Grants Management: Selected Agencies Should Clarify Merit-Based Award Criteria and Provide Guidance for Reviewing Potentially Duplicative Awards
Published: 2017-01-12T00:00:00

Fast Facts:
How do federal agencies decide who should receive grants?
Federal agencies must establish a merit-based review process for competitive grants. We looked at the design and implementation of this process at parts of the Departments of the Interior, Health and Human Services, and Agriculture.
We found that parts of these Departments could be more transparent about their criteria for evaluating grant applications, and that most could provide better guidance on identifying duplicative funding.
We made recommendations to improve this process, including more information in public notices and developing guidance for detecting duplicative funding.

Highlights:
section_title: Why GAO Did This Study
paragraphs: To improve the effectiveness and efficiency of grant-making in the federal government, in 2011 OMB created COFAR, and in 2014 OMB's Uniform Guidance came into effect. This included requirements for federal agencies to establish a merit-based review process for competitive grants and to assess grant applicants' risk. GAO was asked to review the design and implementation of merit-based grant award selection.
GAO reviewed the extent to which (1) selected subagencies followed certain required and recommended practices for evaluating competitive awards; (2) selected subagencies had processes to identify duplicative grant funding; and (3) COFAR has made progress in developing an implementation schedule for achieving its priorities. GAO assessed OMB and agency grant guidance for 19 grant programs at 6 subagencies—selected in part based on grant outlays in fiscal year 2014—and interviewed officials from these agencies and OMB as well as from associations representing different types of grantees. GAO's findings are not generalizable.
section_title: What GAO Found
paragraphs: GAO found that all 6 selected subagencies in the Departments of the Interior (Interior), Health and Human Services (HHS), and Agriculture (USDA) applied a risk assessment review before making final grant award decisions for the 19 grant programs examined, as required by the Office of Management and Budget's (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). GAO also found that while selected HHS and USDA subagencies generally followed certain other required and recommended practices established in the Uniform Guidance for providing specific information in their notices of public funding opportunity (public notices) announcing grants, selected Interior subagencies did not. Specifically, the Uniform Guidance recommends that public notices include (1) the merit-based criteria that will be used to assess grant applications, (2) the relative weights that will be applied to those assessment criteria, and requires (3) whether and how cost sharing will be used as a factor in assessing an application. GAO found that for several grant programs in selected Interior subagencies, public notices either did not state merit-based selection criteria, did not state the relative weights assigned to selection criteria, or did not clarify how cost sharing would be used to assess an application. Omitting this information from the public notices limits transparency for potential applicants.
OMB's Uniform Guidance does not direct agencies to review applicants for duplicative funding, but federal standards for internal control state that management should use quality information to achieve objectives and that management should document its policies. GAO found that only 2 of the 6 selected subagencies (1 in HHS and 1 in USDA) had developed formal processes and guidance for identifying potentially duplicative funding. GAO's previous work has pointed to potential risks that can arise—such as awarding duplicative grants—when agencies do not have guidance in place to direct staff to check for duplication when making competitive award decisions. Officials from the other 4 subagencies (in HHS, USDA, and Interior) that relied primarily on informal processes for identifying potentially duplicative grant funding acknowledged the importance of identifying information about applicants' other funding before making final grant award decisions.
The Council on Financial Assistance Reform (COFAR) updated its priorities for fiscal year 2016 but has made limited progress in planning, coordinating, and communicating its priorities. COFAR is an interagency council established by OMB to provide policy-level leadership for the grants community and to support reforms to improve the effectiveness and efficiency of federal grants. In 2013, GAO identified challenges related to COFAR's priorities and its lack of a plan to achieve implementation of these priorities and GAO recommended that OMB provide an implementation schedule for COFAR, clarify roles and responsibilities of COFAR members, and improve two-way communication with stakeholders. However, in this review GAO found that COFAR's challenges remain and it has still not (1) released an implementation schedule that includes performance targets and evaluation mechanisms; (2) established roles and responsibilities for its members; or (3) made progress in developing effective two-way communication with the grant recipient community and other stakeholders.
section_title: What GAO Recommends
paragraphs: GAO is making four recommendations to address the concerns identified at the specific subagencies, such as including required and recommended information in public notices for grant opportunities and developing guidance on reviewing applicants for potentially duplicative funding. All agencies agreed with the recommendations.

section_title: Letter
paragraphs: Federal grants are a critical tool for achieving important national  objectives. In fiscal year 2015, the federal government distributed more  than $600 billion in grants to state and local governments for a wide  variety of purposes, from building highways, bridges, and mass transit  systems to hiring teachers and increasing student access to higher  education. Over time, growth in the number of grant programs to state  and local governments and their level of funding has contributed to  greater diversity and complexity in federal grants management  processes.
In awarding federal grants, effective oversight and internal control is of  fundamental importance in assuring the proper and effective use of  federal funds to achieve program goals. Our previous grants  management work has found risks and vulnerabilities that exist in the pre- award stage. For example, we found that agencies awarded grants  without adequately documenting the grantee selection process. We also  found that agency internal control processes had weaknesses in terms of  carrying out and documenting management’s review of grant applications  and documenting grant award decisions. We identified one instance  where agency pre-award guidance did not apply to all competitive grant  programs within the agency—increasing the risk that agency grant  programs were not consistently checking for duplication and overlap prior  to making final grant award decisions. Eliminating duplication and  unnecessary overlap in grant award funding can save public dollars and  minimize waste. Our work also found that one agency did not perform  pre-award reviews until after the grants had been awarded.
In recent years, the Office of Management and Budget (OMB) has taken  action to improve the effectiveness and efficiency of grant-making across  the federal government. Specifically, in 2011 OMB created the Council on  Financial Assistance Reform (COFAR), an interagency council charged  with providing policy-level leadership for the grants community and  supporting reforms to improve the effectiveness and efficiency of federal  grants. In 2013, COFAR released its initial priorities for achieving better  controls and business processes in grant-making across the federal  government. Further, in December 2014 OMB’s Uniform Administrative  Requirements, Cost Principles, and Audit Requirements for Federal  Awards (Uniform Guidance) became effective for new grant awards. The  Uniform Guidance requires that federal agencies establish a merit-review  process for competitive grants. A merit-review process is characterized by  the establishment of criteria applied by the agency to evaluate the merit of  competitive grant applications and seeks to ensure that grant applications  submitted are reviewed in a fair, competitive, and transparent manner.
