posner.

Mr. POSNER. Well, it’s always been difficult for agencies carrying

out related programs in different agencies to address and coordinate. They have different constituencies and different congressional

focuses.

One of the things I would comment on is, there’s a phenomenon

that is called ‘‘picket fence federalism’’ which talks about how specialists at each level of government form alignments with other

specialists. Highly specialized and trained and expert people sometimes get used to dealing with their counterparts at State and local

governments without looking at the collateral relations they have,

either with related programs or even with their nominal superiors.

Very often mayors are in some ways dealt out of this process, and

that has been a classic problem with the grant system that we

have, which I think it falls in the cultural realm.

The other is the different Federal roles across different Federal

programs. Programs have all different sorts of positions vis-a-vis

the Federal Government’s relationships with nonFederal parties.

Sometimes it’s devolutionary; sometimes it’s partnerial; sometimes

it’s highly centralized. The administrative processes can be standardized, but coordinating the fundamentals of oversight are going

to be different.

Mr. PUTNAM. What are the penalties for agencies who are not

compliant, whether with the E-Grants portion or 106–107?

Ms. Springer.

Ms. SPRINGER. I’m not aware that the law itself actually specifies

any particular penalties. We expect that the agencies are going to

be compliant. We don’t have any reason to think that they won’t

be. From the standpoint of penalties, frankly I haven’t considered

it to any great degree, because we have gotten cooperation across

the board, and as I mentioned earlier, we are on track on everything.

In my 4 weeks since I’ve been confirmed, I haven’t come across

penalties I guess is the fair answer.

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Mr. PUTNAM. Maybe that is one way to look at it. But if I have

a blank piece of paper here with Homeland Security, essentially.

We just created it. It’s already a mess. We know that it’s going to

be heavily driven by a grants process, because the nature of Homeland Security is that it’s not just here in Washington, DC. It’s in

EMSs and fire departments and sheriff’s offices.

So you’ve got a clean slate basically. There’s still a little bit of

time to start that one, with the lessons of 100, 200 years of picket

fences. So how should we clean that chart up, now that we have

the opportunity to at least make one department a model without

having to deal with the cultural resistance that’s built up over

time?

Ms. SPRINGER. I think that what our effort is going to focus on

is the administration. There are two pieces here. I think there’s the

administration effort that the act is asking us to work on. There’s

also the substance of consolidating programs, and it strikes me

that there are almosts of both here.

One is just the construction of the programs themselves, to the

extent that you have six or eight different entities serving similar

purposes, that needs to be brought together from market standpoint. But the administration aspect, which is within the scope of

the act, I think works alongside of that. So certainly with the administration of it, we can harmonize that so that there is one way

to get to all of those, but the fact that there remains six different

offerings or programs is something that, I think, is outside the

scope of the act but that we should try and influence.

Mr. PUTNAM. Hope County, FL, in considering material help to

better prepare my Health Department to deal with a bioterror attack, do I call HHS for grant money or the Department of Homeland Security?

Ms. SPRINGER. What we’re trying to do with this act is to have

one place that will have all of those listed. At this point, it looks

like it’s constructed in a way that you have all of those, and, I

agree with you that it’s set up in a way that’s not customer service

oriented, if you will. But, again, the program construction is something that I think we can help influence. If that’s within the scope

of this, then that would be an expansion I think of what we’re

doing currently.

Mr. PUTNAM. Mr. Posner, you’re an adjunct professor. Get a little

academic on us and tell us how it ought to be.

Mr. POSNER. This is where the rubber meets the road. I think

you put your finger on the most important issue here, and we have

urged some kind of consolidation. Just take the first two boxes on

the left. The ODP which was imported from Justice and FEMA

really substantially fund the same things: sometimes different recipients, but they fund training, exercises, equipment and the like.

They have different rules, different formulas. Now, they are also in

the same department but in different directorates. At the very least

one could look at the model of consolidating funding streams. It

doesn’t necessarily mean you have to go all the way to block

grants.

In my statement, I talk about the spectrum. I mean, block grants

have traditionally been a way to consolidate and devolve authority.

You can separate those two things out. You can consolidate grants

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like EPA has done with the performance partnerships and still

hold the States or local governments accountable for results, assuming you can measure and agree on the goals that you’re trying

to achieve. Now, we may not be there yet in Homeland Security.

We may not have consensus about how you measure preparedness,

but we know some of the fundamentals. We know something about

training, mutual-aid agreements, the need for exercises, so we have

some sense of what we want these locals to do, and we have possibly the foundations to form what EPA calls a performance partnership.

Then the other side of the spectrum is where you accept the existing system and deal with the pain points on an as-needed basis,

which can be, you know, an expedient certainly better than nothing

in some sense but not the fundamental change I think that you’re

pointing to.

Mr. PUTNAM. Mrs. Miller, I have vastly exceeded my time allowance. You’re recognized for as long as you need.

Mrs. MILLER OF MICHIGAN. Thanks. Just a couple of quick questions, Mr. Chairman. I appreciate that.

I’m going to get back to this whole concept of E-Government and

customer service in particular with E-Government. Ms. Springer

was saying it’s been 4 weeks since she has been confirmed. I’m a

new Member. I’ve been here for 4 months, and I’m not the biggest

technology person in the world. In Congress, we’re trying to use our

individual Web sites to assist our constituents. And it’s one of the

things, particularly in my district office, my district directors are

saying you cannot believe all these different grants and the kinds

of questions that people are asking in order to access these different grants and the information.

First point, as you mentioned, is there some way that you will

then be assisting the individual Members of Congress? We’re trying

to get our Web site up and going now where we’re interacting at

length with CRS for all the different grants. We sort of are just

cannibalizing their site. Do you have a plan for assisting the individual members in using all this grant applications as we get organized here?

Mr. SONTAG. We have no plan at this point to assist Members

of Congress.

Mrs. MILLER OF MICHIGAN. Yes. But you can’t be doing this in

a vacuum.

