GRANTS 

MANAGEMENT

Improved Planning, 

Coordination, and 

Communication 

Needed to Strengthen 

Reform Efforts

Report to Congressional Requesters

May 2013

GAO-13-383

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-13-383, a report to 

congressional requesters

May 2013

GRANTS MANAGEMENT

Improved Planning, Coordination, and 

Communication Needed to Strengthen Reform 

Efforts

Why GAO Did This Study

GAO has previously identified several 

management challenges that have 

hindered grants management reform 

efforts. GAO was asked to review 

recent federal grants management 

reform efforts. GAO reviewed (1) what 

OMB and other federal grants 

governance bodies have done since 

the passage of P.L. 106-107 to reform 

grants management processes, and 

(2) what actions, if any, have been 

taken to address what GAO has found 

to be persistent management 

challenges. GAO reviewed relevant 

legislation, OMB circulars and 

guidance, action plans of interagency 

councils responsible for overseeing 

grants management reforms, and 

previous GAO work and other literature 

on grants management reforms. GAO 

also reviewed its previous work on 

collaborative mechanisms and 

management consolidation efforts. 

GAO also interviewed officials from 

OMB, grant-making agencies, and 

associations representing a variety of 

grantee types.

What GAO Recommends

GAO recommends that the Director of 

OMB: (1) develop and make publicly 

available an implementation schedule 

that includes performance targets, goal 

leaders who can be held accountable 

for each goal, and mechanisms to 

monitor, evaluate, and report on 

results; (2) clarify the roles and 

responsibilities for various streamlining 

initiatives; and (3) develop an effective 

two-way communication strategy with 

relevant stakeholders. OMB generally 

concurred with our recommendations 

and provided additional and updated 

information, which was incorporated 

into the report as appropriate.

What GAO Found 

In the past 14 years, since the passage of the Federal Financial Assistance 

Management Improvement Act of 1999 (P.L. 106-107), there has been a series 

of legislative- and executive-sponsored initiatives aimed at reforming aspects of 

the grants management life cycle. Recently, a new grants reform governance 

body, the Council on Financial Assistance Reform (COFAR), replaced two former 

federal boards—the Grants Policy Committee (GPC) and Grants Executive 

Board (GEB). The Office of Management and Budget (OMB) created COFAR 

and charged it with identifying emerging issues, challenges, and opportunities in 

grants management and policy and providing recommendations to OMB on 

policies and actions to improve grants administration. 

In addition to this new governance structure, OMB and other entities involved 

with federal grants management are overseeing several ongoing reform 

initiatives intended to address the challenges grantees encounter throughout the 

grants life cycle. These initiatives include consolidating and revising grants 

management circulars, simplifying the pre-award phase, promoting shared 

information technology (IT) solutions such as the development of shared end-toend grants management systems, and improving the timeliness of grant close out 

and reducing undisbursed balances. Management and coordination challenges 

could hinder the progress of some of these initiatives. For example, although 

promoting shared IT solutions for grants management—an original goal of P.L. 

106-107—remains a priority, there has been uncertainty regarding the status of 

this initiative and future plans for it. The lead agency for this initiative changed 

several times since 2012, and it has been unclear at times whether promoting 

shared IT systems for grants management would continue to be a priority, and if 

so, which agency was in charge. After receiving GAO’s draft report for review, 

OMB issued a “Controller Alert” on April 29, 2013, announcing that the 

Department of the Treasury would lead efforts to transform federal financial 

management by, among other things, relying on common standards, shared 

services, and using state-of-the-art technology.

Although COFAR has recently identified several high-level priority goals for 2013 

through 2015, it faces some of the same management challenges identified in 

previous GAO reports on grants management, such as the lack of a 

comprehensive plan for implementing reforms, confusion over roles and 

responsibilities among grants governance bodies, and inconsistent 

communication and outreach to the grantee community. COFAR has not yet 

released to the public an implementation plan that includes key elements such as 

performance targets and goal leaders for each goal, and mechanisms to monitor, 

evaluate, and report on progress made toward stated goals. Furthermore, 

agencies involved with current grants management reforms are not always clear 

on their roles and responsibilities for various streamlining initiatives which may 

cause such initiatives to languish. Finally, GAO found that members of the grant 

recipient community continue to voice concern because they do not see a role for 

themselves as OMB and COFAR develop priorities for reforming federal grants 

management. In the comments it provided on April 29, 2013, OMB described 

actions it is taking to address these challenges, such as using a more detailed 

project plan internally and scheduling outreach events with federal partners and 

members of the grantee community.

View GAO-13-383. For more information, 

contact Stanley J. Czerwinski at (202) 512-

6806 or czerwinskis@gao.gov.
Page i GAO-13-383 Grants Management

Letter 1 

Background 4

Process Initiatives Helped Reform Aspects of the Grants 

Management Life Cycle, but Management and Coordination 

Challenges Could Hinder Further Progress 8

OMB and the Council on Financial Assistance Reform Face 

Persistent Challenges in Reforming Federal Grants Management 13

Conclusions 20

Recommendations for Executive Action 21

Agency Comments and Our Evaluation 21

Appendix I Scope and Methodology 23

Appendix II Table of Selected Grants Management Reforms 26

Appendix III Grants Management Line of Business Consortia Leads and 

Customers as of January 2013 28

Appendix IV Comments from the Office of Management and Budget 30

Appendix V GAO Contact and Staff Acknowledgments 35

Figures

Figure 1: Grant Life Cycle for Federal Grant-Making Agencies and 

Grant Recipients 5

Figure 2: Timeline of Selected Grants Management Reforms 7

Contents 
Page ii GAO-13-383 Grants Management

Abbreviations

ACF Administration for Children and Families

COFAR Council on Financial Assistance Reform

FIT Department of the Treasury’s Office of Financial 

 Innovation and Transformation 

FDP Federal Demonstration Partnership 

FFATA Federal Funding Accountability and Transparency 

 Act of 2006

FMLOB Financial Management Line of Business

GATB Government Accountability and Transparency

 Board

GEB Grants Executive Board

GMLOB Grants Management Line of Business 

GPC Grants Policy Committee

GSA General Services Administration

HHS Health and Human Services 

IT Information Technology

OMB Office of Management and Budget

NSF National Science Foundation

PMO Program Management Office

PMS Payment Management System

Recovery Board Recovery Accountability and Transparency Board

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-13-383 Grants Management

441 G St. N.W.

Washington, DC 20548

May 23, 2013

The Honorable Thomas R. Carper

Chairman

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Tom Coburn, M.D.

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Claire McCaskill

Chairman

Subcommittee on Financial and Contracting Oversight

Committee on Homeland Security and Governmental Affairs

United States Senate

Grants play a significant role in implementing and funding federal 

programs including medical services, nutrition programs, and housing 

assistance for the sick and economically disadvantaged; financial aid for 

more than 14 million postsecondary students; and funding and 

maintenance of our nation’s highways, bridges, and mass transit system.1

Federal outlays for grants to state and local governments steadily 

increased from $91 billion in fiscal year 1980 (about $221 billion in 2011 

constant dollars) to approximately $545 billion in fiscal year 2012.2 Over 

time, growth in the numbers of grant programs to state and local 

governments and their level of funding has contributed to greater diversity 

and complexity in the federal grants management processes. Multiple 

reporting systems and data requirements associated with administering 

these federal grants have increased the burden and cost of grants 

management for agencies and grantees.