You asked us to review selected agencies’ design and implementation of  merit-based grant selection and the extent to which COFAR has met its  priorities. This report reviews: (1) the extent to which selected  subagencies followed certain required and recommended practices for  evaluating competitive grant awards; (2) the extent to which selected  subagencies attempt to identify potentially duplicative or overlapping  funding at the grant award level; and (3) the progress COFAR has made  in implementing its priorities and developing a detailed implementation  schedule for achieving its priorities.
To determine whether selected agencies have implemented merit-based  grant selection reviews and follow certain practices for evaluating  competitive awards, we selected three federal departments and two  subagencies at each for an in-depth review of grant application pre-award  procedures:
The United States Department of Agriculture (USDA) and its  subagencies, the National Institute of Food and Agriculture (NIFA)  and Food and Nutrition Service (FNS).
The Department of Health and Human Services (HHS) and its  subagencies, the National Institutes of Health (NIH) and Centers for  Disease Control and Prevention (CDC).
The Department of the Interior (Interior) and its subagencies, the  National Park Service (NPS) and Fish and Wildlife Service (FWS).
These departments were judgmentally selected (and therefore our results  are not generalizable) based on a combination of several criteria,  including: (1) amount of total grant outlays in fiscal year 2014 based on  data from OMB’s Historical Tables (HHS had the largest total grant  outlays in fiscal year 2014); (2) total number of grant and cooperative  agreement award announcements based on data from Grants.gov  between October 1, 2014 and August 20, 2015 (Interior had the largest  total number of grant announcements during this period); (3) and  membership in COFAR (HHS and USDA are permanent members of  COFAR). After selecting the three federal grant-making departments, we  selected the two subagencies with the most award announcements within  each department. We also selected 19 grant programs for in-depth review  from the six selected subagencies whose public notices of funding  opportunity (public notices) were posted and closed on Grants.gov  between December 26, 2014, and September 30, 2015 (see appendix I).  These programs were selected based on a mix of criteria, including the  number of days the public notice was posted, the type of funding  instrument (grants or cooperative agreements), and the number of  expected awards.
To understand whether these subagencies and grant programs followed  the Uniform Guidance for the selected awards, we obtained and  assessed grant program public notices; internal department and  subagency guidance related to their grant review process including  selection of peer reviewers; scoring systems; procedures for documenting  the review processes; and requirements for making public notices for  grants. To better understand identified practices for merit-based review of  grants, we reviewed government-wide guidance and our previous work on  the topic. Additionally, we interviewed officials from the selected  subagencies and grant programs to better understand how they review  competitive grant awards and apply merit-based grant review practices.  Although the results of our review are not generalizable to other grant  programs in other departments or subagencies, they are indicative of the  types of challenges that federal awarding agencies face when making  grants.
To determine the extent to which selected subagencies implement  controls to identify potentially duplicative or overlapping funding at the  grant award level, we reviewed our previous work on duplication, overlap,  and fragmentation. We reviewed subagency grant guidance to assess  whether grant managers evaluated grant applications for duplication and  overlap in the pre-award phase. We also interviewed subagency officials  to determine the approaches they took, if any, to identify any potential  overlap and duplication.
To determine the progress made by COFAR in implementing its publicly  stated priorities and for developing a detailed implementation schedule to  achieve these priorities, we reviewed publicly available documents on the  U.S. Chief Financial Officers Council website and our previous work on  COFAR’s priorities. We compared COFAR’s stated deliverables to stated  priorities in its 2013 priorities framework. We met with OMB staff to learn  more about COFAR’s progress on its priorities and its plans for the future.  Additionally, we interviewed officials from associations representing the  grantee stakeholder community to learn more about their perspectives on  COFAR’s priorities and understand how COFAR works and  communicates with those groups outside the federal sector.
We conducted this performance audit from July 2015 to January 2017 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.
subsections: section_title: Background
paragraphs: To achieve national objectives, the federal government relies on complex  networks and partnerships across federal, state, and local governments.  Grants are one tool the federal government uses to achieve national  priorities through nonfederal parties, including state and local  governments, educational institutions, and nonprofit organizations.  Federal grant outlays to state and local governments have generally  increased as measured in constant fiscal year 2015 dollars from $230  billion in fiscal year 1980 (or $91 billion in nominal dollars) to $624 billion  in fiscal year 2015 (see fig. 1). Of the approximately $275 billion in non- Medicaid grants to state and local governments in fiscal year 2015,  almost $186 billion in annual appropriations went to fund discretionary  grant programs, a portion of which were competitively awarded. Grants to  state and local governments represented 16 percent of federal spending  in fiscal year 2015.
subsections: section_title: The Grant Life Cycle and OMB’s Uniform Guidance
paragraphs: Competitively awarded federal grants generally follow a life cycle  comprising various stages: (1) pre-award (public notice and application);  (2) award; (3) implementation; and (4) closeout. 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. OMB’s Uniform Guidance  establishes several requirements for competitive grant awards, including  that federal awarding agencies: (1) notify the public of the grant  opportunity through an announcement, or public notice, which includes  providing the applicant with sufficient information to help them make a  decision about whether to submit an application and the criteria used to  evaluate the application; (2) establish a merit-review process for  competitive grants; and (3) develop a framework for risk assessment of  applicants for competitive grants.
The pre-award process varies from grant to grant, but it generally involves  preparing and posting the public notice on the federal government’s web  portal, Grants.gov, development and submission of the application by  applicants, review of applications by the agency, an external panel, or  both, and agency award decisions (see fig. 2). During the application  review, the Uniform Guidance recommends that applications should be  rated against pre-established criteria found in the public notice used to  evaluate merit. This rating can be either quantitative (i.e., percentages or  points) or qualitative (e.g., identifying applications as highly  recommended or not recommended). The Uniform Guidance directs that  agencies disclose in their public notice the relative weights or point values  assigned to the merit based criteria, providing applicants with information  about how the criteria will be applied. After applications are rated by  agency officials, an external panel, or both, the applications may be  ranked. Applications recommended for funding are forwarded to an  awarding official within the agency.
