[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]
FEDERAL GRANTS MANAGEMENT: A PROGRESS REPORT ON STREAMLINING AND
SIMPLIFYING THE FEDERAL GRANTS PROCESS
=======================================================================
HEARING
before the
SUBCOMMITTEE ON TECHNOLOGY, INFORMATION
POLICY, INTERGOVERNMENTAL RELATIONS AND
THE CENSUS
of the
COMMITTEE ON
GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
APRIL 29, 2003
__________
Serial No. 108-53
__________
Printed for the use of the Committee on Government Reform
Available via the World Wide Web: http://www.gpo.gov/congress/house
http://www.house.gov/reform
U.S. GOVERNMENT PRINTING OFFICE
89-456 wASHINGTON : 2003
____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512-1800
Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001
COMMITTEE ON GOVERNMENT REFORM
TOM DAVIS, Virginia, Chairman
DAN BURTON, Indiana HENRY A. WAXMAN, California
CHRISTOPHER SHAYS, Connecticut TOM LANTOS, California
ILEANA ROS-LEHTINEN, Florida MAJOR R. OWENS, New York
JOHN M. McHUGH, New York EDOLPHUS TOWNS, New York
JOHN L. MICA, Florida PAUL E. KANJORSKI, Pennsylvania
MARK E. SOUDER, Indiana CAROLYN B. MALONEY, New York
STEVEN C. LaTOURETTE, Ohio ELIJAH E. CUMMINGS, Maryland
DOUG OSE, California DENNIS J. KUCINICH, Ohio
RON LEWIS, Kentucky DANNY K. DAVIS, Illinois
JO ANN DAVIS, Virginia JOHN F. TIERNEY, Massachusetts
TODD RUSSELL PLATTS, Pennsylvania WM. LACY CLAY, Missouri
CHRIS CANNON, Utah DIANE E. WATSON, California
ADAM H. PUTNAM, Florida STEPHEN F. LYNCH, Massachusetts
EDWARD L. SCHROCK, Virginia CHRIS VAN HOLLEN, Maryland
JOHN J. DUNCAN, Jr., Tennessee LINDA T. SANCHEZ, California
JOHN SULLIVAN, Oklahoma C.A. ``DUTCH'' RUPPERSBERGER,
NATHAN DEAL, Georgia Maryland
CANDICE S. MILLER, Michigan ELEANOR HOLMES NORTON, District of
TIM MURPHY, Pennsylvania Columbia
MICHAEL R. TURNER, Ohio JIM COOPER, Tennessee
JOHN R. CARTER, Texas CHRIS BELL, Texas
WILLIAM J. JANKLOW, South Dakota ------
MARSHA BLACKBURN, Tennessee BERNARD SANDERS, Vermont
(Independent)
Peter Sirh, Staff Director
Melissa Wojciak, Deputy Staff Director
Rob Borden, Parliamentarian
Teresa Austin, Chief Clerk
Philip M. Schiliro, Minority Staff Director
Subcommittee on Technology, Information Policy, Intergovernmental
Relations and the Census
ADAM H. PUTNAM, Florida, Chairman
CANDICE S. MILLER, Michigan WM. LACY CLAY, Missouri
DOUG OSE, California DIANE E. WATSON, California
TIM MURPHY, Pennsylvania STEPHEN F. LYNCH, Massachusetts
MICHAEL R. TURNER, Ohio
Ex Officio
TOM DAVIS, Virginia HENRY A. WAXMAN, California
Bob Dix, Staff Director
Scott Klein, Professional Staff Member
Ursula Wojciechowski, Clerk
David McMillen, Minority Professional Staff Member
C O N T E N T S
----------
Page
Hearing held on April 29, 2003................................... 1
Statement of:
Miller, Karen M., president-elect, National Association of
Counties, commissioner, Boone County, MO; Marvin G. Parnes,
executive director of research administration, University
of Michigan; and Kathy Crosby, director of workforce
development, Goodwill Industries International, Inc........ 63
Springer, Linda M., Controller, Office of Federal Financial
Management, Office of Management and Budget; Dr. Ed Sontag,
Assistant Secretary for Administration and Management, U.S.
Department of Health and Human Services Lead Agency for E-
Grants Initiative and Public Law 106-107 Compliance; and
Paul Posner, Managing Director, Federal Budget and
Intergovernmental Relations, U.S. General Accounting Office 8
Letters, statements, etc., submitted for the record by:
Clay, Hon. Wm. Lacy, a Representative in Congress from the
State of Missouri, prepared statement of................... 94
Crosby, Kathy, director of workforce development, Goodwill
Industries International, Inc., prepared statement of...... 81
Miller, Karen M., president-elect, National Association of
Counties, commissioner, Boone County, MO, prepared
statement of............................................... 66
Parnes, Marvin G., executive director of research
administration, University of Michigan, prepared statement
of......................................................... 73
Posner, Paul, Managing Director, Federal Budget and
Intergovernmental Relations, U.S. General Accounting
Office, prepared statement of.............................. 34
Putnam, Hon. Adam H., a Representative in Congress from the
State of Florida, prepared statement of.................... 4
Sontag, Dr. Ed, Assistant Secretary for Administration and
Management, U.S. Department of Health and Human Services
Lead Agency for E-Grants Initiative and Public Law 106-107
Compliance, prepared statement of.......................... 23
Springer, Linda M., Controller, Office of Federal Financial
Management, Office of Management and Budget, prepared
statement of............................................... 11
FEDERAL GRANTS MANAGEMENT: A PROGRESS REPORT ON STREAMLINING AND
SIMPLIFYING THE FEDERAL GRANTS PROCESS
----------
TUESDAY, APRIL 29, 2003
House of Representatives,
Subcommittee on Technology, Information Policy,
Intergovernmental Relations and the Census,
Committee on Government Reform,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
room 2203, Rayburn The Capitol, Hon. Adam Putnam (chairman of
the subcommittee) presiding.