 

1

For more information on the scale and scope of federal grant-making activities, see GAO, 

Grants to State and Local Governments: An Overview of Federal Funding Levels and 

Selected Challenges, GAO-12-1016 (Washington, D.C.: Sept. 25, 2012). 

2

Constant dollar amounts reflect adjustments for inflation (e.g., the purchasing power of 

the $91 billion spent in 1980 represents about $221 billion in fiscal year 2011 dollars). 

 
 

Page 2 GAO-13-383 Grants Management

Efforts to streamline federal grants management have been under way for 

well over a decade. Concerned that aspects of the grants management 

process lacked coordination among agencies and consistency with 

application and reporting requirements, Congress passed the Federal 

Financial Assistance Management Improvement Act of 1999, commonly 

referred to by the grants community as P.L. 106-107.3 Since the 

enactment of P.L. 106-107, the federal government has taken a number 

of additional steps to reform government-wide grants management to 

achieve greater efficiency and transparency. While P.L. 106-107 

sunsetted in 2007, a number of reform initiatives continue, and new 

initiatives have been put into place. Our previous work described many of 

these initiatives and the related challenges—the lack of a comprehensive 

plan for implementing reforms, confusion over roles and responsibilities 

among grants governance bodies, and inconsistent communication and 

outreach to the grantee community—that have undermined the 

government’s ability to simplify grants management processes, reduce 

unnecessary burden on applicants, grantees, and federal agencies, and 

improve delivery of services to the public.4

You asked us to examine federal grants management reform efforts. To 

accomplish this, we reviewed (1) what the Office of Management and 

Budget (OMB) and other federal grants governance bodies have done 

since the passage of P.L. 106-107 in 1999 to reform grants management 

processes and reduce unnecessary burdens on applicants, grantees, and 

 

3

As defined in the act, “federal financial assistance” includes grants, cooperative 

agreements, loans, loan guarantees, insurance, interest subsidies, and other forms of 

assistance. Pub. L. No. 106-107, §4,113 Stat. 1486 (Nov. 20, 1999), citing 31 U.S.C. 

7501(a)(5). The current streamlining efforts have focused on grants and cooperative 

agreements. In our evaluation we have also limited our assessment to grants and 

cooperative agreements and, for simplicity, refer to them as grants.

4

See GAO, Grants Management: Improving the Timeliness of Grant Closeouts by Federal 

Agencies and Other Grants Management Challenges, GAO-12-704T (Washington, D.C.: 

July 25, 2012); Grants Management: Action Needed to Improve the Timeliness of Grant 

Closeouts by Federal Agencies, GAO-12-360 (Washington, D.C.: Apr. 16, 2012); 

Grants.gov: Action Needed to Address Persistent Governance and Funding Challenges, 

GAO-11-478 (Washington, D.C.: May 6, 2011); Grants Management: Grants.gov Has 

Systemic Weaknesses That Require Attention, GAO-09-589 (Washington, D.C.: July 15, 

2009); Grants Management: Grantees Concerns with Efforts to Streamline and Simplify 

Processes, GAO-06-566 (Washington, D.C.: July 28, 2006); Grants Management: 

Additional Actions Needed to Streamline and Simplify Processes, GAO-05-335

(Washington, D.C.: Apr. 18, 2005); and GAO-12-1016. 
 

Page 3 GAO-13-383 Grants Management

federal agencies; and (2) what actions, if any, have been taken to 

address what we have found to be persistent management challenges.

To address these objectives, we reviewed P.L. 106-107, relevant OMB 

circulars and guidance, and action plans created by former and current 

interagency councils with responsibility for overseeing grants 

management reforms.5 We interviewed officials from the Office of 

Management and Budget (OMB) who are involved with developing and 

implementing government-wide grants management policy; officials at the 

three agencies that served as consortia leads for the 2004 to 2012 Grants 

Management Line of Business (GMLOB) e-government initiative: the 

National Science Foundation (NSF), Department of Health and Human 

Services (HHS), and the Department of Education(Education); and 

officials at the General Services Administration (GSA), the agency that 

managed the Financial Management Line of Business (FMLOB) egovernment initiative in 2012. To capture the perspective of grantor 

agencies, we spoke to officials from HHS, NSF, and Education in their 

grant-making and administration capacities. To understand grantee 

perspectives, we interviewed officials from grantee associations that 

represent a variety of grantee types including state and local 

governments, nonprofit organizations, and universities.6 Finally, we 

reviewed our previous work on grants management initiatives and the 

related challenges that have undermined the government’s ability to 

simplify grants management processes, reduce unnecessary burden on 

applicants, grantees, and federal agencies, and improve delivery of 

services to the public. We also reviewed our previous work on 

collaborative mechanisms and management consolidation efforts. For 

more information on objectives, scope and methodology, see appendix I.

 

5

OMB-12-01, “Creation of the Council on Financial Assistance Reform”, OMB A-102, 

“Grants and Cooperative Agreements With State and Local Governments”, and A-110, 

“Uniform Administrative Requirements for Grants and Other Agreements with Institutions 

of Higher Education, Hospitals and Other Non-Profit Organizations”, which describe 

administrative requirements for different types of grantees, and OMB’s February 12 

Advance Notice of Proposed Guidance, which proposes several ideas for circular reforms 

(77 Fed. Reg. 11,778). 

6

For this review, we interviewed and collected comments from officials at the following 

organizations: National Association of State Auditors, Comptrollers, and Treasurers, 

National Association of State Budget Officers, National Association of Regional Councils , 

National Association of Counties , National Grants Management Association , National 

Grants Partnership , Federal Demonstration Partnership , National Council of Nonprofits, 

National Association of Chief Information Officers , and Federal Funds Information for 

States .
 

Page 4 GAO-13-383 Grants Management

We conducted this performance audit from July 2012 to May 2013 in 

accordance with generally accepted government auditing standards. 

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

While there is substantial variation among grant types, competitively 

awarded federal grants generally follow a life cycle comprising various 

stages—pre-award (announcement and application), award, 

implementation, and closeout—as seen in figure 1. Once a grant program 

is established through legislation, which may specify particular objectives, 

eligibility, and other requirements, a grant-making agency may impose 

additional requirements on recipients. For competitive grant programs, 

the public is notified of the grant opportunity through an announcement, 

and potential recipients must submit applications for agency review. In the 

award stage, the agency identifies successful applicants or legislatively 

defined grant recipients and awards funding. The implementation stage 

includes payment processing, agency monitoring, and recipient reporting, 

which may include financial and performance information. The closeout 

phase includes preparation of final reports, financial reconciliation, and 

any required accounting for property. Audits may occur multiple times 

during the life cycle of the grant and after closeout.

Background 

Grant Life Cycle and 

Reporting Requirements
 

Page 5 GAO-13-383 Grants Management

Figure 1: Grant Life Cycle for Federal Grant-Making Agencies and Grant Recipients

Federal agencies do not have inherent authority to enter into grant 

agreements without affirmative legislative authorization. In authorizing 

grant programs, federal laws identify the types of activities that can be 

funded and the purposes to be accomplished through the funding. 

Legislation establishing a grant program frequently will define the 

program objectives and leave the administering agency to fill in the details 

by regulation.
 