In the award stage, the agency identifies successful applicants and  announces award funding. The implementation stage includes payment  processing, agency monitoring, and recipient reporting, which may  include collection of 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.
In addition to the requirements established by the Uniform Guidance, our  prior work has identified practices federal awarding agencies should  follow to ensure a fair and objective evaluation and selection of  discretionary grant awards. These practices include communicating with  the potential applicants before the competition begins by providing  information prior to making grant award decisions on available funding,  key dates, funding priorities, types of projects to be funded, competition  rules such as eligibility, and technical reviews.
section_title: Overview of GAO’s Overlap and Duplication Work
paragraphs: In 2010, Congress included a provision in statute for GAO to identify  programs, agencies, offices, and initiatives with duplicative goals and  activities within departments and government-wide and report to  Congress annually. Since March 2011, we have issued annual reports  to Congress in response to this requirement. The annual reports describe  areas in which we found evidence of fragmentation, overlap, or  duplication among federal programs. In these reports we establish these  definitions:
Fragmentation refers to circumstances in which more than one federal  agency is involved in the same broad area of national need and  opportunities exist to improve service delivery.
Overlap exists when multiple agencies or programs have similar  goals, engage in similar activities or strategies to achieve them, or  target similar beneficiaries.
Duplication occurs when two or more agencies or programs are  engaged in the same activities or provide the same services to the  same beneficiaries.
We have stated that overlap might not necessarily lead to actual  duplication, and some degree of overlap and duplication may at times be  justified. Although the grant programs reviewed for this report represent  a diverse collection of federal funding opportunities, in our previous work  looking at grants for scientific research, we have also used the term  duplication to mean research that is scientifically unnecessary to replicate  or complement prior research results, or research inadvertently  conducted or funded that is very similar to other research.
section_title: Council on Financial Assistance Reform
paragraphs: In 2011, OMB created COFAR, an interagency council charged with  providing policy-level leadership for the grants community and  implementing reforms to improve the effectiveness and efficiency of  federal grants. COFAR’s activities include providing recommendations  to OMB on policies and actions necessary to effectively deliver, oversee,  and report on grants and cooperative agreements, as well as sharing with  executive departments and agencies best practices and innovative ideas  for transforming the delivery of this assistance. COFAR is intended to  identify emerging issues as well as challenges and opportunities in grants  management and policy, including, as appropriate, improvements to the  competitive grant-making process. COFAR is also to serve as a  clearinghouse of information on innovations and best practices in grants  management and, as appropriate, to sponsor and lead new efforts for  innovation.
The council includes the OMB Controller and officials from the eight  executive agencies that provide the largest amounts of financial grants  assistance: the Departments of Agriculture, Education, Energy, Health  and Human Services, Homeland Security, Housing and Urban  Development, Labor, and Transportation. In addition, in order to represent  the perspectives of other agencies that administer grants and cooperative  agreements, COFAR includes a senior policy official from one other  agency, selected by OMB, to serve a 2-year term (see fig. 3).
In a 2013 report, we found that COFAR had not released to the public an  implementation schedule that included key elements such as  performance targets, mechanisms to monitor, evaluate, report on  progress made toward stated priorities, and council members who can be  held accountable for those priorities. We recommended that the director  of OMB, in collaboration with the members of COFAR, develop and make  publicly available an implementation schedule that includes performance  targets, council members who can be held accountable for priorities, and  mechanisms to monitor, evaluate, and report on results.
section_title: The Extent to Which Selected Subagencies Followed Certain Required and Recommended Practices for Evaluating Competitive Grant Awards Varied
subsections: section_title: Most Selected Subagencies Included Evaluation Criteria and Related Scoring in Their Merit-Review Process, but the Selected Interior Subagencies Did Not
paragraphs: The Uniform Guidance gives agencies flexibility to design their merit- review process but states that all criteria used to influence final award  decisions should be clarified in the public notice for applicants, and public  notices should include the relative weights the agency will apply to these  criteria. The public notices for the programs we reviewed in four of six  subagencies included merit-based criteria for evaluating applications and  the related maximum point values to be applied to these criteria. We  found that common review criteria at these four selected subagencies  included the merit of the project design, previous organizational  experience with the type of program, and whether the financial and  budget support seemed appropriate. For example at USDA, NIFA’s  Hispanic Serving Institutions Education Programs and the three FNS  programs we reviewed clearly articulated the review criteria and related  point values in the public notices. At NIH, all four research grant  programs we reviewed included the same general criteria in their public  notices and the same scoring values. In addition, we found that all three  CDC grant programs included the same general review criteria in their  public notices and clearly articulated the related point values.
However, at the selected Interior subagencies (NPS and FWS), we found  several public notices in which the criteria for evaluating applications or  the related point values for each criterion were not clearly stated. One of  the three public notices for grant programs we reviewed from NPS did not  inform the applicants of the review criteria or their related weights.  Specifically, we found in our review that the public notice for NPS’s  Historic Preservation Fund Grants to Underrepresented Communities  (HPF) requested standard grant application information from applicants,  but it did not include the evaluation criteria or the related points. NPS  officials explained, and we confirmed, that this had been corrected in the  public notice for HPF fiscal year 2016 grants, which included both the  criteria and scoring. Further, two of the three public notices from FWS did  not inform applicants of weights related to each criterion used to evaluate  grant applications. Specifically, FWS’s Aquatic Invasive Species (AIS)  grant program clearly identified the criteria by which applicants would be  evaluated in the public notice. However, the AIS program public notice did  not include maximum point values related to each criterion. Similarly,  FWS’s Conservation Program to Introduce Youth to Natural Resource  Conservation included all review criteria within the public notice, but it did  not include the related weights of the evaluation criteria. The program  staff agreed that the criteria point values should have been explained to  the applicants in the public notice, and they said the point values would  be included in the grant public notice for subsequent years. Unless the  criteria and value that will be assigned to those criteria are made  transparent to the applicant before an application is submitted, the  applicant may not know whether their proposal will meet the review  criteria or how to best focus their efforts. Additionally, applications that  better align with review criteria can facilitate a more effective and efficient  merit-review process for federal awarding agencies.
section_title: Most Selected Subagencies Identified Whether Cost Sharing Is a Factor Affecting Award Decisions, but Selected Interior Subagencies Did Not
paragraphs: The Uniform Guidance also states that if agencies will consider cost  sharing and any other program policy factors that may be used to  determine federal award decisions, these factors must be explicitly  described in the public notice. Under federal research proposals,  voluntary committed cost sharing is not expected. However, it and other  program policy factors may be considered during a merit review if this  factor is explicitly described in the public notice and in accordance with  agency regulations. We determined that four of the six subagencies we  reviewed clearly articulated cost sharing requirements in their public  notices for selected grant programs. For example, the public notices for  all NIH and CDC grant programs in our review stated either that cost  sharing was not required or that it would be used in the grant review  process and described how it would be used. NIFA and FNS clearly  explained cost sharing requirements and how they would be used in the  grant review process.