Present: Representatives Miller of Michigan and Watson.
Staff present: Bob Dix, staff director; John Hambel, senior
counsel; Scott Klein, Chip Walker, and Lori Martin,
professional staff members; Ursula Wojciechowski, clerk; David
McMillen, minority professional staff member; and Jean Gosa,
minority assistant clerk.
Mr. Putnam. A quorum being present, this hearing on the
Subcommittee on Technology, Information Policy,
Intergovernmental Relations and the Census will come to order.
Good morning and welcome to today's hearing examining the
efficiency of the Federal grants application, disbursement and
management process.
I flew up this morning, and I pulled out my material for
the hearing and was reviewing some of the testimony, and the
nice lady sitting next to me in a very full flight--we were
very close to one another--looked over my shoulder, and she
said, I notice that you're reading some material on Federal
grants management. I said, ``Yes, ma'am.'' And she said,
``Well, I manage the grants for the Department of Justice for
the Bureau of Judicial Assistance.'' And I said, ``That is kind
of interesting,'' and she proceeded to tell me some of the
problems that she has experienced. And she said, ``What is your
role in all of this?'' And I said, ``Well, I'm a Member of
Congress,'' and she said, ``Well, you're mighty young, aren't
you?'' I said, ``Yes, ma'am, I get that a lot.'' She said,
``Republican or Democrat?'' I said, ``I'm a Republican.'' She
said, ``What a shame.'' I said, ``A shame?'' She said, ``Yes,
quite, what a shame.'' I said, ``OK.''
So that's how my morning was spent. And you can rest
assured that at our next hearing, the Department of Justice
will be present. But you've got to love a country where you're
free to express your opinions.
The Federal Government last year provided State and local
governments with grants totaling more than $350 billion, or 15
percent of our Federal outlays and 3\1/2\ percent of GDP. This
compares to the less than $1 billion sent to the local and
State governments in the 1940's, an amount totaling, at that
time, less than 5 percent of Federal outlays and one half
percent of GDP.
By 2008, State and local governments are projected to
receive more than $480 billion annually from the Federal
Government. The Federal Government also focuses resources on
universities and nonprofits, with some 71,000 grants provided
each year totaling more than $60 billion.
In my former role as a State legislator, we often spoke
around the Statehouse about the role of the Federal moneys and
the role that they played in our own policymaking decisions.
Clearly, the role of Federal Government resources within our
communities is large. Some even may say too large. But by the
same token, service delivery to our citizens cannot and should
not be accomplished solely through programs based in
Washington, DC.
The Federal Government must continue its collaborative
effort as a partner with various grant entities that deliver
services to the American public. The reliance we mutually place
on this partnership, functioning with limiting resources, makes
it more critical than ever that we spend grant moneys wisely,
that we have efficient processes in place to manage that grant
money and that the grants process is transparent and
accessible.
Today we will examine the processes by which States,
localities, universities and not-for-profits discover, apply,
secure and manage more than $410 billion this year alone. The
current system for awarding and administering grants is highly
decentralized, involves thousands of Federal employees, remains
primarily paper-based, and each grant has different statutory,
regulatory, policy and process requirements.
Although there have been many incremental attempts over the
years to streamline this process, more recent grants management
legislative reforms are leading us toward massive changes to
the system, primarily by utilizing technology, combined with a
citizen-centric attitude.
In 1999, Congress passed the Federal Financial Assistance
Management Improvement Act with the intent to improve the
effectiveness and performance of Federal grant programs,
simplify the application and reporting requirements, improve
the delivery of services to the public and facilitate greater
coordination among the delivering services. Of course, the
devil is in the details and the execution.
Between 1999 and 2001, our 26 Federal grantmaking agencies
joined together, led by the Department of Health and Human
Services, to develop the core of a plan that improved grants
management as envisioned by Congress. That plan, in compliance
with the new law, cut across all Federal agencies, focused on
efficiency and openness for all by utilizing technology, and
requires common applications in reporting by all agencies. This
massive effort formed the basis of what we now know as E-
Grants, a top priority E-Government initiative followed closely
by the President through his President's Management Agenda. The
E-government Act of 2002 further enhanced the tools available
to the Federal Government to make E-Grants technology-based
solutions work, including such provisions as authorizing
electronic signatures and addressing internal data sharing
between agencies.
Today we'll take a close look at the ways we have been
conducting business, both past and present, with the goal of
making sure all of our recent legislative and technology-based
solutions are on the right track and meet the desired mutual
goals. In that light, I hope we will be able to accomplish
several things at this hearing.
We need to determine if we are on course with full
compliance with the Federal Financial Assistance Management Act
of 1999. We need to make sure that E-Grant solution provides a
complete and amenable solution to all stakeholders. We need to
assure that we are getting full cooperation across all
agencies, as well as coordinating with the grantee community on
all improvements, or changes--I guess improvements are in the
eye of the beholder. We need to make sure adequate resources
are on the table from each grantmaking agency, as well as make
sure we are promoting a productive climate that rewards change-
agents and a citizen-centric culture within agency leadership.
We hope to determine if further legislative action or
housekeeping legislation is required to keep the process on
track, and take a fresh look at the additional benefits derived
from a unified grants management system with an eye on
utilizing this system to improve post-award accountability,
improve internal analysis capabilities, reduce duplicative
Federal programs and reduce the number of required printed
reports on grants that can be derived in realtime based on the
resulting unified data base.
The Federal Financial Assistance Management Act has an 8-
year timeline. We are at an appropriate half-way point to
evaluate all of the moving pieces, make sure we are headed in
the right and same direction with this effort and ensure our
laws and regulations continue to allow us to succeed in this
enormously valuable national State and local partnership.