Page 6 GAO-13-383 Grants Management

Adding to the complexity of grants management, grant programs are 

typically subject to a wide range of accountability requirements (under 

their authorizing legislation or appropriation) and implementing 

regulations, which are intended to ensure that funding is spent for its 

intended purpose. Congress may also impose increased reporting and 

oversight requirements on grant-making agencies and recipients. In 

addition, grant programs are subject to crosscutting requirements 

applicable to most assistance programs. OMB is responsible for 

developing government-wide policies to ensure that grants are managed 

properly and that grant funds are spent in accordance with applicable 

laws and regulations. For decades, OMB has published guidance in 

various circulars to aid grant-making agencies with such subjects as audit 

and record keeping and the allowability of costs.7

In the past 14 years, since the passage of P.L. 106-107, there has been a 

series of legislative- and executive-sponsored initiatives aimed at 

simplifying aspects of the grants management life cycle; minimizing the 

administrative burden for grantees, particularly those that obtain grants 

from multiple federal agencies; and ensuring accountability by improving 

the transparency of the federal grants life cycle. See figure 2 for more 

information.

 

7

In 1971, OMB published standards for establishing consistency and uniformity in the 

administration of grants and other types of financial assistance to state and local 

governments and certain Indian tribunals. The first circular was A-102, “Uniform 

Administrative Requirements for Grants-In-Aid to State and Local Governments.” In 1976, 

OMB published Circular No. A-110, “Grants and Agreements with Institutions of Higher 

Education, Hospitals and Other Nonprofit Organizations,” 41 Fed. Reg. 32,016 (July 30, 

1976). Other key circulars and guidance include OMB Circulars No. A-21, A-87, A-122 

establishing principles for determining costs applicable to grants, contracts, and other 

agreements with educational institutions, state, local, and tribal governments, and 

nonprofit organizations, and OMB Circular A-133 setting forth standards for obtaining 

consistency and uniformity among federal agencies for the audit of states, local 

governments, and nonprofit organizations expending federal awards.

Federal Grants 

Management Reforms
Figure 2: Timeline of Selected Grants Management Reforms Interactive graphic



Print instructions To print text version of this graphic, go to appendix II.

Source: GAO.

Directions:

Mouseover the following reforms on the following timeline for more information.

Governance initiatives: Intended to make changes that affect policy and oversight

Process initiatives: Intended to simplify aspects of the grants lifecycle

Transparency initatives: Intended to increase the transparency of information detailing federal 

awards and expenditures

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Page 7 GAO-13-383 Grants Management
 

Page 8 GAO-13-383 Grants Management

Since the passage of P.L. 106-107, OMB and other entities involved with 

federal grants management have overseen several ongoing initiatives 

intended to address the challenges grantees encounter throughout the 

grants life cycle. These initiatives include consolidating and revising 

grants management circulars, simplifying the pre-award phase, promoting 

shared IT solutions for grants management, and improving the timeliness 

of grant closeout and reducing undisbursed balances. However, 

management and coordination challenges could hinder the progress of 

some of these initiatives.

As part of the effort to implement P.L. 106-107, OMB began an effort in 

2003 to (1) consolidate its government-wide grants guidance, which was 

located in seven separate OMB circulars and policy documents, into a 

single title in the Code of Federal Regulations, and (2) establish a

centralized location for grant-making agencies to publish their 

government-wide grant regulations.8 The purpose of this effort was to 

make it easier for grantees to find and use the information in the OMB 

circulars and agencies’ grant regulations by creating a central point for all 

grantees to locate all government-wide grants requirements. As of March 

2013, OMB has completed revisions on guidance related to two areas—-

suspension and debarment and drug-free workplace.9 All grant-making 

agencies have relocated their suspension and debarment regulations to 

one title of the Code of Federal Regulations and some have relocated the 

drug-free workplace regulations.

 

8

See Government-wide Guidance for Grants and Agreements; Federal Agency 

Regulations for Grants and Agreements, 69 Fed. Reg. 26,276 (May 11, 2004). 

9

OMB has not completed revisions for any of the OMB grants-related circulars 

(administrative requirements, guidance related to costs, and audit guidance) or the 

guidance on lobbying restrictions. 

Process Initiatives 

Helped Reform 

Aspects of the Grants 

Management Life 

Cycle, but 

Management and 

Coordination 

Challenges Could 

Hinder Further 

Progress 

Increasing Efficiency and 

Effectiveness of Grant 

Programs by Consolidating 

and Revising Guidance in 

Grant Management 

Circulars
 

Page 9 GAO-13-383 Grants Management

OMB has also been consulting with stakeholders to evaluate potential 

reforms in federal grant policies contained in the multiple grant circulars.10

As a first step, in February 2012, OMB published an advanced notice of 

proposed guidance detailing a series of reform ideas that would 

standardize information collection across agencies, adopt a risk-based 

model for single audits (annual audits required of nonfederal entities that 

expend more than $500,000 in federal awards annually), and provide new 

administrative approaches for determining and monitoring the allocation 

of federal funds.11 After receiving more than 350 public comments on the 

advanced notice of proposed guidance, OMB published its circular reform 

proposal in February 2013 and plans to implement the reforms by 

December 2013.12 OMB officials believe that once implemented, these 

reforms have the potential to make grant programs more efficient and 

effective by eliminating unnecessary and duplicative requirements and 

strengthening the oversight of grant dollars by focusing on areas such as 

eligibility, monitoring of subrecipients, and adequate reporting.

Launched in 2003, Grants.gov is a website the public can use to search 

and apply for federal grant opportunities. Officials we spoke to from 

associations representing state and local governments, universities, and 

nonprofits praised Grants.gov. Many noted that it simplified the pre-award 

stage by making it easier for applicants to search for and identify federal 

grant funding opportunities. Specifically, one organization said the site 

does an excellent job categorizing grants by topic, making it easier for 

resource-constrained applicants that may not have a professional grant 

writer to search for relevant grants.

 

10OMB’s effort is in response to Executive Order 13520, which directed OMB to work with 

executive branch agencies; state, local, and tribal governments; and other key 

stakeholders to evaluate potential reforms to federal grants policies. See Exec. Order No. 

13520, Reducing Improper Payments and Eliminating Waste in Federal Programs, 74 

Fed. Reg. 62,201 (Nov. 25, 2009).

11“Reform of Federal Policies Relating to Grants and Cooperative Agreements: Cost 

Principles and Administrative Requirements (including Single Audit Act),” Advance Notice 

of Proposed Guidance, 77 Fed. Reg. 11,778 (Feb. 28, 2012). 

12“Reform of Federal Policies Relating to Grants and Cooperative Agreements; Cost 

Principles and Administrative Requirements (Including Single Audit Act),” Proposed 

Guidance, 78 Fed. Reg. 7282 (Feb. 1, 2013).

Simplifying the Pre-Award 

Phase by Improving 

Grants.gov
 

Page 10 GAO-13-383 Grants Management

However, grantee association officials also raised concerns about 

aspects of the site. For example, although there is an OMB policy 

directive establishing a standard format for federal funding opportunity 

announcement requirements, grantee officials said that in practice the 

lack of a standardized grants announcement can increase their burden 

because extra time is required to determine eligibility and other 

requirements.13 We have also reported that persistent management 

challenges, such as a lack of performance measures and communication 

with stakeholders and unclear roles and responsibilities among the 

governance entities, have adversely affected Grants.gov operations.14

Since we first reported on these issues in July 2009, HHS has made 

some progress to address these challenges and increase the 

effectiveness and long-term viability of Grants.gov. Specifically, HHS is 

taking steps to implement several of our prior recommendations. For 

example, in 2012, the Program Management Office (PMO) adopted a 

performance monitoring tool that currently monitors 22 technical 

measures covering availability, usage, and performance. The PMO also 

hired a communications director whose responsibilities include outreach 

to stakeholders. The PMO reported that starting in fiscal year 2013, HHS 

plans to more actively solicit input from grants applicants on ways to 

enhance the site. While it is too soon to determine the effectiveness of 

these reforms, tracking site performance and developing an effective twoway communication strategy to engage with stakeholders are practices 

which, if thoughtfully and deliberately implemented, may address the 

challenges we identified.