In contrast, the public notices for grant programs at the two selected  Interior subagencies discussed cost sharing and matching but did not  clarify when or how this factor would influence the subagency’s final grant  award decisions. For example, the public notices for FWS’s AIS grant  stated that the use of matching grant funds was not a requirement.  However, the AIS public notice also encouraged both matching funds and  partnerships to augment project resources and said these factors would  be considered in the applicant ranking process. AIS grant staff told us that  they had planned to use cost sharing or matching only to break tie scores  for applicants, but that it was never used in the evaluation of applicant  proposals since no ties in the scoring occurred. The use of the cost  sharing or matching statement in the public notice—without explanation  for how this factor would be used to evaluate applicants—reduced the  transparency of the grant review process because the way in which this  information was to be assessed was unclear to applicants. The AIS grant  staff told us that language regarding the consideration of cost sharing or  matching had been removed from all subsequent AIS public notices.
Similarly, in our review of the public notice for NPS’s HPF grant program,  we noted that although the grant program did not require cost sharing or  matching from applicants, information on cost sharing or matching funds  was requested in the budget section of the applicants’ grant proposals.  However, no information was provided on how cost sharing or matching  funds would affect the final award decisions. In addition, the HPF grant  reviewer guidance available at the time we reviewed the grant program  instructed the reviewers to include cost sharing as part of their  consideration for the budget criteria, which is scored. Consideration of  cost sharing or matching is also included in the final scoring  spreadsheets, indicating that it was a quantitative factor in the evaluation  process and affected final award decisions. Uncertainty and confusion  about the impact of cost sharing and matching could discourage  applicants from submitting proposals for the HPF grants. The new  guidance NPS issued, which was not available at the time we selected  the HPF program for review, addresses the issue.
section_title: Selected Subagencies Had Processes in Place to Conduct Risk Assessments of Grant Applicants
paragraphs: There are risks associated with grant applicants’ ability to implement the  proposed grant project while also having financial controls in place to  appropriately account for federal funds. For competitive grants, federal  awarding agencies must have a process for assessing the risk posed by  applicants and the process is to be conducted prior to applicants  receiving a grant award. The Uniform Guidance states that federal  awarding agencies may consider the following as they assess applicant  risk: financial stability; quality of management systems; history of  performance; reports and findings from audits; or the applicant’s ability to  implement statutory, regulatory or other requirements imposed on  nonfederal entities. To support this requirement, officials from the six  selected subagencies in our review described various management tools  they use to assess the risk level of their grant applicants, including the  use of internal risk assessment review forms; risk assessment checklists;  and review of OMB-designated repositories of government-wide eligibility  qualification and financial integrity information.
subsections: section_title: Centers for Disease Control and Prevention
paragraphs: CDC officials said that the agency is updating its current risk assessment  framework to implement a more systematic approach that follows the  Uniform Guidance for assigning all grantees a risk score. CDC grant  applicant risk assessments were conducted after award  recommendations were made by the peer review panels. CDC officials  said their grant risk assessments included reviewing internal CDC  databases for grantee history, audit reports, financial data, Single Audit  reports through the Federal Audit Clearinghouse, reports from the System  for Award Management, and internal CDC and HHS agency-wide grant  award history. CDC officials also explained that grant applicants  receiving continuation funding from previously awarded grants receive a  more streamlined risk review using only the Federal Audit Clearinghouse  and System for Award Management reports. CDC officials also noted that  new CDC grant applicants are more likely to be labeled as high- or  medium-risk due to uncertainty regarding their financial and grant  performance history. In addition, CDC grant application reviewers use a  checklist that includes some of the factors for reviewing applicant risk  among other grant award requirements.
section_title: National Institutes of Health
paragraphs: NIH grant staff explained that they use the System for Award  Management and the Federal Awardee Performance and Integrity  Information System to determine if potential exclusions, prior  performance, or business ethics issues exist. In addition, NIH staff said  they used the National External Audit Review to look for negative audit  findings involving applicants, and they document the results of an  applicant’s risk assessment in NIH’s grant management checklist.  Similar to CDC, NIH grant staff review new applicants more closely and  may require them to complete a separate form to assess their financial  systems, according to the staff with whom we spoke.
section_title: Food and Nutrition Service
paragraphs: FNS has a pre-award risk assessment policy that requires applicants to  submit a questionnaire entered into a pre-award assessment tool which  triggers a number of flags that designate the applicant risk levels. FNS  staff said that pre-award risk assessment is a two-part process that  includes analysis of its risk assessment tool and a separate review of the  federal repositories along with other information provided in applicant  forms.
section_title: National Institute of Food and Agriculture
paragraphs: According to NIFA officials, all grant programs at NIFA have risk  assessments that are conducted through the subagency’s Awards  Management Division (AMD). AMD staff told us they use a risk  assessment form to request an applicant’s financial information for the  previous 2 years, articles of incorporation, subsidiaries and all other  affiliations. AMD staff explained that they assess risk levels for all  applicants and when they determine an applicant to have a high risk level,  grant funds are restricted or may not be awarded to the applicant.
section_title: Fish and Wildlife Service
paragraphs: FWS officials said that a risk assessment must be performed for every  applicant that receives a grant award. The risk assessment results are  categorized using a table with descriptions of low, medium, and high risk  levels that determine related grant monitoring activities. According to  FWS risk assessment guidance, if a grantee receives a final high risk  level or there are other concerns, the grantee may receive more frequent  monitoring and site visits may be required if the program determines it  should be a condition of the award. FWS officials also explained that  some FWS grant programs conduct the risk assessments in the initial  screening process and other grant programs conduct them closer to the  decision for grant awards because the flexibility allows the program to  apply the assessment when they determine it is necessary. FWS officials  said that changes are being made to their fiscal year 2017 risk  assessment process, which will require an enhanced assessment of  recipient financial recordkeeping capabilities and additional review of  Single Audit and other publicly available information.