[The prepared statement of Hon. Adam H. Putnam follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. We are delighted to have a distinguished panel
of witnesses for each of the panels, and I'm pleased to be
joined by the vice chairwoman of the subcommittee, the
gentlelady from Michigan, who has some hometown folks here who
are participating in this panel as well. So with that, I'll
recognize Mrs. Miller for her opening remarks.
Mrs. Miller of Michigan. Thank you, Mr. Chairman. I think
this mic has a life of its own here, but I probably don't need
it.
And your day started off on an airplane with some
conversation from a lady. My day started off buying a $22 pair
of eyeglasses at CVS this morning, so we'll see how they work.
I certainly want to thank all the witnesses, including
those that are coming from Michigan to testify before the
subcommittee. I certainly look forward to hearing what all of
you have to say there.
The E-Grants Initiative that was outlined in the
President's Agenda E-Government Component, is an example of how
the Federal Government can effectively use technology to
decrease costs and to improve services.
So it is certainly vital that this initiative be
implemented swiftly and with a high degree of success, and with
the amount of reform that presents itself within the Federal
realm, successful implementation of the E-Grants Program can
act as a model as this subcommittee examines measures to
increase the use of and effectiveness of technology.
And with the passage of the E-Government Act of 2002, there
is now a legal authority to ensure the development of E-
Government Initiatives, including E-Grants, but legal authority
does not guarantee success, as has been seen by many reform
initiatives of the past.
So I'm pleased that there are so many distinguished
individuals who are familiar with the user side of Federal
grant programs that have taken the time to testify before us
today. Successful reform is not possible without the input of
those who are actually utilizing the programs, of course.
Currently there are 26 agencies in the Federal structure
who are distributing over 210,000 awards. Needless to say,
there is obviously redundancy, and some unnecessary waste as
well, between the differing agencies who are administering the
grants, with similar objectives, and waste within agencies who
allocate grants spanning different programs.
The implementation of E-Government can be a very good thing
if done correctly, but the Federal Government is currently
finding itself in a situation sometimes where each agency has
set up its own electronic application, its own reporting
processes, and this has complicated matters for groups looking
to obtain Federal grants. And though this may cause some
problems, the mere fact that agencies are really trying to work
together now to simplify the grantmaking process, I think, is
extremely promising. So I look forward to working with the
members of this subcommittee and the Government Reform
Committee as a whole and certainly the groups and individuals
who use these grants, including many of my constituencies, to
improve the Federal grantmaking process as well.
Thank you, Mr. Chairman. I'm certainly looking forward to
hearing the testimony today.
Mr. Putnam. Thank you. Our first panel of witnesses are
experienced with congressional testimony. You understand the
light system and the timing system. So we'll get right to it.
Please rise, and we'll do the oath.
[Witnesses sworn.]
Mr. Putnam. Note for the record that the witnesses
responded in the affirmative.
And we will begin with our first witness, Ms. Springer.
Linda Springer, on March 31, the Senate confirmed the
President's selection of Linda M. Springer as Controller of the
Office of Federal Financial Management within OMB.
Prior to her appointment, Ms. Springer served as Counselor
to the Deputy Director for Management at OMB. I was most
impressed by the remarks she made to our colleagues on the
Government Efficiency Subcommittee several weeks ago expressing
her priority to further standardize and automate financial
transactions and improve our ability to manage and account for
resources more wisely using IT. This will be especially
important in managing Federal grants.
I believe this marks the first subcommittee hearing we've
had without Mr. Foreman, and you are a welcome addition to our
hearing, so please proceed.
STATEMENTS OF LINDA M. SPRINGER, CONTROLLER, OFFICE OF FEDERAL
FINANCIAL MANAGEMENT, OFFICE OF MANAGEMENT AND BUDGET; DR. ED
SONTAG, ASSISTANT SECRETARY FOR ADMINISTRATION AND MANAGEMENT,
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES LEAD AGENCY FOR E-
GRANTS INITIATIVE AND PUBLIC LAW 106-107 COMPLIANCE; AND PAUL
POSNER, MANAGING DIRECTOR, FEDERAL BUDGET AND INTERGOVERNMENTAL
RELATIONS, U.S. GENERAL ACCOUNTING OFFICE
Ms. Springer. Thank you, Mr. Chairman.
I am pleased to testify before the subcommittee today on
the status of our efforts to implement the Federal Financial
Assistant Management Improvement Act, and that act requires the
Office of Management and Budget to direct, coordinate and
assist Federal agencies in establishing a common application
and reporting system and an interagency process for addressing
the grant streamlining work.
As you noted, Mr. Chairman, the Federal grants account for
nearly $400 billion in fiscal year 2003 alone, and that is over
20 percent of the overall government budgeted outlays. So it is
a very significant activity.
Annually, the Federal Government makes over 218,000 awards
under 600 different programs administered by the 26 Federal
agencies. The grantee community ranges from sophisticated
entities with state-of-the-art technology to small rural
organizations that may not even have computer access. The
agencies use a variety of administrative processes and
requirements both governmentwide and agency-specific to support
the grants life cycle and provide foundation for agency and
recipient compliance with laws, regulations, requirements
including fiscal accountability.
There are significant opportunities to reduce these
variations and thereby meet the purposes of the act. To
shepherd the implementation of the act, we've been operating
with four interagency simplification work groups: Pre-award,
post-award, audit oversight and electronic processing as well
as a policy and oversight team. Additionally, under the
President's Management Agenda's Expanded E-Government
Initiative, the E-Grants Project is underway addressing the
work of the former Grants Management Council Electronic
Processing Work Group, and the HHS agency is the lead for E-
Grants. And you'll hear more about that today from Ed Sontag.
Interagency work is focused on various process improvements
and administrative changes that will make it easier for
recipients to identify, apply for and manage the programs
funded by the Federal Government. In accordance with the
requirements of the act, agencies have consulted with non-
Federal constituencies via several actions, including a unique
electronic mailbox to accept public comments on the grants
streamlining effort and posting invitations to comment on
several agencies' grant-related Web sites. Those have been very
active and have been a tremendous resource to us as we've
continued this effort.