Mr. SONTAG. The ease of E-Gov is going to allow for the citizenry

of this country to access information. Persons calling from Polk

County or Ann Arbor, MI, looking for information right now would

find it is not just the Federal agencies dealing with that problem.

If it is within HHS, there would probably be a dozen. If we are successful—and I am confident that we will be—people will be able to

access accurate, very detailed information on where they should go

for grant information, the application process, etc. That is going to

be the service. Congresswoman Miller, we have made no effort to

strategize this for Congress, but I would be happy to entertain such

a request.

Mrs. MILLER OF MICHIGAN. We should certainly at a minimum

be able to drive people to a link to these kinds of things. The quesVerDate 11-MAY-2000 09:25 Oct 29, 2003 Jkt 000000 PO 00000 Frm 00065 Fmt 6633 Sfmt 6633 D:\DOCS\89456.TXT HGOVREF1 PsN: HGOVREF1
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tions that we’re all getting are what kinds of grants are available

and what is the process.

Perhaps this is not the right question for those of you, but, just

from an infrastructure standpoint, what kind of challenges are you

facing with 26 different agencies as your architecture, to make the

data bases interoperable? I’m sure you’re facing all kinds of challenges with that. It is interesting listening to Dr. Posner say you

are citing these material weaknesses from 1975 and here we are

now trying to get these agencies to talk to one another.

Mr. SONTAG. Speaking for HHS, it gives us enough data base to

work from where we have multiple different servers, delivery systems, etc. But the process that we outlined on E-grants is one of

the 26 Federal agencies coming together not under HHS’s rubric

but under a cooperative venture where we are looking at every

grant program to see how it could fit. I think people going into this

process had been willing to give up, and that’s the only way that

it is going to work.

The process we have worked out with OMB to fund the E-grants

initiative is that these 26 agencies are pledged to contribute X

amount of dollars depending on the size of their grant program. So

they are all, in a sense, partners with us. That has helped us deal

with many of the complexities. But I think many of the technical

issues are still ahead of us.

Mrs. MILLER OF MICHIGAN. Thank you, Mr. Chairman.

Mr. PUTNAM. Thank you, Mrs. Miller.

A followup question for this panel: Ms. Springer, will all agencies

be required to use the E-Grant system?

Ms. SPRINGER. Yes, they will.

Mr. PUTNAM. By when?

Ms. SPRINGER. We’re looking to—I’m going to defer maybe to Dr.

Sontag on the exact date. The first group is in 2003, end of 2003

pilot group, and then the final date for the rest is when?

Mr. SONTAG. Is 2004 and 2005.

Ms. SPRINGER. 2004 and 2005.

Mr. PUTNAM. So they’re divided into three groups?

Ms. SPRINGER. I’m not sure if it’s three actual dates. I know it

starts in the fall, October 2003. Do you have a schedule there?

Mr. SONTAG. OMB is going to put a policy in place that will essentially require posting of all announcements through the E-Gov

process that I talked about by October of this year.

Mr. PUTNAM. All posting will be on-line?

Mr. SONTAG. Posting as a grant announcement.

Mr. PUTNAM. By October 2003?

Ms. SPRINGER. The grant announcement piece of it.

Mr. PUTNAM. Just an awareness portion. They won’t be able to

apply on-line by October, will they?

Ms. SPRINGER. The E-Apply part is the part that will come second. Over the course of the 2003 to 2005 timeframe, by the end of

2005, we will have not only the announcements but also the apply.

Mr. PUTNAM. Thank you very much.

Any other last comments that this panel would like to make before we move to panel two? Dr. Sontag.

Mr. SONTAG. Just one question, Mr. Putnam. I want to be a voice

for the small grantee. I know in the age of consolidation large

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grants are considered to drive much in our country, but some of the

best grants I’ve ever seen funded have been $30,000, $40,000, what

I call storefront grants to start local early childhood programs.

Whatever we do in consolidation, I think we should still allow room

for what I call the small grantee.

Mr. PUTNAM. Any other comments?

Thank you very much, panelists. We appreciate your support. We

will take a 5-minute recess while we set up the second panel.

[Recess.]

Mr. PUTNAM. If the second panelists would please take their

seats and then immediately rise again to be sworn in.

I would also ask if there is anyone attending with the witnesses

who will be providing information to the subcommittee, backup information, ancillary information, to please rise and also be sworn

in.

[Witnesses sworn.]

Mr. PUTNAM. I would note for the record that the witnesses responded in the affirmative.

We will get right to our second panel.

We will begin with Karen Miller.

In addition to representing the citizens of Boone County, MO, as

a county commissioner for more than a decade now, Karen M. Miller joins us as president-elect of the National Association of Counties. She will take over the presidency in a few months, where I

understand she has already exhibited an interest in making sure

localities across America, including Boone County, are fully utilizing the Internet to improve services for citizens and improve intergovernmental alliances.

Allow me also to extend my condolences on behalf of the entire

subcommittee, as I understand your grandmother passed away last

week. Your being here today under these circumstances exhibits a

true commitment to your organization’s membership and goals.

We are delighted to have you here. If you have friends or family

who would like to take a picture of you testifying before Congress,

as humble a congressional gathering as this is, you are certainly

welcome to come around here and do that. I know that is a pretty

neat thing.

Welcome. You are recognized.

STATEMENTS OF KAREN M. MILLER, PRESIDENT-ELECT, NATIONAL ASSOCIATION OF COUNTIES, COMMISSIONER,

BOONE COUNTY, MO; MARVIN G. PARNES, EXECUTIVE DIRECTOR OF RESEARCH ADMINISTRATION, UNIVERSITY OF

MICHIGAN; AND KATHY CROSBY, DIRECTOR OF WORKFORCE

DEVELOPMENT, GOODWILL INDUSTRIES INTERNATIONAL,

INC.

Ms. MILLER. Thank you very much, Mr. Chairman.

Good morning, Mr. Chairman and members of the subcommittee.