section_title: National Park Service
paragraphs: In early 2016, NPS established procedures for assessing an applicant’s  financial risk by making the grant program awarding officer responsible  for risk assessments and giving that awarding officer the flexibility to use  a variety of tools for assessing applicant risk. Based on the pre-award  risk assessment, the awarding officer must assign the recipient a risk  rating of high, moderate, or low. High risk designations made by the  awarding officer must include the rationale and any specific conditions  imposed on the grantee. According to officials, NPS must approve the  high risk designation and the awarding officer must send out a written  notice to the recipient stating the reason and actions needed to remove  the applicant from the high risk designation list. Like FWS, NPS officials  explained that they are making the same changes to their fiscal year 2017  risk assessment process because the Department of the Interior will be  revising its agency-wide risk assessment policy.
section_title: Most Selected Subagencies Did Not Have Formal Approaches to Identify Potentially Duplicative or Overlapping Grant Funding
paragraphs: Two of the selected subagencies in our review have guidance in place  instructing grant management staff to review applicants’ other funding for  potential duplication and overlap prior to making a grant award. In  contrast, the other four selected agencies relied on informal mechanisms  to identify potential duplication and overlap in applicants’ grant funding.  While OMB’s Uniform Guidance does not direct agencies to review  applicants for duplicative or overlapping funding, federal standards for  internal control state that management should use quality information to  achieve objectives, including relevant data from reliable internal and  external sources. Internal control standards also state that management  should document its policies. To the extent that grant-making agencies  have as an objective that their awards are not overlapping or  duplicative—or otherwise acknowledge that identifying unnecessary  duplicative or overlapping grant funding supports effective stewardship of  federal grant dollars—these agencies would benefit from consistent  approaches to collecting this data and from documenting these  approaches in agency policy.
We did not identify any instances of overlap or duplication at the grant  award level in our review of the 19 grant programs (that is the applicant receiving funding for the same or similar work). However, our previous  work has pointed to potential risks that can arise—such as awarding  duplicative grants—when agencies do not have written guidance in place  to direct staff to check for duplication when making competitive award  decisions. For the four subagencies that we found did not have formal  approaches to identifying overlapping or duplicative grant funding,  developing guidance for this purpose would help mitigate the potential  risks we previously identified.
subsections: section_title: Two Selected Subagencies Had Guidance and a Formal Process to Identify Potential Duplication and Overlap of Grant Funding
paragraphs: We found that two of the selected subagencies in our review, NIH within  HHS, and NIFA within USDA, had guidance in place instructing grant  management staff to review applicants for potential duplication and  overlap prior to making a grant award. NIH’s Grants Policy Statement and  “just in time” review process and NIFA’s Federal Assistance Policy Guide  instruct grant managers to review pending grant awards for scientific,  budgetary, and commitment overlap to ensure prior to issuing an award  that potential duplication of the award is addressed. These guidance  documents clearly instruct grant-making staff that duplication and overlap  in the pending grant award, whether scientific, budgetary, or commitment,  is not permitted.
NIH officials explained that they implement their guidance on identifying  duplication and overlap through various review mechanisms. NIH officials  said that prior to making a grant award decision they request information  on active and pending “other support” for all key personnel who would be  receiving the grant funding. “Other support” includes all financial  resources, whether federal, nonfederal, commercial or institutional, that  would be used in direct support of each individual’s research endeavors,  including but not limited to research grants, cooperative agreements,  contracts, and institutional awards. After listing all support, applicants  must also summarize for each individual any potential overlap with active  or pending projects and for the overall application any overlap in terms of  the science, budget items covered, and any individual’s time commitment.
According to NIH officials, the review of the applicant’s “other support”  documentation is recorded in NIH’s grant management and program  checklist, a tool NIH grant managers use to ensure grant applications  meet all requirements. If the research plan in the application duplicates  other pending applications or an active award, the grant applicant must  negotiate with NIH staff concerning which grant will be funded. If NIH staff  conclude partial duplication exists, then modification of the application,  other pending applications, or the active award is necessary before NIH  will make the grant award. Depending on the amount of scientific overlap,  staff might choose not to fund the pending application. If scientific,  budgetary, or commitment overlap has been identified, NIH staff are  required to document concerns along with specific recommendations for  resolution.
NIFA’s grant programs have taken different approaches to implement the  subagency’s guidance regarding identifying duplication and overlap in  grant awards. For example, NIFA’s Agriculture and Food Research  Initiative has its own grant policy manual that offers detailed instructions  on identifying duplication and overlap prior to making a grant award.  Grant managers for the Agriculture and Food Research Initiative review  applicants’ self-identified current and pending support when they apply for  funds. Additionally, NIFA’s grant managers review the Current Research  Information System—USDA’s primary system containing project-level  information on its ongoing and completed research projects—to identify  any other NIFA grants that may have funded the same project. The  program staff log the date of this search and the key words used to  demonstrate how they looked for duplication. Finally, Agriculture and  Food Research Initiative program staff verbally confirm with the grant  applicant that there is no duplication or overlap when they call the  successful applicant to notify them of the award decision.