The initial plan to implement the act was prepared jointly
by the 26 Federal grantmaking agencies and submitted to OMB and
the Congress in mid-May 2001. Last summer each agency submitted
its update to OMB and the Congress, and we presented our annual
report. This year's progress report is due to OMB and Congress
no later than the end of August 2003. What I'm about to give
you is a flavor of what we'll report at that time.
Every work group has access to the full set of comments
that have come in, and that has been factored into the
decisions about streamlining and simplification. The public and
grantee community have continued to be involved via conference
presentations, media news releases, information available on
grants-related Web sites and the formal 60-day comment period
of each of our Federal Register proposals. We've made every
effort to make sure all stakeholders have the opportunity to
provide substance and comments that will be taken into account
before anything is made final.
In the Pre-Award Work Group, we are dealing with standard
formats for announcements and funding opportunities. A standard
format was proposed last August with an associative policy
directive. We've received favorable public comments, and we
expect to have the standard announcement finalized soon.
FedBizOpps is an initiative to establish a central Internet
source for agency announcements to make it easier for potential
applicants to learn about announcements of funding
opportunities. OMB circulated the final data elements for this
FedBizOpps synopses to agencies again this month and expects to
issue data standards very soon.
Grant applications: This effort has three initiatives
related to establishing governmentwide data standards, creating
an electronic portal and a single assurance statement that
would show compliance with the award terms. Again this month
OMB published in the Federal Register a notice proposing those
standard data elements for both electronic and paper
applications, and that will eliminate two of the current forms.
We expect comments back by June, after which we'll finalize
that data standard.
Standard award terms and conditions: The pre-award group
has started to work governmentwide to develop standard terms,
and that would relate to the administrative requirements in the
two current OMB circulars, A-102 and A-110 as well as national
policy requirements. That is work that is ongoing and will be
ongoing through this year.
There is a lot more that you may want to follow-up with me
on, beyond the 5 minutes later on, but there is a fair amount
in the post-award side as well as additional post--beyond the
post-award, general audit oversight and other activities,
similar to the Pre-Award. I can elaborate on those later for
you, but a lot of activity on the OMB side as well as the group
as a whole as far as getting announcements for reducing current
procedures, reducing requirements and simplifying the overall
process.
Overall, we've got good feedback on any of those that we
have published, any of those through the Web site that we've
had forums on, and we'd be happy to report on those in more
detail to you.
Mr. Putnam. Thank you very much, Ms. Springer.
[The prepared statement of Ms. Springer follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. Our next witness is Dr. Ed Sontag. Dr. Sontag
has been Assistant Secretary for Administration and Management
at the Department of Health and Human Services since October
2001. In that role he serves as the top adviser to Secretary
Tommy Thompson on all major department management issues
including grants management. With HHS managing more than a
third of all Federal grant funds distributed, Dr. Sontag and
his staff have been directed by the President and OMB to lead
the E-Grants effort and ensure compliance with the Federal
Financial Assistance Management Act.
Welcome.
Mr. Sontag. Good morning, Mr. Chairman, members of the
subcommittee. I'm pleased to be here today to testify on what I
think is a good news story, on our progress in improving the
Federal grant process.
The Federal Financial Assistance Management Improvement Act
of 1999 is clearly watershed legislation. It not only provides
the mandate but the impetus for Federal agencies to improve the
efficiency and effectiveness of the Federal financial
assistance process. I'm here today to share with you how we are
implementing this legislation and how the E-Grants Initiative
is transforming the grant environment to the benefit of the
citizenry of this country in support of President Bush's
Management Agenda and Public Law 106-107.
The President's Management Agenda is instrumental in
achieving the reform that is citizen-centered and focused on
delivering results that matter to the American public. To that
end, implementation of E-Grants will revolutionize the way in
which the Federal Government provides customer services to the
public through improved accessibility, transparency, delivery,
coordination throughout the grant life cycle.
The Department of Health and Human Services has
demonstrated leadership in cross-government efforts to fulfill
these mandates, including serving as the managing partner for
the E-Grants Initiative.
With me today, in case there are any difficult and complex
questions, is Mr. Charles Havekost, the Director of our E-
Grants Initiative, and Mr. Mark Weisman, who is the Director of
our Grants Program and the Cochair of our Public Law 106-107
effort.
Both of these managers report directly to me, thus ensuring
a common thread of leadership and accountability throughout our
efforts. The E-Grants Initiative became the vehicle for
implementing many of the improvements planned under 106-107. E-
Grants will create a unified electronic storefront for
interactions between the grant applicants and recipients
conducting business with Federal grantmaking agencies.
Grants.gov will simplify the process of finding information
on Federal grant opportunities, which will produce significant
benefits for, in particular, smaller applications and those
that are novice grant applicants.
HHS is reaching out to all of the Federal grantmaking
agencies. We have initiated pilot programs, conducted hands-on
training and are making ourselves available as a resource to
agencies planning for the full implementation of E-Grants.
The E-Grants Initiative has been, and continues to be,
vigorous in its outreach and collaboration with groups such as
the National Association of State Auditors, Controllers and
Treasurers, National Association of Counties, National Council
of American Indians, University Members of the Federal
Demonstration Partnership, the National Council of University
Research Administrators.
The first, and probably the most significant, benefit of
the E-Grants Program will be the search and find function of
Grants.gov, and in the past organizations and members of the
public seeking Federal grant assistance were made to suffer the
burden of laborious searches through dozens of Federal agencies
and multiple publications. The find functions of Grants.gov
will solve this problem by providing one central clearinghouse
for all information on government grants, allowing the public
to search by grant topic, eligibility or funding instrument.
Your constituents can also sign up for e-mail notification
whenever a grant they may be interested in is posted. On
October 1st of this year, applicants will be able to submit
applications electronically through the Grants.gov storefront.