My name is Karen Miller, and I am a county commissioner in

Boone County, MO. I currently serve as the president-elect of the

National Association of Counties.

NACo, the National Association of Counties, was established in

1935 and is the only national organization representing county governments in Washington, DC. Over 2,000 of the 3,066 counties in

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the United States are members of the National Association of

Counties, and we represent 85 percent of the population. Federal

grants are vitally important to county budgets, especially in these

difficult economic times, so we thank you for the invitation to appear before you today.

I would like to make three key points on the state of the Federal

grants management system and the progress that was outlined in

the Federal Financial Assistance Management Improvement Act of

1999: First, local governments, particularly in rural America, must

overcome several obstacles to find and apply for Federal financial

assistance. Second, NACo supports the streamlining and simplification of financial assistance programs that has occurred since the

passage of the Federal Financial Assistance Management Improvement Act of 1999. Third, by using technology, the Federal Government through E-Government initiatives such as E-Grants could remove the barriers that local governments experience.

Of those 3,066 counties across the United States, over two-thirds

are considered nonmetropolitan, or rural. Local elected officials

from these counties are at a disadvantage in the current Federal

grants disbursement system for several reasons. First, many of

those counties lack the professional staff capacity to identify the

myriad of Federal grants available. A 2001 NACo study found that

only 28 percent of rural counties have a grant writer on staff. The

percent of the rural counties that employ an economic development

professional is only marginally better at 38 percent. As a result,

these local elected officials are forced to try to become experts in

the Federal grants process themselves. However, county elected officials are predominantly part-time public servants who must balance their civic duties with professional responsibilities.

To illustrate this point, NACo quickly surveyed the 47 State associations of counties across the Nation. States with 100 percent

part-time county commissioners include Florida, South Carolina

and North Carolina. Additionally, in States that did have full-time

officials, these commissioners were primarily from the large urban

counties.

Small metropolitan and rural county officials can also turn to

their local regional development organization, known locally as

councils of government or regional planning commissions. These organizations are governed by the local governments they serve and

provide technical assistance in grants management.

According to a survey by the National Association of Development Organizations, the typical regional development organization

served six counties and 30 municipalities and administers 11 programs. However, their limited staff capacity, increasing responsibility and budget cuts have pushed these organizations to their limits.

Another emerging alternative are various private vendors that

aggregate grant announcements and information into sophisticated

but expensive on-line data bases. However, due to declining tax

bases and difficult budget constraints, these fee-for-service products

remain out of the reach for our rural counties.

The Federal Financial Assistance Management Improvement Act

of 1999 was passed to ease the burdens of local governments and

other grant seekers while also capitalizing on recent technological

advances. NACo supports the streamlining and simplification of the

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Federal grants process and is excited about the potential of the EGrants initiative.

I have met with Charlie Havekost, the project manager for the

Department of Health and Human Services, about the initiative

and have been impressed with his willingness to work with county

governments through NACo. Specifically, we would like to conduct

a pilot project with NACo’s rural action caucus which represents

about 1,000 rural elected officials nationwide. The caucus would

serve as a sounding board on the successes and impediments to the

E-Grants initiative and would be able to provide feedback on future

improvements.

Additionally, NACo will educate its members on the value of EGrants and encourage them to file grants electronically. We would

like to see a universal application for all Federal grants whereby

each Federal agency requires similar information.

Further, NACo believes that the Federal Government should develop a Web site and an electronic mailing list for grant announcements. I feel that there would be a greater awareness among the

local elected officials if such a site list were available.

In addition, it would be helpful if the Web site and mailing list

could be tailored based on the user’s interests and needs.

In addition, once a grant is identified and the elected official

would like to apply, the E-Grants platform must recognize the wide

disparity of Internet access in urban and rural America. Unlike

urban cities and counties, much of rural America lacks access to

high-speed Internet service. Consequently, Internet access for

many rural communities is sluggish, dial-up service that may be

subject to long distance telephone rates. Therefore, NACo supports

a system that does not require periods of Internet connectivity.

In conclusion, I believe that the Federal Government can build

on the success of the Federal Financial Assistance Management

Improvement Act and mitigate the challenges currently facing

rural elected officials.

Mr. Posner stated that he thought that grants should go through

the States to be able to do a more regional look and some continuity, and I concur with that as long as the language requires money

intended for local governments to be spent that way. As an example, the Federal elections reform that the Congress so graciously

supported, the funds for local elected officials to support equipment, in our State, our State has decided that there will be no

grants, it will be loans with interest if we need it, money to replace

that equipment. That was not the intention of the Congress, and

so I think that the language that was in the homeland security bill

was much needed, especially in the times that we are in right now

with all the State problems.

Again, I want to thank you, Mr. Chairman and members of the

committee, for allowing me to appear today and would welcome any

questions you might have. Thank you.

Mr. PUTNAM. Thank you, Commissioner Miller.

[The prepared statement of Ms. Miller follows:]

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Mr. PUTNAM. Mr. Parnes is our next witness. He is associate vice

president for research and executive director of research administration for the University of Michigan, a university that is particularly good at getting research money. He has served in that office

in some leadership capacity for the past 15 years. As vice president, Mr. Parnes is responsible for infrastructure, research administration, technology transfer, liaison with industry and day-to-day

oversight of Michigan’s university research units.

I know our vice chair is especially pleased when she has an opportunity to share the knowledge of wisdom of her fellow Michigan

residents with the subcommittee. Mrs. Miller, would you like to

make any further comments about the distinguished gentleman?

Mrs. MILLER OF MICHIGAN. I will just tell you, my father graduated from U of M. My husband graduated from Michigan State

University. I hope you won’t hold that against him, but we have

a constant thing in our family about the two universities.

But I’m so proud of the University of Michigan and the staff that

they have and the kind of product that you’ve been churning out

for literally generations. It is a national treasure, quite frankly. I

am very pleased to have you here today.

Mr. PUTNAM. Welcome.

Mr. PARNES. Thank you, Mr. Chairman and Members. I am delighted to be able to be here representing universities.