In contrast to the Agriculture and Food Research Initiative’s grant policy  manual and its implementation of the guidance during the pre-award  review process, officials from the two other selected NIFA grant programs  used other techniques to identify potential duplication and overlap. For  example, officials for NIFA’s Hispanic Serving Institutions grant program  explained they ask whether a grant applicant has submitted a similar  application to another federal agency. If so, the applicant must report it  under “current and pending support,” and prior to making an award  decision, NIFA officials review the key personnel section of the  application to determine if anyone affiliated with the grant application is  being funded at greater than 100 percent (i.e., a review to identify  commitment overlap).
section_title: Four Selected Subagencies Rely Primarily on Informal Processes for Identifying Potential Duplication and Overlap in Grant Funding
paragraphs: Four of the six selected subagencies we reviewed relied on informal  mechanisms to identify duplication and overlap of grant funding rather  than establish guidance for a formal process, but officials from these  subagencies acknowledged the importance of trying to identify potentially  duplicative and overlapping grant funding. For example, officials from  three selected CDC grant programs described informal approaches taken  to look for duplicative funding at the grant award level. While CDC  officials explained that their process used the same grant review tools  and followed the same guidelines as NIH, they acknowledged they did not  use a formal mechanism to identify potential duplication of awards. CDC  officials explained that CDC did not have a methodology to ensure that its  grant awards did not duplicate funding for the same or similar work at the  individual grantee level. According to CDC officials, grant management  staff are responsible for being knowledgeable of their programs and  therefore should know what other funding sources their grantees receive.  These officials explained that for some programs, to address duplication  and overlap grant managers may review other funding sources listed in  the application and try to determine whether any duplication or overlap  could exist.
We found that both selected subagencies within Interior (NPS and FWS)  also lacked formal guidance instructing grant management staff to review  grant applications for potential duplication and overlap at the grant award  level. NPS officials said they lacked a consistent process to assess  potential overlap in funding across different federal agencies or even  across different subagencies within Interior (e.g., between NPS and  FWS). NPS officials acknowledged that such a process could be helpful  to identify potential duplication and overlap across NPS grant programs.  FWS officials explained they did not have an official policy to review grant  applications for duplication and overlap, but it is a common topic that  comes up at pre-award grant panel review meetings. Officials from NPS  also pointed out that grants may intentionally fund the same type of  project in order to provide grant funding to applicants in different  geographical locations. While these officials said it is not likely that  unintended duplication occurs, they acknowledged it is possible that grant  applicants could receive unintended duplicate funding due to the lack of  formal written guidance requiring grant award panels to look for  duplication and overlap of funding sources as part of their reviews.
Within USDA, we found that FNS lacked a formal guidance mechanism  instructing grant management staff to review grant applications for  duplication and overlap. However, grant management staff for the three  selected FNS grant programs explained that an informal review did exist  to identify potential duplication and overlap. Staff for one program  described how they reached out to other grant programs with overlapping  program goals through informal professional working groups in which staff  from different programs meet and share information, including trying to  identify potential duplicate or overlapping grant funding by sharing lists of  potential grantees.
section_title: COFAR Has Updated Its Priorities but Has Made Limited Progress in Planning, Coordination, and Communication
paragraphs: COFAR has made limited progress in developing an implementation  schedule for achieving its priorities, articulating roles and responsibilities  for its council members, and developing a strategy for communicating  with stakeholders as we recommended in 2013. In 2013, we also  evaluated the extent to which COFAR reflected key features of  interagency councils that effectively implement their programs, including  (1) establishing implementation goals and tracking progress toward these  goals, (2) identifying and agreeing on leadership roles and responsibilities  for the council members, and (3) ensuring that all relevant participants are  included. We recommended that the director of OMB, along with  COFAR, develop and make publicly available an implementation  schedule of the COFAR priorities, clarify roles and responsibilities for  COFAR members, and improve efforts to develop an effective two-way  communication strategy with the grant recipient community. OMB  generally concurred with these recommendations.
subsections: section_title: COFAR’s Implementation Schedule Continues to Lack Detail on Achieving Priorities
paragraphs: In our 2013 report, we found that COFAR needed to establish an  implementation schedule and track progress toward priorities to help  pinpoint performance shortfalls and suggest midcourse corrections,  including any needed adjustments to future priorities and milestones. In  February 2013, COFAR posted its original priorities for fiscal years 2013  through 2015 to the U.S. Chief Financial Officers Council website.  These priorities were revised and reposted in December 2013. According  to OMB staff, the priorities were developed through a series of COFAR  meetings to ensure that the priorities reflected the way grants  management issues should be framed. OMB staff told us that the  priorities for fiscal years 2016 through 2017 remain largely unchanged  from those for fiscal years 2013 through 2015 since COFAR has a  multiyear focus. COFAR’s publicly stated priorities are shown in figure 4.  The most significant changes were the elimination of “validated public  financial data” from COFAR’s priorities for fiscal years 2013 through 2015  and the addition of “spending transparency” as a new priority for fiscal  years 2016 through 2017. To address each priority, COFAR identified  challenges, accomplishments and short- and long-term deliverables to  show the implementation status of each priority in its priority document.
Although COFAR released its updated priorities for fiscal years 2016  through 2017, it continues to face the same challenges that we identified  in our 2013 report. As of September 2016, COFAR had not yet released  to the public an implementation schedule that includes key elements such  as performance targets, mechanisms to monitor, evaluate, and report on  progress made toward stated priorities, and council members who can be  held accountable for those priorities. For example, in the workforce  development priority, COFAR reported finalizing and publishing a “Grants  101” course outline and content of several modules for the federal  workforce as an accomplishment and short-term deliverable. Although  COFAR developed and implemented the first three online training course  modules, a mechanism does not exist to determine the extent to which  the courses are used. According to OMB staff, they have not conducted a  survey for users of the training, although they reported having received  favorable feedback from some users.
We have found that agencies engaged in collaborative efforts need to  create the means to monitor and evaluate their efforts to better identify  areas for improvement. Reporting on these activities can help decision  makers, as well as stakeholders, to obtain feedback for improving both  policy and operational effectiveness. In our 2013 report, we  recommended that the Director of OMB, in collaboration with the  members of COFAR, develop and make publicly available an  implementation schedule that includes performance targets, council  members who can be held accountable for priorities, and mechanisms to  monitor, evaluate, and report on results. OMB generally concurred with  our recommendation. We continue to believe that implementing our  2013 recommendation and developing a detailed implementation  schedule can help ensure progress toward COFAR’s priorities.