To meet this October 1 date, we've initiated a pilot effort
that will allow grantee participants to submit applications in
an electronic format using standard data elements to
participating agencies. Looking ahead, we are planning for
phase 2 of our initiative, including an emphasis on unifying
and streamlining the management and reporting processes
required of grantees. This will move us further toward our
ultimate vision of a one-stop point of service for the American
public.
HHS has assumed a proactive role in the implementation of
Public Law 106-107 and the E-Grants Initiative at the
department level under Secretary Tommy Thompson's leadership.
Grant funding opportunities are the means by which and
through which outstanding achievements can be realized in many
areas, including but not limited to medical research,
education, public safety and so on. Simplifying the ability to
locate and apply for grants is critical to ensure the
opportunities for future achievements are not missed. President
Bush's Management Agenda requires this, and the American public
deserves this. I appreciate your time and attention. Thank you
for the opportunity to be here this morning.
Mr. Putnam. Thank you, Dr. Sontag.
[The prepared statement of Dr. Sontag follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. I next recognize Paul Posner.
Paul L. Posner is Managing Director for Federal Budget and
Intergovernmental Relations Issues for the U.S. General
Accounting Office. He has testified many times before
congressional committees on Federal budgeting and financing,
performance budgeting and intergovernmental fiscal
relationships. He is also an adjunct professor at Johns Hopkins
and Georgetown Public Policy Graduate Programs, and I
understand is the author of a book that grabbed my attention
titled, The Politics of Unfunded Federal Mandates.
Mr. Posner, you're recognized. Welcome.
Mr. Posner. Thank you, Mr. Chairman. It's a pleasure to be
here.
My testimony will be somewhat different than what you've
heard before. We at GAO have a mandate to evaluate the Federal
Financial Assistance Act by 2005, and we will look forward to
beginning that over the next year and working with a variety of
people in this room. In the meantime, I thought what I would
talk about is the backdrop for the whole system that we're
looking at. In other words, what we've heard so far suggests
some promising and important efforts to simplify and
standardize a system that is inherently fragmented. I thought I
would read to you from an evaluation of the grants system that
I have here which says, ``That the grant system: one, lacks an
adequate means for disseminating grant information; two,
creates a high degree of funding uncertainty; three, fosters
complex and varying application and administrative processes;
four, is fragmented with similar programs administered by
different agencies and with programs too restrictive to meet
State and local needs.''
Now, this sounds very contemporary--like it just came off
of the e-mail this morning. In fact, this was a 1975 report GAO
issued called ``Fundamental Changes Are Needed to Federal
Assistance to State and Local Governments.''
Now, what this says is there are and have been some heroic
efforts at the Federal level and the State and local level to
coordinate a very confusing and complex array of programs that
we have, a myriad of overlapping and duplicative programs. The
coordination that does exist often is done from below.
There is a lot of creativity out there in packaging
programs, but it often takes heroic actions. Simplification and
standardization can help. We need to ally ourselves at the
Federal level with those seeking to try and make comprehensive
program changes, but we also need to keep our focus on the root
cause: This is a Federal assistance system that is inherently
fragmented.
And I wanted to first point to this chart here which shows
that notwithstanding some of the earlier initiatives to block
grants in the early 1980's, the number of categorical grant
programs has grown to roughly 660, where we stand today.
The second chart very briefly shows the composition of
those programs. The top 20 programs comprise 78 percent of the
funds. What is important to look at is the right-hand side of
that chart, that 169 of these grants have less than $5 million
per year available, in other words, less than 1 percent of all
grant funds go through 169 programs.
Now, I don't challenge the creativity of people to use
money in whatever amounts but I think we can all imagine a less
burdensome and costly administrative system to deliver these
kinds of funds.
Now, these problems come home to persistent problems in
performance that GAO has identified in many different areas,
whether it is reports recently on the 50 homelessness programs
in eight Federal agencies, the 23 housing service programs in
four Federal agencies, the 26 food and nutrition programs in
six Federal agencies or the 44 job training programs in nine
agencies, even after the Workforce Investment Act consolidated
a number of them.
I won't go into more detail now, but with the time
permitted we can talk later about some of the problems that
this prompts in service delivery and accountability.
The last point I wanted to talk about was Homeland
Security, because we have seen how important coordination is,
particularly at the local level, to address these new threats
to the Nation. We, in our very well-intentioned way, are
offering a variety of assistance programs that are also
fragmented, complex and difficult to manage.
We have the next chart here that shows the pattern that we
see, even after the reorganization of the Department of
Homeland Security. We have a number of--16 that we count--major
Federal assistance programs that go down to State and local
governments through a variety of conduits, some to States, some
to different State agencies within States, some directly to
local actors like firefighters, law enforcement personnel and
hospitals. Many are very different in the way they distribute
the money. Some are formula based. Some are project grants.
Some have matching requirement. Some don't. Some have
maintenance of effort. Some don't.
There is quite a bit of overlap in activities; 12 of the 16
grants are available, for example, for training, 7 for
equipment, and 8 for exercises. And, again, this is post-DHS
reorganization, and we know, for example, that several of those
programs that aid State and local preparedness are, in fact,
still in different directorates within the department. So we
still have a substantial problem with a fragmented system for
Homeland Security that remains to be addressed, and I think
that is being discussed.
Now, my statement has a number of options that are
available to the Congress to address this in a more fundamental
way. We've blocked grants which consolidate and devolve
authority and consolidated grants which don't necessarily have
to devolve authority. There are models available where grants
can be consolidated while retaining accountability for strong
performance goals and waivers.
The point is to say that these efforts that we are going to
be monitoring are important and somewhat heroic in some ways,
but they take place in the context of a highly fragmented
system. Thank you.
Mr. Putnam. Thank you very much, Mr. Posner.
[The prepared statement of Mr. Posner follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. At this time we will move to questions, and we
will begin with Mrs. Miller.