The University of Michigan has done well in the grants process. Of our $700 million a year in research expenditures, about $500

million of that is from Federal sources. We talk about fragmentation. We receive funds, I would say, from virtually every Federal

agency.

On the one hand, it speaks to a rich partnership in which universities and the Federal Government serve our citizens, but there is

certainly a lot of potential for administrative complexity, redundancy and waste both for us and the granting agencies.

We really believe the Federal Financial Assistance Management

Act is certainly outlining what’s required. We applaud the act and

the efforts to implement it. We believe, however, that from our perspective in the universities the pace has been slow and to date the

progress made by most government agencies for fulfilling the intent

appears to us to be minimal given the aggressive timeframe that

has been established. That’s a concern that we have.

We heard about a single product that is really emerging, which

is a pilot standard format for funding opportunity announcements.

That’s valuable, and we know there is other progress being made,

but we’re concerned about making sure it gets implemented.

I will focus on one area that is of concern to us and many other

universities where there has been promise but we have great concerns and that is electronic grant submissions, the application process. We find that there is a lot of labor involved in learning to use

all of the many systems that are still operating, so we have many

faculty staff and administrators who have to learn to use a great

host of systems.

I would like to make a few points as this program moves forward

that I think are important to us. We really value a single system

for Federal grant contact. We want this common face to be established. However, in the interim, agencies continue to develop what

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we call rogue systems. We call them rogue systems because they

are developed outside of the E-Grants initiative and require us to

fulfill a lot of the business requirements of those programs and

agencies at our expense.

We’re managing more than a dozen different systems in trying

to process our grant applications so we really hope that there will

be some effort to discontinue the development of these competing

programs and really come under a very clear mandate. We like the

vision of a single Federal system.

We think the E-Grants program under Charles Havekost is moving in the right direction. We applaud his efforts.

We would like to see more muscle behind the corralling of other

systems. Part of this, we need standardization. We’re interested in

reviewing the standards that are currently coming out for us to

work toward. Part of this is that we then have to develop the systems for meeting these standards. We have to develop internal

mechanisms, our own process for how to get data to the portals;

and in the past, it has been very hard. Other initiatives have failed

to get a common standard. So we really are hoping that OMB will

put some muscle behind getting a common standard that the agencies will all use.

We want systems that involve administrators as the point of contact for filling out grants. I know this varies in different areas, but

for universities we don’t want our expensive research scientists filling out forms. We want that done through administration. We

want the process to involve central grants offices.

We think NSF and NIH have gotten this right. They work with

the university in doing this. We don’t want to have individual faculty members modifying conditions of a grant for which we have

fiduciary responsibility. We need a system that works directly with

the universities.

Training. We need to make sure we have a lot of good training.

A lot of the systems that are in operation now are cumbersome, difficult to use and take a lot of effort to get people up to speed.

User involvement. We think there needs to be more. There has

been some. NIH has been wonderful. They have had an advisory

committee representing a broad spectrum of their grant recipients

that has met frequently, a lot of e-mail contact. That’s a model. I

think just the commentary may not be sufficient. This is a partnership. The universities, through the Federal demonstration project,

NCURA, AAU, other organizations, are willing to pull together and

work in a unified way. We need to have a partnership if the systems are going to work.

We do understand the complexity of massive data transmission.

We recognize the efforts that are being made, and we want to be

partners in ensuring that we are efficient and make sure our resources get devoted to the needs of our citizens and not to administration.

Thank you.

Mr. PUTNAM. Thank you very much.

[The prepared statement of Mr. Parnes follows:]

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Mr. PUTNAM. At this time I would like to recognize Ms. Crosby.

Ms. Crosby is Director of Workforce Development for Goodwill Industries International where she has been managing Department

of Commerce technology opportunity grants and $20 million of welfare to work grants. Prior to this role, Ms. Crosby spent 19 years

at Goodwill Industries for the greater Detroit area where she managed some $8.3 million in grants involving 120 employees at 11

sites.

We welcome you to the subcommittee, and you are recognized for

your testimony.

Ms. CROSBY. Thank you very much. I really appreciate the opportunity to speak on behalf of nonprofits to an issue that’s so important to us and that is maintaining funding to meet the needs of the

communities where we reside.

Goodwill Industries International, where I work, supports 176

local Goodwills in the United States that serve 98 percent of all the

counties in the United States. One of the interesting things about

my role as Director of Workforce Development is that I represent

the mission and, therefore, am always looking for funding opportunities for grants at the Federal level that we can use to support

the mission at the local level and reach out to put people back to

work.

I have heard so much today that rings true with what Goodwill

is concerned about: the issue of common application process, the

need for training; the need to have a voice in developing a system

that not only meets the administrative needs of the government

but the end user needs, I share many of the same concerns with

the panel that’s here.

But I would like to use my time to address three things that I

think are particularly challenging for nonprofits of all sizes, whether the larger nonprofits in some of our bigger cities or whether our

small rural nonprofits taking the $30,000 grants that Mr. Sontag

referenced. They are important issues for all of us to address.

The first issue for us is the idea of common definitions in grant

proposals and the department vernaculars that creep into the process. I was taken by just hearing the term ‘‘one-stop’’ used in relation to E-Grants here. One-stop in the employment and training

world already has a capital letter connotation. We’re now going to

create a one-stop E-Grant center. It will make the search engine

real interesting, just finding one stop on the dot-gov Web site, because we’re creating yet another vernacular and another use of a

very familiar term.

From our point of view, searching and mining for Federal funds

to extend the effectiveness of our mission is increasingly challenging. We can create these sites, but without the notices that were

referenced earlier or another way to identify funding related to

mission-specific work having links to various agencies is not going

to be incredibly beneficial.

I certainly am here, too, to advocate on behalf of that idea of a

common standard for proposals, the time lines, not 2 weeks to 6

months but something that is reasonable and that we know we can

count on for the application process, the format, so that there are

standard elements truly in the application process.