section_title: COFAR Member Roles and Responsibilities Remain Undefined
paragraphs: In 2012, we 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. In our previous work, we have found that  agencies involved in grants management reforms are not always clear on  their roles and responsibilities which may cause such initiatives to  languish. In 2013, we reported that COFAR lacked clearly articulated  roles and responsibilities for its members. We recommended that the  Director of OMB, in collaboration with the members of COFAR, clarify the  roles and responsibilities for various streamlining initiatives and steps for  decision making, in particular how COFAR would engage with relevant  grant-making agency stakeholders and use agency resources. In  response, OMB staff acknowledged that more needed to be done to  clarify roles and responsibilities. As of September 2016, OMB could not  provide us with any statement identifying or documentation supporting the  various roles and responsibilities of the COFAR members. According to  OMB staff, COFAR is an executive group designed to provide agencies  with a forum to make recommendations to OMB to guide federal grant- making policy. Further, OMB staff told us that OMB does not prescribe  what their roles and responsibilities will be as COFAR members. We  continue to believe that implementing our 2013 recommendation and  defining roles and responsibilities of COFAR members can help enhance  cooperation.
section_title: COFAR’s Two-Way Communication Efforts Continue to Exclude Certain Grantee Stakeholders
paragraphs: In 2012, we reported that failure to effectively engage with stakeholders to  understand and address their views can undermine or derail an initiative.  To that end, it is critical that agencies identify who the relevant  stakeholders are and develop a two-way strategy for communicating with  stakeholders. According to OMB staff, COFAR and the Financial  Assistance Committee for E-Gov (FACE) provide a two-way  communication mechanism with the entire grant-making community to  engage in interactions on policy, grant-making, operational, and technical  issues. OMB staff said FACE was formed in 2011 after the creation of  COFAR and allows grant-making agencies to raise issues to COFAR.  However, limited information is publicly available about FACE. According  to a General Services Administration website, FACE is a functional  community group dedicated to addressing the needs of the federal  financial assistance community as it relates to collection, usage,  dissemination, and display of federal financial assistance data.
We interviewed officials from associations representing the grantee  community, state and local governments, universities, and nonprofit  recipients about their two-way communication with COFAR or FACE.  Selected association officials we interviewed reported that they had  interactions with OMB but did not interact directly with COFAR or FACE  and were generally not familiar with FACE as a viable option for these  associations to communicate with COFAR. Officials from two of the  associations we interviewed said that in meeting with OMB staff about  their grant-related issues, they were told that concerns raised to OMB  would be brought to COFAR to be addressed. This raised concern for  some association officials because they did not believe issues that were  unique to their members and the grantee community were being raised  and adequately represented to COFAR. For example, an association  official raised concerns that since the National Science Foundation  rotated off COFAR, the research community’s perspective was no longer  being represented in terms of grant policy, and the research community  would be better served if they were able to communicate directly to  COFAR and not through OMB.
In our 2013 report, we recommended that the Director of OMB, in  collaboration with the members of COFAR, improve efforts to develop an  effective two-way communication strategy that includes the grant recipient  community, smaller grant-making agencies that are not members of  COFAR, and other entities involved with grants management policy. OMB  agreed with our recommendation that it needed to work with COFAR to  develop an effective two-way communication strategy that includes the  grant recipient community. According to OMB staff they now  communicate with nonfederal entities primarily through webcasts on best  practices, by participating in conferences, and by making presentations at  various nonfederal organizations about implementation of the Uniform  Guidance. We continue to believe that fully implementing our 2013  recommendation can help improve effective two-way communication.
section_title: Conclusions
paragraphs: The more than $600 billion in federal grants to state and local  governments made in fiscal year 2015 address diverse national  objectives. Achievement of these objectives is in part dependent on  effective implementation of merit-based processes for grantee selection.  The importance of a fair and transparent process to review grant  applications and appropriately assess grantee risk is essential to make  competitive award decisions. The merit-review process for competitive  grants can take different forms such as internal agency review or external  peer review panels. The Uniform Guidance establishes requirements and  guidelines that offer some opportunities to standardize the review process  as well as the risk assessment framework agencies apply to grantees  prior to making an award.
Our review determined that selected subagencies all had merit-review  processes in place for competitive awards and all had risk assessment  processes established to identify potential grantee risks related to their  ability to implement the proposed grant project while also having  appropriate financial controls in place to appropriately account for federal  funds. However, we found that not all subagencies identified in their  public notices the merit selection criteria they would use, the weighted  values that would be applied to those criteria, or how cost sharing would  be considered, limiting the transparency of the application and review  process for both the applicant and the reviewing agency. Similarly, review  processes at two subagencies routinely incorporated a check for  duplication and overlap at the grant award level—a useful tool to promote  stronger oversight of federal grant dollars. The other four subagencies  took a less formal approach to identifying potential duplication or award  overlap, although they acknowledged the importance of having  information about applicants’ other funding sources, if any. Requiring  reviews for duplicative or overlapping awards and establishing the  requirement in agency guidance would promote stronger controls to  ensure federal grant funds are efficiently awarded and avoid potential  duplication or overlap when necessary.
In 2013, we identified certain challenges related to COFAR’s priorities  and its lack of an implementation schedule. We recommended that OMB  make publicly available a detailed implementation schedule for COFAR,  clarify the roles and responsibilities of COFAR members, and develop an  effective two-way communication strategy with relevant stakeholders.  COFAR continues to lack a publicly available detailed implementation  schedule and a method to evaluate and monitor its progress toward its  priorities. The absence of assigned roles and responsibilities for COFAR  members and a means to include all grantee stakeholder communities in  grant policy development indicate that action is still needed to fully  implement our prior recommendations. Implementing these  recommendations would help ensure transparency and open  communication with the public, federal agencies, and grantee  stakeholders.
section_title: Recommendations for Executive Action
paragraphs: 1.  To improve transparency in the grant merit-review process, we  recommend that the Secretary of the Department of the Interior direct  the Fish and Wildlife Service to issue written guidance to require all  competitive grant programs to clarify in the public notice of funding  opportunity all review criteria, including cost sharing factors as  relevant, and their related scores to be used to make final award  decisions.  2.  To reduce the risk of duplicative and overlapping funding at the grant  award level, we recommend that the Secretary of the Department of  the Interior direct the National Park Service and the Fish and Wildlife  Service to issue written guidance that ensures their grant  management staff review grant applications for potential duplication  and overlap before awarding their competitive grants and cooperative  agreements.  3.  To reduce the risk of duplicative and overlapping funding at the grant  award level, we recommend that the Secretary of Agriculture direct  the Food and Nutrition Service to issue written guidance that ensures  its grant management staff review grant applications for potential  duplication and overlap before awarding competitive grants and  cooperative agreements.  4.  To reduce the risk of duplicative and overlapping funding at the grant  award level, we recommend that the Secretary of Health and Human  Services direct the Centers for Disease Control and Prevention to  issue written guidance that ensures its grant management staff review  grant applications for potential duplication and overlap before  awarding competitive grants and cooperative agreements.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Office of Management and  Budget and the Departments of Health and Human Services, the Interior,  and Agriculture for review and comment. HHS provided a written  response and its letter is reprinted in appendix II.  The other agencies  provided comments by email or orally.  All the agencies agreed with the  recommendations made to them. Specifically:   In its written comments, HHS stated that CDC will draft guidance to  reduce the potential for duplication or overlap before awarding a grant  or cooperative agreement.