Mrs. Miller of Michigan. Yes. I think for Ms. Springer, you
were mentioning about the e-public mailbox that you have and
some of the public comments that you get and also the
FedBizOpps, which I wasn't quite sure what that was. Maybe you
could expand on that. But as you mentioned the phrase
``customer service,'' I'm happy to hear people talk about that.
Obviously we can't have that being a novel concept for the
Federal Government or any level of government. It really needs
to be an operative phrase. So we think about the end users in
that.
And as you are getting public comment and these kinds of
things, how are you utilizing that kind of concept? I mean,
they are the end users, right? They are obviously communicating
with you on how they are finding the application process or
perhaps whatever kind of comments they are giving you. Are you
utilizing those kinds of comments in your business planning?
Are you finding any particular trend lines with any of the
public mailbox, the e-public mailbox that is enlightening?
Ms. Springer. Yes, we are. The answer to that is yes, they
are enlightening, yes, we are using them. The comments that we
got are typically focused to the particular initiative. There
are obviously a broad range of initiatives. So that they are
very helpful beyond the general feeling of, ``yeah, this is
great, we need it.'' They are very specific to the initiative.
Every work group has full access to those comments. No
initiative goes out without review fully of all the comments
that come in. Everybody that is involved from the government
side has access to them. They are discussed. They are tested
against the proposals that are coming out and both before any
particular Federal Register announcements, for example, and
then comments that come in on kind of the second wave that
comes in once it is publicly announced in the Federal Register.
And all of those have been helpful. Generally they've been
favorable as well. We find that not only helpful but favorable.
So we take that we're on the right track in most cases.
Mrs. Miller of Michigan. That is unusual. Usually you just
hear the negative comments but not the positive ones.
Can you tell me what the FedBizOpps is?
Ms. Springer. Yes. The FedBizOpps is a portion of the
Internet site for the General Services Administration. We've
established under this E-Grants Project--and Ed could elaborate
further, if I go a little bit astray here--but we've
established a governmentwide E-Find Function within that
FedBizOpps portion. So it's Web-enabling through that GSA
capability, the ability to find information about grants.
Mrs. Miller of Michigan. Thank you, Mr. Chairman.
Mr. Putnam. Thank you, Mrs. Miller. Let me begin my
questions with Mr. Posner.
What, if any, requirements under Public Law 106-107 are not
being addressed currently?
Mr. Posner. Well, this is something we have not yet
evaluated, and as I said, we're positioning ourselves to start
looking at as these changes are actually rolled out. And so we
look forward to looking at the substantial activities that have
taken place and at how different agencies are working with
HHS's leadership to implement the act. But we've we have not
yet looked at that.
Mr. Putnam. Dr. Sontag, are we currently in compliance with
the law?
Mr. Sontag. I believe we are.
I can speak directly to Department of Health and Human
Services. I think not only are we in compliance with the law, I
think we're using it for constant self-evaluation of how we
award grants, of how we can actually streamline them. I know in
our department, which has a history of very independent
agencies we've been using 106-107 process to bring consistency
across our department.
Mr. Putnam. You are also the chairman of the overall task
force coordinating this, aren't you?
Mr. Sontag. No, I'm not.
Mr. Putnam. Ms. Springer, are we fully compliant with the
law?
Ms. Springer. I believe we are in compliance with the law.
One of the things that was in the original report that came in
2001 is a checklist of action steps by year for each calendar
year, and if you go down that list, as I have had opportunity
to do, I find that with the exception primarily of the shift
from the original vision for technology to the E-Grants as that
has emerged under the President's Management Agenda, I was able
to check off the box under every single one of those
activities.
Mr. Putnam. Are all grantmaking entities required to use
the E-Grants process?
Ms. Springer. They are. There are some that are still
moving toward it. So, for example, there is a requirement to
use certain payment systems for making the grants payments and
disbursements. There is one for the Defense Department and two
others that are systems that are specified. Of the 24 main
agencies, all of them have designated which system. Fourteen
have already migrated to it. The other 10 are already in the
process of waiting for changes or in the process of migrating.
So that is an example of compliance, and I would say
activities are in line with the expectations in all those.
Mr. Putnam. What agencies predominantly make up the
smallest 169 grants, those under $5 million? Are they
concentrated in any one particular area?
Mr. Posner. I don't think they are concentrated in any one
particular agency. We could provide you with a list of all
those for the record. A number of them, I believe, are in HHS.
This is something, by the way, that has been a persistent,
perennial issue. Fifteen years ago we reported much the same
finding, so that there are a number of programs that are very
small.
Mr. Putnam. In your review, and I understand that y'all
have a more comprehensive review underway, have you made
observations or come to any conclusions on the proper channel
for these grants? In other words, there are some thoughts of
only distributing Federal moneys to the States and then letting
the States make that next leap? And I'm sure we'll have some
input from the counties later. Or is there any evidence that
shows that it's better directed directly from the Federal
Government to the end user?
Mr. Posner. That is a good question, and it is obviously
one that's very important for the Homeland Security debate.
I think there's a couple of things to consider, and we are
in the process of looking at this.
One is that giving money directly to the State at least
ensures some coordination throughout the State and that there's
some possibility of promoting the kind of collaboration among
local governments within regions. One of the emerging
challenges within Homeland Security is the need to have
governments within a region work together to realize the
economy of scale that the problem requires.
On the other hand, many local governments, let's say, do
not have a completely harmonious relationship with their
States, and the extent to which the problem is concentrated at
the local level, may cause Congress to mandate direct pass-
throughs, like in the education area. Some of those Homeland
Security Grants mandate an 80 percent pass-through to the local
governments. Some there's a variety of things that you can do
to both realize some of the broader State planning advantages
while nonetheless being fairly sure that the money, in fact, is
going to get down to the places where the needs are greatest.