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And scoring. Every RFP that is issued has a different weight,

methodology, thinking behind the scoring and how that proposal

will be judged. Only experience from writing, winning and failing

proposals teaches the grant personnel how to accurately read the

combination of implied expectation, regulatory compliance and

funding authorization requirements contained in every published

grant announcement. The style and process can vary drastically,

and it requires that one knows as much as possible about the authoring source in the agency. Deciding to respond to an RFP creates a daunting collection of challenges.

I also think that it is important to categorize grant opportunities

by common services and populations in need rather than by the

originating agency. Organizations that look for funding attempt to

leverage that funding across the source agencies, and being able to

identify all of the funding related to a prospective mission is important. I noted in the GAO testimony that they had referenced that

very topic, and in fact that there were 44 different grants available.

It said 44 programs administered by nine different Federal agencies to provide employment and training services. That would be

exactly the type of challenge that we’re trying to overcome when

we’re mining for grants and looking for opportunities to meet local

needs.

I thank all of you for the chance to be here today. I welcome any

questions about nonprofits that I might be able to address and

hope that Goodwill can be part of this ongoing discussion.

Mr. PUTNAM. Thank you, Ms. Crosby.

[The prepared statement of Ms. Crosby follows:]

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Mr. PUTNAM. The committee notes for the record the arrival of

the gentlelady from California, Ms. Watson. Without objection, the

record is certainly open for your written testimony, but if you

would like to be recognized for a few opening remarks, we will also

do that at this time if you so desire.

Ms. WATSON. I had been asked by Lacy Clay to deliver his opening remarks. I understand he is on his way, so I’ll defer to him.

Thank you so very much, Mr. Chair.

Mr. PUTNAM. Yes, ma’am. We are delighted to have you.

I will look to the gentlelady on my left, Mrs. Miller of Michigan,

to open with her round of questions for 5 minutes.

Mrs. MILLER OF MICHIGAN. I will start with Karen Miller. That’s

a great last name.

I was actually a former county treasurer, along with some of the

other jobs I had. After I was county treasurer, then I was a Secretary of State.

I was particularly interested to hear you talk about what is happened with the HAVP, the Help America Vote Plan, in Missouri

where they are loaning the money with interest. That was not the

intention of the Federal Government for that matter. I don’t know

if I’m asking you a question, but I picked up on you talking about

that. We’re going to get, I think, $50 million in Michigan. I’m not

sure what you’re getting in Missouri.

Ms. MILLER. I don’t know what we’re getting in Missouri either,

but when I left home yesterday my county clerk came to me and

said, I know you’re going to D.C., can you stop by the Senate offices

and legislator’s office?

Here’s what’s going on. The State has decided they want to loan

the counties money for equipment with interest instead of doing

any grants. They will keep all the funds themselves. I know that

was not the intention because we were very active in that, in getting that funding so that local governments could change out that

equipment so that we could have consistent elections across the

country. So I don’t know where to go from there, but I wanted you

to understand that when you give grants to the States without

some requirement that so much of it goes to the locals as you intended when you passed the legislation, that can happen.

Mrs. MILLER OF MICHIGAN. One of the things we’re doing in

Michigan is our now Secretary of State has put together an advisory committee which is inclusive of most of the county clerks actually in Michigan. Because the county clerks were very instrumental

throughout the Nation in getting that legislation passed. I’ll be interested to see how you do there. Could you expand a little bit? You

talked about the pilot program through NACo that you’re contemplating with your rural action caucus; and most of the States,

of course, have similar experiences with a lot of rural areas. As you

mentioned, they don’t have the money to have staff on hand to do

the grants and to do the grant mining and these kinds of things.

What is the intention of NACo to do this rural action caucus?

Ms. MILLER. We talked to Mr. Havekost, and one of the things

he is real interested in is he wants to know if you apply for a grant

in the hard copy, written way and you apply for a grant on-line,

how they track. I mean, does it move along quicker when it is online or is it slower? So he has asked us to identify some counties

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that would be willing to apply both ways. That’s one way. And to

also let them know then the problems they had in applying on-line

versus what they are used to as far as the hard copy. So that is

the kind of pilot that we were looking at doing, was helping get information more for the process than anything.

Mrs. MILLER OF MICHIGAN. I think that’s an interesting concept.

That has been sort of a constant theme through this testimony this

morning, that big is not always better sometimes. In some of the

smaller grant processes in the rural communities and that, we do

have to be ever vigilant to make sure that they are able to access.

They are taxpayers like anybody else, wherever they live in America, and that they should be able to access these kinds of things.

Hopefully, we can use the technology properly to allow them to access it that way.

Ms. MILLER. I think if it is customizable where you can identify

what you’re looking for, searchable, that it will eliminate a lot of

the time that it takes to, as Ms. Crosby identified, that’s so overwhelming just finding where the possibilities are. I think that

would help rural counties across America as much as anything, if

they’re able to have one data base to go to, put in their search,

what they’re looking for and identify where the funds are available.

Mrs. MILLER OF MICHIGAN. Then I would question the University

of Michigan’s perspective and I think for all the universities perhaps as we talk about some of the people who are not so cognizant

of the grants that are available and don’t have grant writers on

staff.

The University of Michigan, of course, has to have some of the

best expertise in the Nation on accessing your kinds of grants. You

mentioned earlier about the training, perhaps lack of training that

you sometimes get. I guess I’m going to ask you to expand on that,

help materials that are available to your staff? You don’t want to

use, as you mentioned, the research individuals to be filling out all

the administrative kinds of things. What has been the experience

of the University with asking the Federal Government for assistance, and then what has been your experience with the different

agencies in responding to your needs to assist you?

Mr. PARNES. I think there is a lot of variability in how well the

agencies tune in to what the user needs are. I’m sure it is related

to their mission. NSF, for example, is so tied to universities, their

fast lane system is very well designed to meet their needs. They

got a green light on their administrative procedure. They have an

understanding of the training we need to do for staff.