After reviewing the draft report, Interior provided oral comments and  additional documentation subsequent to the dates of our sample of  grant programs and collection of documentation related to the  programs that established mandatory templates for all NPS grant  public notices. The templates, as updated in July 2016, require that  the review criteria specify the scoring to be used and clarify whether  and how cost sharing would be considered in evaluating applications.  Consequently, we removed a recommendation regarding NPS’s lack  of written guidance on these matters. An email from Interior’s Audit  Liaison Office also states that Interior agreed to take actions to  address the recommendation we made to NPS and FWS to issue  written guidance that ensures their grant management staff review  grant applications for potential duplication and overlap before  awarding their competitive grants and cooperative agreements.
In an email from the audit coordinator, USDA responded that it agreed  with the recommendation made to FNS and will prepare a statement  of action to address the recommendation when our report is issued.
OMB staff stated in oral comments and in an email that the  recommendations that we made related to COFAR in 2013, and  restate in this report, are not legally required but agreed that to drive  accountability it is important to promote transparency of interagency  councils and for COFAR to continue to provide the public information  about its priorities and progress made.  We continue to believe that  fully implementing our 2013 recommendations—by developing and  making publicly available an implementation schedule of priorities;  defining roles and responsibilities of COFAR members; and improving  effective two-way communication—will enhance the transparency and  accountability of an interagency council.
We are sending copies of this report to the heads of the Departments of  Health and Human Services, Interior, Agriculture and OMB, as well as  interested congressional committees and other interested parties. This  report will also be available at no charge on the GAO website at  http://www.gao.gov.
If you or your staff has any questions about this report, please contact me  at (202) 512-6806 or bawdena@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of our report. Key contributors to this report are listed in appendix III.
section_title: Appendix I: Grant Programs Selected for In-depth Review
paragraphs: Program objectives  To improve the capacity of state and local health  departments, U.S. Territories and Native American  Tribal health agencies to identify, address, and close  domestic drinking water program performance gaps  using performance improvement activities that align  with the 10 Essential Environmental Public Health  Services; improve efficiency and effectiveness of  drinking water programs; and, to identify and reduce  exposures from waterborne contaminants.
To bring public health and epidemiologic principles to  the aid of populations affected by complex  humanitarian emergencies.
To promote optimal and equitable health in women  and infants through public health surveillance,  research, leadership, and partnership to move science  to practice.
To assist public and private nonprofit institutions and  individuals to establish, expand, and improve  biomedical research and research training in  infectious diseases and related areas; to conduct  developmental research; to produce and test research  materials.
To conduct and support laboratory research, clinical  trials, and studies with people that explore health  processes.
To conduct and support laboratory research, clinical  trials, and studies with people that explore health  processes.
To support hypothesis-, design-, technology- or  device-driven research related to the discovery,  design, development, validation, and application of  technologies for biomedical imaging and  bioengineering; to support extramural research funded  by the National Institute of Neurological Disorders and  Stroke; to expand and improve the Small Business  Innovation Research program; to utilize the Small  Business Technology Transfer program; and to  conduct and support laboratory research, clinical  trials, and studies with people that explore health  processes.
Program objectives  To provide technical and financial assistance to other  federal agencies, states, local governments, native  American tribes, nongovernmental organizations,  citizen groups, and land owners on the conservation  and management of fish and wildlife resources,  including minimizing the establishment, spread, and  impact of aquatic invasive species.
Interior/Fish and Wildlife Service   To provide experiential, education, and employment  program opportunities for youth of all ages to  participate in conservation activities conducted by the  Fish and Wildlife Service or in collaboration with other  Interior bureaus.
To support projects complementary to National Park  Service program efforts in resource conservation and  protection, historical preservation, and environmental  sustainability.
To provide matching grants to states for the  identification, evaluation, and protection of historic  properties.
To utilize qualified youth or conservation corps to  carry out appropriate conservation projects that the  Secretary is authorized to carry out under other  authority of law on public lands.
To enhance the nutritional knowledge of Food  Distribution Program on Indian Reservations  participants underserved by the Supplemental  Nutrition Assistance Program-Nutrition Education.
USDA/Food and Nutrition Service  To assist eligible entities, through grants and technical  assistance, in implementing farm to school programs  that improve access to local foods in eligible schools.
USDA/Food and Nutrition Service  To ensure that school nutrition personnel have the  training and tools they need to plan, purchase, and  prepare safe, nutritious, and enjoyable school meals.
To create 30 mathematical model units (5 per grade  level for grades K-5) needed for teacher use in  Department of Defense Education Activity schools  during the remainder of the 2015-16 school year.
To promote and strengthen the ability of Hispanic- Serving Institutions to carry out higher education  programs in the food and agricultural sciences.
To establish a competitive grants program to provide  funding for fundamental and applied research,  extension, and education to address food and  agricultural sciences.
This grant is also funded under Catalog of Federal Domestic Assistance 93.286, 93.853, and 93.865.
section_title: Appendix II: Comments from the Department of Health and Human Services
section_title: Appendix III: GAO Contact and Staff Acknowledgements
subsections: section_title: GAO Contact:
section_title: Staff Acknowledgements:
paragraphs: In addition to the contact named above, Thomas M. James (Assistant  Director), Keith O’Brien (Analyst-in-Charge), Sandra L. Beattie, Crystal  Bernard, Amy Bowser, Steven Flint, Joseph Fread and Michelle Sager  made major contributions to this report. Other key contributors include  Joseph Cook, Donna Miller, John Neumann, Cynthia Saunders, and  Travis Schwartz.