Mr. Putnam. Ms. Springer, do you know how much money the
Federal Government spends in managing the grants process and
what that would be as a percentage of people who contribute to
charity? People, they like to know that 85 percent or 95
percent of what they give to Good Will or the United Way is
spent on providing services. How much does it cost for us to
actually administer 169 different grant programs that are less
than $5 million each?
Ms. Springer. That is a good question. I don't know the
answer, but I will find that out for you. It makes sense to
find that out. I think certain agencies are structured
differently. So, for example, in one agency there may actually
be a grants management function separate and apart for example,
from the CFO's office, and some of the other agencies that are
less grant-intensive, it might all be done out of a CFO shop.
So we could certainly find that out.
Mr. Putnam. I think it's an important thing to know. In
testimony that we'll have from the second panel that I read--I
believe it's from the University of Michigan--they single out
NSF and NIH as being tremendous examples of how things can work
and perhaps others as not being so.
But I think it's important for us to know what it's costing
us to administer these, and at the end of the day, who actually
holds the grantees accountability for those funds being spent?
Is it your job? Is it the agency's job? Is that delegated to
State and local governments? Who actually does that?
Ms. Springer. Well, it's a combination. The agencies are
responsible from an audit standpoint for the awards that are
granted by their agencies. We have the provisions of the Single
Audit Act, for example, that reinforces the effort to make sure
that the money is spent as it is expected to, there is no
fraud, waste or abuse.
Additionally, one of the things we are looking at very
carefully as a result of the Erroneous or Improper Payments Act
of 2002 passed late last year, is grants programs. That is a
portion of that. So that would include grants that are
distributed directly from the Federal Government as well as
those that go to the States and any of those are within the
purview of review from an Erroneous Payments standpoint. So
that would be the responsibility that we would work with the
agencies on.
Additionally, from an overall effectiveness as opposed to
just the fraud or the efficiency of the spending, there's also
analysis of the purpose, are the dollars going to the purpose
that we expect and the program results? One of the things that
the administration is doing--it started with this last budget
cycle--is the program assessment process through the tool
called the PART. And there were a third of the PARTS that are
done this year related to grants programs. So there are several
initiatives, a combination of the agency level, the Single
Audit Act work, as well as the Erroneous Payments and the PART
process that are meant to evaluate effectiveness of the
programs.
Mr. Putnam. I was home doing town hall meetings for the
past 2 weeks over the district work period, and one of the
things that came up very frequently with law enforcement
officials is the amount of time that it takes to receive the
money after having been notified that they've been awarded the
grant, and I suspect that may not be limited to law
enforcement.
What is the average time that transpires between the
awarding of the grant and receiving the money?
Ms. Springer. I don't know the answer to that question,
but, again, I could find that one out. I don't know if anyone
else does.
Mr. Putnam. Mr. Posner, do you know?
Mr. Posner. No. I think it depends on the type of grant and
whether you have a continuous relationship, for example, if you
get the grant annually renewed versus a one-time kind of thing.
There is a lot of variables that enter into that. But I don't
know of a particular number, actually.
Mr. Putnam. Dr. Sontag, one of the concerns that will come
up in the second panel involves the differences between
agencies who deliver grants to a specific institution or entity
versus to a particular individual. Does HHS have a policy on
who the actual grant recipient is, and if so, could you
elaborate on that?
Mr. Sontag. Generally 99 percent of the time our grants go
to agencies. With research grants, there's usually a principal
investigator designated, and in rare cases if that principal
investigator would move locations, the grant sometimes could go
along. But very, very few of our grants are awarded to
individuals.
Now, the exception of that would be training grants,
scholarships and the like.
Mr. Putnam. And, again, we'll get into this deeper in the
second panel, but I wanted you to have an opportunity to
comment on it.
For example, the difference between administering a grant
to a specific university or even university system versus to a
specific researcher who then has the flexibility to adjust the
grant application or adjust the commitments or timelines
without running it through some clearinghouse at the State
university system or within that research facility.
Department of Education, as an example administering grants
to a school district versus an individual teacher or an
individual principal, just as examples.
I understand that a methodology has been developed to
determine the level of resources that each agency can bring to
the table. Can you name some of the agencies that have been
particularly helpful in providing resources and leadership who
have been key players in that process?
Mr. Sontag. In the E-Grant process?
Mr. Putnam. Yes.
Mr. Sontag. Well, certainly within the Department of Health
and Human Services the National Institute of Health is
essentially going to be the major player of consolidating our
E-Grants efforts. The grants dissemination, application
process, etc., will be through essentially a filter at NIH. We
have smaller agencies within the department that have very
small grant programs, and we're working very closely with them
to bring them into the fold.
Mr. Putnam. Now, earlier I asked you if you chaired the
task force, and I may not have been particularly clear. Is it
correct that HHS is taking a lead role in implementing the E-
Grants Program with OMB?
Mr. Sontag. Yes, sir. I'm sorry. I thought you asked me if
I was Chief Financial Officer.
Mr. Putnam. I apologize. I probably did. But I just wanted
to clarify that. So I apologize, for both of our sakes.
One of the key things that runs through these hearings on a
variety of issues but particularly the E-Government Initiatives
is that the obstacles aren't particularly technological in
nature but cultural.
Could the three of you please comment on the cultural or
the human capital personnel management-type challenges that we
face in reforming grants management, beginning with Ms.
Springer.
Ms. Springer. I think that one of the things I have noticed
is that across all of these grantmaking agencies, you have some
initiatives that have started at the agency level. Some
agencies have been slower to respond on their own. So prior to
a governmentwide approach that tries to harmonize and simplify
down to just one approach, you have some agencies that have
just on their own moved ahead.
So you'll have a particular department--I'll mention the
Department of Education, for example--that has advanced its own
initiative. One of the things that we need to do is to
harmonize them back in with other agencies that maybe haven't
done a whole lot. So that is one cultural variation that we
need, and in one case you're trying to move them up to a state-
of-the-art activity and responsiveness. In the other case, they
might view it as a step back. In fact, it isn't. Often we can
leverage off of what they've done, but you do have a very wide
variety, spectrum of existing approaches that we need to
harmonize.