Some of the other systems, DOE is using basically an industry

contract system and applying it to a university setting.

You really have a lot of difficulties getting people to learn new

terminology approaches. Sometimes the materials developed to provide training are limited. It’s a lot of labor to bring everyone to the

point where they can successfully launch and submit these applications. So there is a wide range.

Part of it is that there has been a proliferation of systems. So

we’re in a situation now where we may have a dozen different systems that we have to learn to use. There is a limited amount of

capacity for people to keep relearning those. We are concerned as

this goes forward that whatever is developed tries to eliminate that

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redundancy so we can concentrate on training those people who

need to be expert in those areas.

Mrs. MILLER OF MICHIGAN. Perhaps just an open-ended question

to the panel here. In fact, we were talking during the break, one

of the things that I found in my constituency there, just as an example, Community Development Block Grant funds, because of the

census tracking requirement that the Federal Government has—

and we’re not particularly an affluent area—but most of my townships cannot use the money—and these are explosive growth areas.

They can’t use it for roads or sidewalks. All they can use it for now

is senior citizens projects. Of course, those are good projects, but

I think there should be some more flexibility on some of these

grants to allow you to really utilize the money as you need.

We’re all interested, of course, in waste, fraud and abuse and

performance evaluations on how the Federal granting process is

working. Could any of you give me a little feedback on your experience on how the Federal agencies benchmark your utilization of the

Federal grants? Do you have any specific area of concern that we

should be looking at as well and how perhaps the E-Granting process may accommodate some more efficiencies in that area?

Ms. MILLER. Just as I was walking in here today, the staff was

telling me in Senator Baucus’ State there are three counties that

can get Community Development Block Grants. It leaves the rest

of the State not eligible. That’s what we find.

In my county, we’re not eligible for the most part for Community

Development Block Grants. So it really limits where those funds

are being serviced.

I would be opposed to having that as the only criteria, as having

Community Development Block Grants. I think there are other

ways to do funding formulas that can be equitable and get the

funds down to the areas that really need them.

Ms. CROSBY. When there are uniform outcome measurements associated with the authorization of funds, I think it helps us all to

know what the expectation is at the Federal level. Certainly recently there were employment and training outcomes outlined that

crosscut many of the agencies and make it clear that the intent of

that funding authorization goes to job placement, job retention, improved earning capability, regardless of who the authorizing agency

is on the funds. There is flexibility inherent in knowing that the

ultimate outcome is to achieve those goals.

I think that the E-Grants initiative, taken to its continuing

phases, has the opportunity to do that uniform type of data gathering that will allow us all to focus on what the intent of the authorization of dollars was versus meeting all of the little nuances and

compliance detractors along the way that have us measuring instead, did we serve 13 percent of XYZ with only 18 percent of dollars instead of did you put more people to work? Did you find more

people able to take independent care of their lives? Did you improve the economic situation of your community? If those are the

intent of the dollars, then common measurables will be really, really empowering.

Mr. PARNES. I think universities are very adapted to being accountable to agencies for fulfilling obligations of grants. I think the

efficiency here is in the administrative reporting and postaward

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process and auditing. In other words, the more concurrence, the

more similarity.

Again, we’re all saving dollars that should be better spent on

substantive needs rather than a lot of different systems that all

have at the heart the same business process and the same accountability necessities. So it’s more the uniformity, and we’re very willing to be accountable. We just want it to be an efficient process.

Mrs. MILLER OF MICHIGAN. Thank you, Mr. Chairman.

Mr. PUTNAM. Thank you, Mrs. Miller.

Ms. Watson, you’re recognized.

Ms. WATSON. Yes. In listening to the current presenters and

reading over some of your statements, I have some concerns. Mrs.

Miller and Mr. Parnes, first, NACo. Do they provide you with

grantsmanship? It is an art. I have sent my staff in the past to the

University of Southern California to take grantmanship so that we

could help community-based associations write those grants. I have

a concern as to what kind of help, and is there a format?

I was very concerned and interested in what Dr. Parnes was saying, because at the university level I know that poorer universities

have less speedy Internet equipment and so on, and to do the Eapplications might present a problem. I do know trying to put the

high and the new technology in our State-funded universities and

colleges has been a real challenge for the State of California and

so I want to know what impact that will have if we go to these Eapplications, which is maybe a smart way to go. I don’t know.

Also, is there assistance for you through your organizations?

Either one that would like to speak first, fine.

Ms. MILLER. As far as the National Association of Counties, we

have regular nationwide conferences that we do workshops and

trainings on specific issues that have been working through the

Congress. Like when the election reform passed, we had workshops

on that, as to what it meant, what you needed to be looking for,

how it could apply to your county. And so, yes, I think we do that.

We also have a research department that helps counties in identifying how to do things if they don’t know how. I believe that we

have the capacity to do more, probably. We have already said that

we were committed to trying to get our counties to use the EGrants application process because we believe that’s the best way

to go for the future is one stop or one place to find the grants for

sure, as long as they are not required to be fill-in-the-blank, on-line

all the time because that would really hurt rural America. We

couldn’t do that. I agree with your point there, Congresswoman.

Mr. PARNES. I think that’s an excellent point, that there needs

to be default systems that allow institutions with different levels

of resources or technology to still participate actively in the process. I would certainly support that.

Universities have many resources available to do some of the

searching and grant writing, although there is a lot of variability.

National professional associations like the National Council of University Administrators or Society of Research Administrators have

a lot of training programs and do a lot of inter-university sharing

on approaches to effective and efficient grants acquisition, but

there is no doubt that there are haves and have-nots in terms of

the capacity to go after those funds.

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Ms. WATSON. Thank you.

Ms. Crosby, you are at Goodwill Industries. You have been over

the centuries, I should say, very successful with this. Can you give

us some idea how you have achieved that level of success? We in

our communities depend on Goodwill Industries to fill in where we

cannot as government. So can you tell us how you do it and how

you have done it throughout history?