Promoting shared information technology (IT) solutions for managing 

grants—an original goal of P.L. 106-107 and the governance bodies 

charged with implementing the legislation—could provide an additional 

way to simplify post-award grants management activities by consolidating 

the administration and management of grants across agencies and 

potentially reducing the costs of multiple agencies developing and 

maintaining grants management systems. However, it is unclear whether 

 

13 Office of Management and Budget, Office of Federal Financial Management Policy 

Directive on Financial Assistance Program Announcements, Notice of Issuance of Final 

Policy Directive, 68 Fed. Reg. 37,370 (June 23, 2003).

14GAO-09-589 and GAO-11-478. 

Promoting Post-Award 

Shared Information 

Technology Solutions for 

Grants Management
 

Page 11 GAO-13-383 Grants Management

promoting shared IT systems for grants management is still a priority, and 

if so, which agency is in charge of this effort.

In 2004, OMB established the GMLOB to develop government-wide 

solutions intended to support end-to-end grants management activities, 

including shared grants management systems (which could include 

modules for intake of applications, peer review, award, payment, and 

performance monitoring and final closeout of the grant award). In 2005, 

OMB chose three agencies—the National Science Foundation (NSF), the 

Administration for Children and Families within the Department of Health 

and Human Services (HHS), and the Department of Education—to 

develop grants management systems that they could provide for other 

agencies. Currently, NSF operates Research.gov, which has one other 

external agency customer that uses individual modules of the 

Research.gov system; the Administration for Children and Families 

operates GrantSolutions.gov, which services 17 government customers, 8 

of which are HHS components; and Education operates G5, which has 13 

customers all of which are Education components (see appendix III for a 

list of NSF, HHS, and Education customers).

Since 2012, there has been uncertainty regarding the status of and future 

plans for the operational elements of what was the GMLOB. OMB folded 

GMLOB into the Financial Management Line of Business (FMLOB)—an 

initiative focused on financial systems improvements— in 2012, and 

initially announced the Treasury Department would be the managing 

partner.15 Later, OMB informed us the General Services Administration 

(GSA) would be the managing partner, but GSA officials informed us they 

were only the managing partner of the FMLOB from June to September 

30, 2012. GSA officials also told us that according to OMB officials, GSA 

would not be responsible for working with NSF, HHS, or Education, or 

promoting shared service agreements for grants management systems. 

As of March 2013, OMB had not publicly announced who the managing 

partner of FMLOB would be for fiscal year 2013. After receiving a draft 

copy of this report for its review and comment, OMB issued a “Controller 

Alert” on April 29, 2013, announcing that, for fiscal year 2013, the 

Department of the Treasury’s Office of Financial Innovation and 

Transformation (FIT) will serve as Managing Partner and the Program 

 

15U.S. Office of Management and Budget, Report to Congress on the Benefits of the 

President’s E-government Initiatives, Fiscal Year 2012 (Washington, D.C.: Mar. 19, 2012).
 

Page 12 GAO-13-383 Grants Management

Management Office for the FMLOB. OMB also highlighted the Controller 

Alert in its comment letter to us, also dated April 29, 2013 (see appendix 

IV for OMB’s letter).

In May 2012, OMB issued guidance directing agencies to find ways to 

spend federal dollars on IT more efficiently to compensate for a 10 

percent reduction in overall IT spending.16 The guidance also directed 

agencies to propose how they would reinvest the savings from proposed 

cuts to produce a favorable return on investments. One of the strategies 

OMB had previously highlighted to reduce duplication, improve 

collaboration, and eliminate waste across agency boundaries was the 

Federal IT Shared Services Strategy, also referred to as “Shared First,” 

an effort to share common IT services across agencies. The guidance did 

not specifically mention grants management systems, and it is unclear 

whether OMB intends to encourage other agencies to partner with NSF, 

HHS, and Education to continue sharing services. In its April 29, 2013, 

Controller Alert, OMB stated that in accordance with OMB’s guidance on 

shared services, the Treasury’s FIT will “lead efforts to transform federal 

financial management, reduce costs, increase transparency, and improve 

delivery of agencies’ missions by operating at scale, relying on common 

standards, shared services, and using state-of-the-art technology.” 17 

However, OMB’s Controller Alert did not address whether the roles of 

NSF, HHS, and Education would change as a result of FIT’s leadership in 

this area. 

As part of its efforts to improve grants management government-wide, 

OMB has instructed agencies to improve the timeliness of their grant 

closeout procedures. Once the grant’s period of availability to the grantee 

has expired, the grant can be closed out and the funds deobligated by the 

awarding agency. Timely closeout helps to ensure that grantees have met 

all financial and reporting requirements. It also allows federal agencies to 

identify and redirect unused funds to other projects and priorities as 

authorized or to return unspent balances to the Department of the 

Treasury. In August 2008, we reported that during calendar year 2006 

 

16M-12-13, OMB Fiscal Year 2014 Budget Guidance, (Washington, D.C.: May 18, 2012).

17 The Federal Information Technology Shared Services Strategy is available at: 

http://www.whitehouse.gov/sites/default/files/omb/assets/egov_docs/shared_services_stra

tegy.pdf.

Improving the Timeliness 

of Grant Closeout and 

Reducing Undisbursed 

Balances at the End of the 

Grant Life Cycle
 

Page 13 GAO-13-383 Grants Management

about $1 billion in undisbursed funding remained in expired grant 

accounts in the largest civilian payment system for grants, the Payment 

Management System.18 In a follow-up report issued in April 2012, we 

found that at the end of fiscal year 2011 there was more than $794 million 

in funding remaining in expired grant accounts.19 To improve the 

timeliness of grant closeout, we recommended that OMB instruct all 

executive departments and independent agencies to annually track the 

amount of undisbursed grant funding remaining in expired grant accounts 

and report on the status and resolution of the undisbursed funding in their 

annual performance plan and annual performance and accountability 

report. In response to our recommendations, on July 24, 2012, the 

Controller of OMB issued a “Controller Alert” to all federal chief financial 

officers instructing agencies to take appropriate action to close out grants 

in a timely manner. The alert provided strategies agencies should 

consider to achieve this goal, including establishing annual or semiannual 

performance targets for timely grant closeout, monitoring closeout activity, 

and tracking progress in reducing closeout backlog.

OMB has taken actions to address persistent management challenges 

identified in several of our reports issued from 2005 through 2011. For 

example, in October 2011, OMB replaced the Grants Executive Board 

(GEB) and Grants Policy Committee (GPC) with the Council on Financial 

Assistance Reform (COFAR), an interagency council, and charged it with 

providing policy-level leadership for the grants community and 

implementing reforms to improve effectiveness and efficiency in federal 

grants. Although COFAR has recently identified several high-level 

priorities for 2013 to 2015, the council faces some of the same challenges 

we previously identified, such as the lack of a comprehensive plan for 

implementing reforms, confusion over roles and responsibilities among 

grants governance bodies, and inconsistent communication and outreach 

to the grantee community. Moreover, based on recent reviews of 

collaborative mechanisms and management consolidation efforts, we 

found that interagency councils benefit when participants identify goals, 

devise a plan for reaching and achieving those goals, clearly articulate 

 

18GAO, Grants Management: Attention Needed to Address Undisbursed Balances in 

Expired Grant Accounts, GAO-08-432 (Washington, D.C.: Aug. 29, 2008).

19GAO-12-360. 

OMB and the Council 

on Financial 

Assistance Reform 

Face Persistent 

Challenges in 

Reforming Federal 

Grants Management
 

Page 14 GAO-13-383 Grants Management

roles and responsibilities, and develop an effective two-way 

communication strategy with relevant stakeholders.20,

21

In a September 2012 report, we identified certain key features for 

effective interagency collaborative efforts, including the importance of 

identifying goals for short-and long-term outcomes. Identifying goals can 

help decision makers reach a shared understanding of what problems 

genuinely need to be fixed, how to balance differing objectives, and what 

steps need to be taken to create not just short-term advantages but longterm gains.22

In February 2013, COFAR posted five priority goals for fiscal years 2013 

to 2015 to the U.S. Chief Financial Officers Council website:23

1. Implement revised guidance to target risk and reduce administrative 

burden.

2. Standardize federal agencies’ business processes to streamline data 

collections.

3. Provide public validated financial data that aligns spending 

information with core financial accounting data in coordination with the 

work of the GATB.

4. Ensure that federal agencies’ grants professionals are highly qualified.

5. Reduce the number of unclean audit opinions for grant recipients.

For each priority, COFAR identified proposed deliverables and milestone 

dates for those deliverables. As of May 2013, COFAR had not released to 

the public an implementation plan that includes other key elements such 

 

20GAO, Managing for Results: Key Considerations for Implementing Interagency 

Collaborative Mechanisms, GAO-12-1022 (Washington, D.C.: Sept. 27, 2012).

21GAO, Streamlining Government: Questions to Consider When Evaluating Proposals to 

Consolidate Physical Infrastructure and Management Functions, GAO-12-542

(Washington, D.C.: May 23, 2012).

22GAO-12-542. 

23See https://cfo.gov/cofar/. Also, on February 8, 2013, COFAR and members of the grant 

community held a webcast to discuss in a roundtable format the proposed reforms and 

COFAR priorities.

COFAR Announced Grants 

Management Reform 

Goals, but Key

Implementation Elements 

Remain Undefined
 

Page 15 GAO-13-383 Grants Management

as performance targets, mechanisms to monitor, evaluate, and report on 

progress made towards stated goals, and goal leaders who can be held 

accountable for those goals. Establishing implementation goals and 

tracking progress toward those goals helps to pinpoint performance 

shortfalls and suggest midcourse corrections, including any needed 

adjustments to future goals and milestones. Reporting on these activities 

can help key decision makers within the agencies, as well as 

stakeholders, obtain feedback for improving both policy and operational 

effectiveness. 

In response to the draft report we provided for them to review, OMB 

officials stated in their comment letter dated April 29, 2013, that they used 

a more detailed internal project plan to monitor timelines and roles and 

responsibilities. They acknowledged that more needs to be done by 

pointing out that as the work of COFAR matured, the council would be 

better able to articulate metrics that allowed for a more thorough 

evaluation of whether the policy changes were having their intended 

impacts. They added that the publically-stated deliverables were intended 

to leave room for further evolution of the right approach for 

implementation. While we have not been able to assess or validate 

OMB’s newly provided information on COFAR’s approach, we believe a 

more detailed, publically-available implementation plan that will allow 

Congress and the public to better monitor the progress of the reforms is 

needed.

We previously reported that when interagency councils clarify who will do 

what, identify how to organize their joint and individual efforts, and 

articulate steps for decision making, they enhance their ability to work 

together and achieve results.24 In interviews with federal grant 

management officials we were told that OMB and the council do not 

always clearly articulate the roles and responsibilities for various 

streamlining initiatives, plans for future efforts, and means for engaging 

small grant-making agency stakeholders and utilizing agency resources.

Agency officials involved with current grants management reforms told us 

that the roles and responsibilities for various streamlining initiatives are 

not always clear. For example, OMB designated Treasury as the 

 

24GAO-12-1022. 

Lack of Clearly Articulated 

Roles and Responsibilities 

Continues to Be a 

Challenge
 

Page 16 GAO-13-383 Grants Management

managing partner of the FMLOB initiative, then designated GSA as the 

managing partner, but only for four months. As of March 2013, OMB had 

not issued a subsequent announcement as to which agency would take 

over the grants management related functions of FMLOB after GSA. In 

the meantime, the former GMLOB consortia leads are unsure whether 

promoting shared grants management systems is still a priority. As 

previously mentioned, OMB’s Controller Alert of April 29, 2013, 

announced that Treasury’s FIT office will serve as Managing Partner and 

the Program Management Office for the FMLOB for fiscal year 2013. 

However, the Controller Alert did not address whether the roles of NSF, 

HHS, and Education would change as a result of FIT’s leadership in this 

area. 

In addition to OMB, eight agencies are permanent members of COFAR. 

COFAR also has a rotating member, currently NSF, which serves a twoyear term.25 Agency officials involved with COFAR told us that the council 

is still determining the role of the rotating agency and how COFAR will 

reach out to smaller grant-making agencies not on the council. According 

to OMB officials, they are still working out how to provide other agencies 

with a communication channel and the opportunity to review and 

comment on proposed changes. In its April 29, 2013, comment letter, 

OMB acknowledged that the expectation was that the rotating member 

would be able to represent the views of smaller agencies and that there 

may be federal officials or agencies that wish to be more involved or not 

fully aware of the all the COFAR’s work. OMB officials also stated that 

COFAR staff will help the rotating agency gather input and feedback from 

the broader collection of smaller agencies. OMB officials said 

incorporating the views of all federal grant-making agencies was essential 

to the work of the COFAR and that their strategy would continue to evolve 

over time, as it will for engaging with nonfederal stakeholders. 

Agency officials also told us that they are still trying to determine how to 

bring together financial, policy, and IT staff, and incorporate their areas of 

expertise into discussions on proposed policy and program changes. One 

agency official noted this had been a challenge with the previous grants 

management structure. She said that the GPC focused on policy and the 

 

25The eight agencies that provide the largest amounts of financial grants assistance and 

are permanent COFAR members are the Departments of Agriculture, Education, Energy, 

Health and Human Services, Homeland Security, Housing and Urban Development, 

Labor, and Transportation.
 

Page 17 GAO-13-383 Grants Management

GEB focused on systems and technology solutions and, even though 

there was some level of overlap among the people staffing the two 

boards, a stronger connection was needed to ensure that streamlining 

efforts included technology and policy expertise. In their comment letter, 

OMB officials stated they made repeated efforts to solicit the views of all 

federal agencies through town hall meetings, formal circulation of draft 

policies for comment prior to publication, and conference calls to share 

information on key issues. 

We have noted that communication is not just “pushing the message out,” 

but should facilitate a two-way, honest exchange and allow for feedback 

from relevant stakeholders.26 We previously reported that grantees felt 

that the lack of opportunities to provide timely feedback resulted in poor 

implementation and prioritization of streamlining initiatives and limited 

grantees’ use and understanding of new functionality of electronic 

systems.27 For example, grantees experienced problems stemming from 

policies and technologies that were inconsistent with their business 

practices and caused inefficiencies in their administration of grants.