Ms. CROSBY. I think that Goodwill does bring a couple of very

unique things to the table when it comes to the grant management

topic. One is that we are a business. Our roots are in the retail

business. We have income from those stores where we train people

and learn about customer service. But what it gives our organization as a nonprofit is a true appreciation that we are a business

and we will operate in a business fashion. That isn’t to say that

other nonprofits don’t, but it makes it perhaps a little easier to

build the systems that are relied upon to manage other types of

businesses like grants.

The second thing is we have a strong national organization. I

was very interested in your comment that grant management is an

art. I have spent over 20 years learning this. I have taken a lot of

teasing beacause I’m one of those people who actually likes reading

OMB circulars.

Ms. WATSON. A rare breed.

Ms. CROSBY. I’m telling you. Then to go and earn a certificate in

grant management. I go back every year for a refresher course. I

belong to two professional associations. It takes all of that to stay

abreast of the art of grant management. But what it does for our

members is give them a national office to go to where we have always housed that expertise and maintained a training and an outreach for them so that they have resources to learn the art themselves. I think it helps us be successful.

Ms. WATSON. It is intriguing to hear you say you’re a business

and in the business of. Being in the business of gives you, I think,

an extra dimension; and maybe that is what we ought to kind of

try to get our other organizations to look at, the business end of

it.

Paperwork. That has been a huge stumbling block in all sectors.

It would be interesting—and this is to the committee—if we could

have you from your end suggest to us how the paperwork could be

reduced. Maybe this E-application and response might be the way

to go.

But I am concerned about the capability and capacity in other

counties, in universities, colleges. I’m an educator. That comes out

time and time again. Educators complain about the paperwork

when they go after these grants. There are so many varieties and

so many contingencies that they have to consider. It just becomes

a lot of work.

It would be interesting to me if you could suggest to us how to

get to what you need to know and to respond to with less paperwork and less writing. Can we use a checkoff? A check box system

with a few comments?

I just throw that out. I’m thinking as I’m talking. How can we

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quire less time of those of you that are responding and kind of

guarantee greater success? I just throw that out.

Ms. MILLER. Congresswoman, I would say that if the format was

the same for every kind of grant you applied for and the requirements as far as the financial requirements of the entity that’s applying and stuff, the information could stay consistent, then your

grant writers within your community or within your organization

wouldn’t have to continually redo that and it would be a standard

format where they would just change then the focus on that particular grant and could leave the rest of it as the template that

they would always use. I think that would help everyone across the

country.

Ms. CROSBY. It’s so amazing that today one of the first places to

start in my mind as we dissect the request for proposal is, can it

be stapled? Can it be bound? Will it have to be in a plastic spline

or how are we going to have to get it there? Will it be 7 copies,

10, 15 or 2? Is it 40 pages? Is it 75? Do those pages include the

resumes and bios or do they exclude the resumes and bios? The

uniformity of just presentation alone could take us a big step. I

think E-Grants has that potential.

Mr. PARNES. I would endorse my colleagues here. Even though

we give up our competitive advantage in Michigan because knowing how to do all this really does help, we would sacrifice that competitive advantage for simplicity.

Ms. WATSON. I just want to comment on what Ms. Crosby said.

I was writing my dissertation, and it has to be specific to even the

borders. It drives you crazy. There are only certain people who

even type those things up.

As Dr. Parnes said, some of you can’t even compete because you

have to be so specific. I have always wondered, does government

really need to do this and all of our different agencies and departments and all? So I think you could help us by kind of responding

to this inquiry, by writing us some of your thoughts on how we

could streamline it. And maybe the E system is the answer. But

I’m concerned about the capacity, too. We don’t have any perfect

resolutions to these problems, but you could certainly help us as we

deliberate.

Thank you very much.

Mr. PUTNAM. Thank you, Ms. Watson.

I want to share some of those same thoughts. I am glad that

OMB is still here to listen to a number of these issues.

Mr. Parnes, you mentioned rogue systems. They are still being

developed even as, and I presume now, even as OMB is attempting

to get their hands around a common E-Grant system, even as the

law mandates that we move toward a standardization, that there

are still agencies out there developing their own specific stovepipe.

Is that correct?

Mr. PARNES. I don’t know if I have exact information on the start

dates for all those systems. Because I think there are legacy systems and, as was commented in the first panel, some agencies to

their credit may have gone out front in developing systems at a

time where they thought that would be helpful. I’m not sure how

much development is going on now, although I think there is still

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some. I would need to verify if there are new initiatives currently

under way or if these are just continuations of those systems.

I think there was a comment about culture when you asked the

question earlier. I think it gets to the heart of this. And we have

issues at the universities as well. How do you meld a lot of different cultures, each of whom believe their system is serving the

needs of their agency?

I think that to me is the most critical element here, is having

enough strength and will to actually bring those systems into alignment. We know there is going to be an interim period where some

of these older systems are going to run, but we really want to see

real significant progress toward reducing those numbers and making sure there aren’t new ones introduced. I don’t have exact dates

on whether those have been initiated within this short time period.

Mr. PUTNAM. Conversely, is it realistic to expect that there would

be a universal application that would be specific and appropriate

to the needs of NIH, work force development and local law enforcement grants? Is that really what we want to shoot for?

Ms. MILLER. I believe there could be. That there could be the

template that is the standardization and then a specific section

that identifies the specific agency you’re working with. But, for the

most part, all the information should be standard. As Ms. Crosby

said, the same amount of copies, the same way it is submitted. All

that standardization is going to help everybody. It’s required on

every grant. It’s just required in different formats. So if it could be

all put in the same format, I believe it would be beneficial.

Mr. PUTNAM. You mentioned, Commissioner Miller, about the

need for some universal approach to it. Mr. Parnes did as well; and

you did as well, Ms. Crosby. So everybody agrees that there ought

to be common definitions, common standards. But you also made

reference to the success of the University of Michigan and that

some people have grant writers on staff and some don’t. Have we

reached a point where we’re not necessarily rewarding the most innovative programs or the most efficient programs but we’re rewarding the folks who have mastered the nuance of the grant language?