Members of the grantee community told us they continue to have 

concerns because they do not see a role for themselves as OMB and 

COFAR develop priorities for reforming federal grants management. For 

example, officials from the eight associations representing state and local 

governments, universities, and nonprofit recipients told us that outreach 

to grantees on proposed reforms continues to be inconsistent or could be 

improved. Ten organizations representing state and local officials, 

including some of the same organizations we interviewed, submitted a 

letter to OMB after the creation of COFAR was announced, expressing 

their disappointment that there would be no state or local representation 

on the council.28 In the letter, the state and local officials stated that formal 

 

26GAO-12-542 

27GAO-06-566. 

28Signatories to the letter include officials from the National Governors Association, 

National Conference of State Legislatures, Council of State Governments, National 

Association of Counties, National League of Cities, U.S. Conference of Mayors, 

International City/County Management Association, National Association of State 

Auditors, Comptrollers, and Treasurers, National Association of State Chief Information 

Officers, and National Association of State Budget Officers.

Grantee Stakeholders 

Continue to Report 

Limited Opportunities to 

Provide Feedback on 

Grants Management 

Reforms 
 

Page 18 GAO-13-383 Grants Management

engagement of all stakeholder parties is necessary for success and that 

their exclusion from the council undermined the important work of the 

council before it even commenced. 

OMB officials stated they are seeking different forums to engage with 

members of the grantee community. Several association officials said 

they appreciated that OMB reached out to them for comment before 

proposing changes to OMB circulars. OMB and COFAR also hosted a 

webinar in February 2013 to coincide with the circular reform proposal, 

and invited representatives from grantee associations to discuss their 

concerns and ask questions. In addition, following their review of the draft 

report, OMB officials provided us with a list of invitations for speaking 

engagements they have accepted since February 2013 as a snapshot of 

the types of engagements they participate in to communicate with 

interested stakeholder groups.

While improved outreach to the broader grantee community is an ongoing 

challenge, certain groups of grantees have established communication 

channels with the federal government. These approaches could be a 

useful model for COFAR to build upon with different grantee communities. 

For example, we have previously reported that the research community 

established avenues of communication with relevant federal agencies 

through the Federal Demonstration Partnership (FDP), a cooperative 

initiative of 10 agencies and over 90 research institutions.29 Agency 

officials and members of the research community continue to describe 

this partnership as an effective model for promoting two-way 

communication. Officials from the HHS Grants.gov PMO told us they 

solicit information and feedback related to the functionality of Grants.gov 

through quarterly meetings and open forum-type sessions with FDP 

members. According to these officials, consistent communication with the 

FDP has enabled them to survey the community and determine 

appropriate improvements to the system to avoid undertaking inefficient 

or counterproductive revisions to the Grants.gov system. Likewise, a FDP 

official told us face-to-face meetings with grantor agency officials allow 

them to provide input on proposed changes to grants management 

policies and practices.

 

29GA0-06-566.
 

Page 19 GAO-13-383 Grants Management

In a second example, several state and local grantee association officials 

referred to the communication channels that were set up while 

implementing the Recovery Act as an example of effective two-way 

communication they would like to see replicated. In the same letter 

submitted to OMB after the creation of COFAR was announced, 10 

organizations representing state and local officials referenced the 

constant and consistent communication OMB and the Recovery Board 

engaged in with members of the grantee community as a requirement for 

success. We have also previously reported that OMB and Recovery 

Board officials held weekly conference calls with state and local 

representatives to hear comments, concerns, and suggestions from them 

and share decisions.30 As a result of these calls, federal officials changed 

their plans and related guidance. This type of interaction was essential in 

clarifying federal intent, addressing questions, and establishing working 

relationships for the implementation efforts. However, several officials 

said these outreach efforts have dwindled, and they again feel OMB is not 

involving them in COFAR priority-setting discussions. Although the 

circumstances surrounding the Recovery Act were unusual in that there 

was a high level of funding available that had to be spent quickly, there 

are opportunities for COFAR to learn what communication strategies 

worked for agency officials and grantees, and apply those strategies.

Another possible mechanism for improving communication with states 

and localities might be to use the Partnership Fund for Program Integrity 

Innovation (Partnership Fund) as a venue for federal policymakers to 

communicate and engage with the grantee community on proposed 

grants management reforms. Established by the 2010 Consolidated 

Appropriations Act, and administered by OMB, the Partnership Fund 

allows federal, state, local, and tribal agencies to pilot innovative ideas for 

improving assistance programs in a controlled environment. We 

previously reported that as part of implementing the Partnership Fund, 

OMB established a Federal Steering Committee, consisting of senior 

policy officials from federal agencies that administer benefits programs 

and formed the “Collaborative Forum.”31 The Collaborative Forum is made 

up of state representatives and stakeholder experts, including federal 

agencies, nongovernmental organizations, and others, who collaborate to 

 

30GAO-12-913T. 

31GAO, Streamlining Government: Key Practices from Shared Efficiency Initiatives Should 

Be Shared Governmentwide, GAO-11-908 (Washington, D.C.: Sept. 30, 2011).
 

Page 20 GAO-13-383 Grants Management

generate, develop, and consult on potential pilot projects. The forum’s 

website, http://collaborativeforumonline.com, is used to hold discussions 

about potential projects and to share lessons and best practices among 

members. 

In a time of fiscal constraint, continuing to support the current scope and 

breadth of federal grants to state and local governments will be a 

challenge. Given this fiscal reality, it becomes more important to design 

and implement grants management policies that strike an appropriate 

balance between ensuring accountability for the proper use of federal 

funds without increasing the complexity and cost of grants administration 

for agencies and grantees. Duplicative, unnecessarily burdensome, and 

conflicting grants management requirements result in resources being 

directed to nonprogrammatic activities, which could prevent the costeffective delivery of services at the local level. Streamlining and 

simplifying grants management processes is critical to ensuring that 

federal funds are reaching the programs and services Congress intended.

In October 2011, OMB created COFAR and tasked it with overseeing the 

development of federal grants management policy. Although COFAR 

recently identified some priorities, it has not yet released to the public an 

implementation plan that includes performance targets, mechanisms to 

monitor, evaluate, and report on progress made towards stated goals,

and goal leaders who can be held accountable for those goals. Although 

OMB officials provided us with some additional and updated information 

in their comment letter that we were unable to assess or validate, they 

agreed with our recommendations that OMB and COFAR need to 

develop an implementation schedule and mechanisms to monitor, 

evaluate and report on results, clarify roles and responsibilities for the 

various streamlining initiatives and engagement with federal stakeholders, 

and develop an effective two-way communication strategy that includes 

the grant recipient community. OMB officials acknowledged that more 

needs to be done to clarify roles and responsibilities and plans for moving 

forward with various streamlining initiatives. Moreover, stakeholders 

continue to express frustration about limited opportunities to provide 

feedback on proposed reforms. If grantees remain isolated from COFAR’s 

development of new grants management systems and policies, those 

systems and policies could be ineffective or require more resources to 

use.

Conclusions 
 

Page 21 GAO-13-383 Grants Management

We recommend the Director of OMB, in collaboration with the members 

of COFAR, take the following three actions:

1. Develop and make publicly available an implementation schedule that 

includes performance targets, goal leaders who can be held 

accountable for each goal, and mechanisms to monitor, evaluate, and 

report on results.

2. Clarify the roles and responsibilities for various streamlining initiatives 

and steps for decision making, in particular how COFAR will engage 

with relevant grant-making agency stakeholders and utilize agency 

resources.

3. Improve efforts to develop an effective two-way communication 

strategy that includes the grant recipient community, smaller grantmaking agencies that are not members of COFAR, and other entities 

involved with grants management policy.

We provided a draft of this report to OMB, Education, GSA, HHS, and 

NSF for comment. NSF and HHS provided technical comments, which we 

incorporated as appropriate. In its written comments, OMB generally 

concurred with our findings and recommendations but also said there had 

been significant progress on the grants management streamlining 

process in recent months, including

• using a more detailed project plan internally to monitor progress 

made towards the priorities established for COFAR; 

• making efforts to solicit the views of all federal agencies including 

town hall meetings, formal circulation of draft policies for comment 

prior to publication, and conference calls to share information on 

key issues; and

• using meetings, webinars, and teleconferences to inform a diverse 

cross section of stakeholder groups about the work that the 

COFAR is doing, and to get their feedback on upcoming policy 

changes.

Because OMB only provided us with additional and updated information 

at the end of its comment period, we could neither verify nor validate it. 

However, we have incorporated OMB’s comments into the body of the 

report, as appropriate, in order to make our review as up-to-date as 

possible.

Recommendations for 

Executive Action

Agency Comments 

and Our Evaluation
 

Page 22 GAO-13-383 Grants Management

As agreed with your offices, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Secretaries of 

Education, and Health and Human Services; Administrator of GSA; 

Director of the National Science Foundation; the Director of the Office of 

Management and Budget and to appropriate congressional committees. 

The report also is available at no charge on the GAO Web site at 

http://www.gao.gov. 

If you or your staff members have any questions or wish to discuss the 

material in this report further, please contact me at (202) 512-6806 or 

czerwinskis@gao.gov. Contact points for our Offices of Congressional 

Relations and Public Affairs may be found on the last page of this report. 

GAO staff who made key contributions to this report are listed in 

Appendix V.

Stanley J. Czerwinski

Director, Strategic Issues 
Appendix I: Scope and Methodology

Page 23 GAO-13-383 Grants Management

We were asked to examine federal grants management reform efforts. To 

accomplish this, we reviewed (1) what the Office of Management and 

Budget (OMB) and other federal grants governance bodies have done 

since the passage of P.L. 106-107 in 1999 to reform grants management 

processes and reduce unnecessary burdens on applicants, grantees, and 

federal agencies; and (2) what actions, if any, have been taken to 

address what we have found to be persistent management challenges, 

such as the lack of a comprehensive plan for implementing reforms, 

confusion over roles and responsibilities among grants governance 

bodies, and inconsistent two-way communication with stakeholders.

To address both objectives, we reviewed P.L. 106-107; and OMB 

circulars and guidance such as OMB-12-01, “Creation of the Council on 

Financial Assistance Reform,” OMB A-102, “Grants and Cooperative 

Agreements With State and Local Governments,” and A-110, “Uniform 

Administrative Requirements for Grants and Other Agreements with 

Institutions of Higher Education, Hospitals and Other Non-Profit 

Organizations,” which describe administrative requirements for different 

types of grantees, and OMB’s February 2012 advanced notice of 

proposed guidance, which proposes several ideas for circular reforms.1

We also reviewed action plans created by former and current interagency 

councils with responsibility for overseeing grants management reforms, 

as well as our previous work and other literature on grants management 

initiatives and the related challenges that have undermined the 

government’s ability to simplify grants management processes, reduce 

unnecessary burden on applicants, grantees, and federal agencies, and 

improve delivery of services to the public. We also reviewed our previous 

work on collaborative mechanisms and management consolidation 

efforts. 

We interviewed officials from OMB who are involved with developing and 

implementing government-wide grants management policy; officials at the 

three agencies that served as consortia leads for the 2004 to 2012 Grants 

Management Line of Business (GMLOB) e-government initiative: the 

National Science Foundation (NSF), Health and Human Services (HHS), 

and the Department of Education; and officials at the agency that 

managed the Financial Management Line of Business (FMLOB) e-

 

1

“Reform of Federal Policies Relating to Grants and Cooperative Agreements: Cost 

Principles and Administrative Requirements (including Single Audit Act),” Advance Notice 

of Proposed Guidance, 77 Fed. Reg. 11,778 (Feb. 28, 2012).

Appendix I: Scope and Methodology
Appendix I: Scope and Methodology

Page 24 GAO-13-383 Grants Management

government initiative in 2012: the General Services Administration (GSA). 

To capture the perspective of grantor agencies, we spoke to officials from 

HHS, NSF, and the Department of Education in their grant-making and 

administration capacities. To understand grantee perspectives, we 

interviewed officials from grantee associations that represent a variety of 

grantee types including state and local governments, nonprofit 

organizations, and universities.

To select the grantee associations that we interviewed, we relied on three 

data sources:

4. Our previous work on grant streamlining which included 31 grantee 

associations separated into four categories: state government, local 

and regional government, nonprofits, and tribal;

5. A list of grant associations included on the Grants.gov website; and

6. Additional grantee associations that have been active in grantsrelated topics in the past.

We selected 16 grantee associations to contact. These associations 

represented a variety of grantee types from state and local government, 

nonprofit organizations, as well as associations representing grantees on 

crosscutting grants related issues. In addition, the associations could offer 

a historical perspective on federal efforts to streamline grants 

management. Of the 16 associations we contacted, 8 associations said 

they were knowledgeable about grants management reforms and could 

answer our questions. We interviewed officials at these 8 associations:

• National Association of State Auditors, Comptrollers, and Treasurers

• National Association of State Budget Officers

• National Association of Regional Councils

• National Association of Counties

• National Grants Management Association

• National Grants Partnership

• Federal Demonstration Partnership

• National Association of Chief Information Officers

Two additional associations, Federal Funds Information for States and 

National Council of Nonprofits, sent us comments on grants management 

reforms in writing.

We conducted this performance audit from July 2012 to May 2013 in 

accordance with generally accepted government auditing standards. 
Appendix I: Scope and Methodology

Page 25 GAO-13-383 Grants Management

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.
Appendix II: Table of Selected Grants 

Management Reforms

Page 26 GAO-13-383 Grants Management

Name of Initiative Start date Type Content

The Federal Financial 

Assistance Management 

Improvement Act of 1999 

(Public Law 106-107), 

1999 Governance To address grants management issues, the act required the Office of 

Management and Budget (OMB) to direct, coordinate, and assist federal 

agencies in establishing common grants management systems, and 

simplifying their application, administrative, and reporting procedures 

with the goal of improved efficiency and delivery of services to the public. 

The law sunsetted in 2007.

Grants Policy Committee 

(GPC) 

1999 Governance The Chief Financial Officers (CFO) Council established the GPC to 

implement P.L. 106-107. Composed of grants policy experts from across 

the federal government, the GPC oversaw the efforts of cross-agency 

work groups focusing on different aspects of grants management, 

recommended policies and practices to OMB, and coordinated related 

interagency activities. OMB replaced the GPC in 2011 with the Council 

on Financial Assistance Reform (COFAR).

Grants Executive Board 

(GEB) 

2002 Governance This board consisted of senior officials from federal grant-making 

agencies and provided strategic direction and oversight of Grants.gov, a 

grant identification and application portal. OMB coordinated grants 

management policy through the board and the GPC until October 2011, 

when OMB announced that COFAR would replace both of these federal 

grant bodies.