Ms. MILLER. I think that easily is what happens. I believe that

the needs are as great in those counties that don’t have the grant

writers or whatever. They just don’t know where to go to even try

to apply for a grant. Once they find that there is grant money

available, it scares them to death looking at the proposal and trying to figure out how to do it.

I just had a fire district working on homeland security grants.

It’s a volunteer fire department. I sent them to the regional planning commission because at least there they know how to do that.

They can guide them. I believe that you’re right, if you have money

and you can afford to hire these people, you have a better shot at

getting more money. So those that don’t have money that probably

need it worse are the ones that are being left out; and that is rural

America, from my perspective.

Mr. PUTNAM. Mr. Parnes, you advocated OMB putting muscle behind the common standard. How do you sanction or disincent rogue

systems or failure to comply? How do you do that without punishing the people at the end?

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You said OMB should put muscle behind the common standard.

What about those agencies who don’t comply? What do you do

about that?

Mr. PARNES. I don’t know if I have an answer to that in terms

of what pressure could be brought to bear, so I really am not sure

I’m kind of capable of speaking to that point in particular.

We do believe, in reference to the last question, in peer review

in terms of substantive content of grants. In that respect, we recognize a lot of difference. But it is the administrative shell, the common business elements where I think pressure should be brought

on those agencies.

I do recognize the dilemma, is that there are limited means to

do that. One is funding. We don’t want to impact the grant recipients down the line by reducing funding in areas of need because

the administrative compliance with this act isn’t present, but I

don’t know what other tools are available other than looking at the

funding for the administrative component perhaps separately from

the substantive granting component in some of these agencies.

The question asked earlier of what is the cost of grants management and is there some way of looking at how much is being expended on unique systems that might better be used in developing

some of these common systems would be an approach.

Mr. PUTNAM. You have $500 million a year in Federal money.

Are the obstacles to getting that money appropriate for $500 million, and is the oversight of that $500 million throughout the life

of that grant appropriate?

Mr. PARNES. I think there is a lot of appropriate oversight of the

funds universities receive. I think many of the agencies are very

active and have developed mechanisms for really tracking how

those funds are being used and, as I said, holding us accountable.

I think there are probably administrative efficiencies in how that

is done that would save both the agencies and the Federal Government as well as universities time and money. A lot of this goes

back again to having simpler, single systems. I think the act envisions that. I support the act and the effort to implement it.

In terms of obstacles to getting those funds, it’s hard for me to

understand the question entirely. Obviously, the obstacles are

worth overcoming. Whether we want to put our energy into overcoming obstacles instead of doing better and more research that

can be put to use for public good, I think it is ensuring that is

where our effort goes, is into research, training, public service and

not into kind of administrative hurdles that are more than necessary for purposes of equitability and accountability.

Mr. PUTNAM. You’re satisfied with the amount of oversight,

though, on the back end?

Mr. PARNES. Yes.

Mr. PUTNAM. We have representatives from for-profit, not-forprofit, public, private here. In your viewpoint, are grants appropriately distributed among public, private, for-profit, not-for-profit,

faith-based? Do we have an even distribution, an appropriately

even distribution? What are your thoughts if there are differences

on who best manages or best handles those human-services-type

Federal grants?

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Ms. Crosby mentioned the business approach. They are particularly good at getting these things because they have an ability,

they have a history, they have a tradition of being able to draw

down those grants. What are your thoughts on the balance there

between the larger organizations and the smaller or more rural

groups and the different attitudes they bring to the table based on

either faith-based, profit, nonprofit, public, private?

Ms. KAREN MILLER. All I have is the experience of my own county, but I know that as a local elected official, we don’t have enough

money in our budget to be able to meet that need, and it takes the

combination of the churches, the not-for-profits, the Salvation Armies, the whole works to be able to serve the needs of the most

needy in our community through those human service grants.

So, I mean, I believe that from my perspective it’s working fairly

well. I mean, we’re all getting a piece of it, and we’re meeting the

need by partnering. I believe that any time we can encourage partnerships with the local governments and the not-for-profits, it’s encouraging. I wish grants would require, or give preference to those

that partner with other agencies to better do a job instead of compete against each other, as cities and counties do all the time.

If the legislation was written in such a way to incentivize partnerships, I think we would serve our citizens much better than we

do today.

Mr. PUTNAM. Ms. Crosby.

Ms. CROSBY. I think that there are probably a couple of interesting things in what you said. Who is the best might not be the point

system I’d want to enter into. Nonprofits generally operate on a

human services mission that does not include infrastructure building that we would expect our municipalities to address, nor the

academic research and intense training levels of the university. In

other words, we each have our niche.

Having said that, you’re looking at three different OMB circulars

that we operate under, too, and those cost principles mean, every

time you want to enter into a collaboration, somebody is going to

have to be very savvy and love to read all three of them, because

in taking the fiscal responsibility for that collaboration and sharing

the responsibility, there’s going to be three different sets of rules

to match.

So if we’re going to gain at the local level, small communities as

well as large, some efficiency, it probably is another important

piece to address in improving the grant system that there’s a greater uniformity in those systems.

Mr. PUTNAM. Very good.

Ms. Watson, any final comments?

Ms. WATSON. Mr. Chairman, apparently Representative Clay has

been delayed further, and he would like to have his statement be

included in the record.

Mr. PUTNAM. Certainly. Without objection, we will enter that in

the appropriate place in the record.

[The prepared statement of Hon. Wm. Lacy Clay follows:]

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Mr. PUTNAM. And we thank you for being here, and we thank

Mrs. Miller, and we thank our panelists as well as our first panel.

Obviously, we have much work to do in terms of grants management. We will continue to monitor the progress of OMB in bringing

forward an effective E-Grants approach and a simplified and

streamlined approach that is successful for both the grantees and

the citizens who benefit from the funds that are expended on their

behalf.

So, with that, the hearing stands adjourned.

[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]

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