Grants.gov 2003 Process In response to P.L. 106-107, OMB created Grants.gov, a central grant 

identification and application website for federal grant programs. The 

Grants.gov oversight and management structure includes HHS, the 

managing partner agency, the Grants.gov Program Management Office, 

which is housed within HHS and responsible for day-to-day 

management, and formerly the GEB which provided leadership and 

resources. The GPC was also involved because of its role in streamlining 

pre-award policies and implementing P.L. 106-107.

Grants Management Line of 

Business (GMLOB)

2004 Process Established to support the development of a government-wide solution to 

support end to-end grants management activities that promote citizen 

access, customer service, and agency financial and technical 

stewardship. In 2005, OMB selected the Department of Health and 

Human Services (HHS) and the National Science Foundation (NSF) to 

jointly lead the effort. Later, NSF took over the leadership role. In fiscal 

year 2012, it became part of the Financial Management Line of 

Business.

Federal Funding 

Accountability and 

Transparency Act of 2006 

(FFATA) 

2006 Transparency This act required OMB to establish a free, publicly accessible website 

containing data on federal awards and subawards. OMB began providing 

data on federal awards on USAspending.gov in December 2007 and 

phased in reporting on subawards in 2010. 

American Recovery and 

Reinvestment Act of 2009 

(Recovery Act)

2009 Transparency Congress and the administration built provisions (such as quarterly use 

and outcome reporting) into the Recovery Act to increase transparency 

and accountability over spending. The Recovery Act called for a website 

(Recovery.gov) for the public to access reported data. A second website 

(FederalReporting.gov) was established so grant recipients could report 

their data. The Recovery Act also established the Recovery 

Accountability and Transparency Board to coordinate and conduct 

oversight of funds distributed under the act in order to prevent fraud, 

waste, and abuse.

Appendix II: Table of Selected Grants 

Management Reforms
Appendix II: Table of Selected Grants 

Management Reforms

Page 27 GAO-13-383 Grants Management

Name of Initiative Start date Type Content

Government Accountability 

and Transparency Board 

(GATB) 

2011 Transparency This board, established by an executive order, provides strategic 

direction for enhancing the transparency of federal spending and 

advance efforts to detect and remediate fraud, waste, and abuse in 

federal programs. It is charged to work closely with the existing Recovery 

Board to extend its successes and lessons learned to all federal 

spending.

Council on Financial 

Assistance Reform (COFAR)

2011 Governance This council replaced the GPC and GEB in October 2011. OMB charged 

COFAR with identifying emerging issues, challenges, and opportunities 

in grants management and policy and providing recommendations to 

OMB on policies and actions to improve grants administration. COFAR is 

also expected to serve as a clearinghouse of information on innovations 

and best practices in grants management. COFAR is made up of the 

OMB Controller and the Chief Financial Officers from the largest eight 

grant-making agencies and one of the smaller federal grant-making 

agencies. The latter serves a rotating 2-year term. 

Grants Circular Reforms 2012 Process In February 2012, OMB published an advanced notice of proposed 

guidance detailing a series of reform ideas that would standardize 

information collection across agencies, adopt a risk-based model for 

single audits, and provide new administrative approaches for determining 

and monitoring the allocation of federal funds. After receiving more than 

350 public comments on its advanced notice of proposed guidance, 

OMB published its circular reform proposal in February 2013, and plans 

to implement the reforms by December 2013.

Grant Closeout Controller 

Alert 

2012 Process To improve the timeliness of grant close out and reduce undisbursed 

balances, the Controller of OMB issued a “Controller Alert” to all federal 

chief financial officers instructing agencies to take appropriate action to 

closeout grants in a timely manner. It provided a number of strategies 

such as establishing annual performance targets for timely grant close 

out.

Source: GAO.

Legend:

Governance initiatives: Intended to make changes that affect policy and oversight

Process initiatives: Intended to simplify aspects of the grants life cycle.

Transparency initiatives: Intended to increase the transparency of information detailing federal 

awards and expenditures
Appendix III: Grants Management Line of 

Business Consortia Leads and Customers as 

of January 2013

Page 28 GAO-13-383 Grants Management

G5—Department of Education:

• Department of Education

• Federal Student Aid

• Institute of Education Sciences

• Office of Chief Financial Officer

• Office of the Deputy Secretary

• Office of Elementary and Secondary Education

• Office of Innovation and Improvement

• Office of Legislation and Congressional Affairs

• Office of Postsecondary Education

• Office of Special Education and Rehabilitative Services

• Office of Special Education Programs

• Office of Vocational and Adult Education

• Office of English Language Acquisition, Language Enhancement 

and Academic Achievement for Limited English Proficient 

Students

• Office of Planning, Evaluation and Policy Development

• Risk Management Services

Grantsolutions.com—Department of Health and Human Services

• Department of Health and Human Services

• Administration for Children and Families

• Administration for Community Living

• Center for Medicare & Medicaid Services & Office of Consumer 

Information & Insurance Oversight

• Health Resources & Services Administration

• Indian Health Services

• Assistant Secretary for Preparedness & Response

• Office of Assistant Secretary for Health

• Office of the National Coordinator

• Department of State

• Over 20 bureaus and programs

• Department of Transportation

• Federal Railways Administration

• Federal Motor Carriers Administration

• Pipelines and Hazardous Materials Safety Administration

• United States Agency for International Development

Appendix III: Grants Management Line of 

Business Consortia Leads and Customers as 

of January 2013
Appendix III: Grants Management Line of 

Business Consortia Leads and Customers as 

of January 2013

Page 29 GAO-13-383 Grants Management

• Department of Treasury

• Internal Revenue Service

• Department of Homeland Security – U.S. Citizenship & 

Immigration Service

• Social Security Administration

• Denali Commission

Research.gov—National Science Foundation

• National Science Foundation

• National Aeronautics and Space Administration
Appendix IV: Comments from the Office of 

Management and Budget

Page 30 GAO-13-383 Grants Management

Appendix IV: Comments from the Office of 

Management and Budget
Appendix IV: Comments from the Office of 

Management and Budget

Page 31 GAO-13-383 Grants Management
Appendix IV: Comments from the Office of 

Management and Budget

Page 32 GAO-13-383 Grants Management
Appendix IV: Comments from the Office of 

Management and Budget

Page 33 GAO-13-383 Grants Management
Appendix IV: Comments from the Office of 

Management and Budget

Page 34 GAO-13-383 Grants Management
Appendix V: GAO Contact and Staff 

Acknowledgments

Page 35 GAO-13-383 Grants Management

Stanley J. Czerwinski, (202) 512-6806 or czerwinskis@gao.gov

In addition to the contact named above, Thomas M. James, Assistant 

Director, and Elizabeth Hosler, and Jessica Nierenberg, Analysts-inCharge, supervised the development of this report. Travis P. Hill, Melanie 

Papasian, and Carol Patey made significant contributions to all aspects of 

this report. Elizabeth Wood assisted with the design and methodology, 

Amy Bowser provided legal counsel, Donna Miller developed the report’s 

graphics, and Susan E. Murphy and Sandra L. Beattie verified the 

information in this report. 

Other important contributors included Beryl Davis, Kim McGatlin, Joy 

Booth, and James R. Sweetman, Jr.

Appendix V: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(450991)
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