Mr. Putnam. Dr. Sontag.
Mr. Sontag. I'd like to speak to it from two vantage
points.
First from the HHS grant consolidation effort. HHS has had
a history of a very decentralized agency, very independent,
very productive agencies, the National Institute of Health, the
Center for Disease Control, FDA and so on. Their quality and
their independence have made it more difficult to consolidate
grants.
At the same time, we think we can achieve considerable cost
saving to the American public by consolidating essentially the
grant management process at the department level and even at
the agency-head level. We have many more grants offices than we
need. The policies sometimes contradict each other, and we're
working very hard to issue consistent policies across the
department. We've initiated a review of all grant announcements
that come out of the department. To that end, we're looking for
length. We're looking for ease of application. We're looking
for simplicity of language, and we've made I think great
strides.
The same issue, Mr. Charles Havekost administers our E-
Grant Initiative across government. We're finding similar
problems, where agencies have had a history of being very
independent and doing things the correct way according to their
sense to give up data points, give up data cells, information,
is going to be a very complex challenge.
But speaking particularly to 106-107 in the Department of
Health and Human Services, we think we can improve quality of
grants administration and save the American public considerable
dollars.
Mr. Putnam. Mr. Posner.
Mr. Posner. Well, it's always been difficult for agencies
carrying out related programs in different agencies to address
and coordinate. They have different constituencies and
different congressional focuses.
One of the things I would comment on is, there's a
phenomenon that is called ``picket fence federalism'' which
talks about how specialists at each level of government form
alignments with other specialists. Highly specialized and
trained and expert people sometimes get used to dealing with
their counterparts at State and local governments without
looking at the collateral relations they have, either with
related programs or even with their nominal superiors. Very
often mayors are in some ways dealt out of this process, and
that has been a classic problem with the grant system that we
have, which I think it falls in the cultural realm.
The other is the different Federal roles across different
Federal programs. Programs have all different sorts of
positions vis-a-vis the Federal Government's relationships with
nonFederal parties. Sometimes it's devolutionary; sometimes
it's partnerial; sometimes it's highly centralized. The
administrative processes can be standardized, but coordinating
the fundamentals of oversight are going to be different.
Mr. Putnam. What are the penalties for agencies who are not
compliant, whether with the E-Grants portion or 106-107?
Ms. Springer.
Ms. Springer. I'm not aware that the law itself actually
specifies any particular penalties. We expect that the agencies
are going to be compliant. We don't have any reason to think
that they won't be. From the standpoint of penalties, frankly I
haven't considered it to any great degree, because we have
gotten cooperation across the board, and as I mentioned
earlier, we are on track on everything.
In my 4 weeks since I've been confirmed, I haven't come
across penalties I guess is the fair answer.
Mr. Putnam. Maybe that is one way to look at it. But if I
have a blank piece of paper here with Homeland Security,
essentially. We just created it. It's already a mess. We know
that it's going to be heavily driven by a grants process,
because the nature of Homeland Security is that it's not just
here in Washington, DC. It's in EMSs and fire departments and
sheriff's offices.
So you've got a clean slate basically. There's still a
little bit of time to start that one, with the lessons of 100,
200 years of picket fences. So how should we clean that chart
up, now that we have the opportunity to at least make one
department a model without having to deal with the cultural
resistance that's built up over time?
Ms. Springer. I think that what our effort is going to
focus on is the administration. There are two pieces here. I
think there's the administration effort that the act is asking
us to work on. There's also the substance of consolidating
programs, and it strikes me that there are almosts of both
here.
One is just the construction of the programs themselves, to
the extent that you have six or eight different entities
serving similar purposes, that needs to be brought together
from market standpoint. But the administration aspect, which is
within the scope of the act, I think works alongside of that.
So certainly with the administration of it, we can harmonize
that so that there is one way to get to all of those, but the
fact that there remains six different offerings or programs is
something that, I think, is outside the scope of the act but
that we should try and influence.
Mr. Putnam. Hope County, FL, in considering material help
to better prepare my Health Department to deal with a bioterror
attack, do I call HHS for grant money or the Department of
Homeland Security?
Ms. Springer. What we're trying to do with this act is to
have one place that will have all of those listed. At this
point, it looks like it's constructed in a way that you have
all of those, and, I agree with you that it's set up in a way
that's not customer service oriented, if you will. But, again,
the program construction is something that I think we can help
influence. If that's within the scope of this, then that would
be an expansion I think of what we're doing currently.
Mr. Putnam. Mr. Posner, you're an adjunct professor. Get a
little academic on us and tell us how it ought to be.
Mr. Posner. This is where the rubber meets the road. I
think you put your finger on the most important issue here, and
we have urged some kind of consolidation. Just take the first
two boxes on the left. The ODP which was imported from Justice
and FEMA really substantially fund the same things: sometimes
different recipients, but they fund training, exercises,
equipment and the like. They have different rules, different
formulas. Now, they are also in the same department but in
different directorates. At the very least one could look at the
model of consolidating funding streams. It doesn't necessarily
mean you have to go all the way to block grants.
In my statement, I talk about the spectrum. I mean, block
grants have traditionally been a way to consolidate and devolve
authority. You can separate those two things out. You can
consolidate grants like EPA has done with the performance
partnerships and still hold the States or local governments
accountable for results, assuming you can measure and agree on
the goals that you're trying to achieve. Now, we may not be
there yet in Homeland Security. We may not have consensus about
how you measure preparedness, but we know some of the
fundamentals. We know something about training, mutual-aid
agreements, the need for exercises, so we have some sense of
what we want these locals to do, and we have possibly the
foundations to form what EPA calls a performance partnership.
Then the other side of the spectrum is where you accept the
existing system and deal with the pain points on an as-needed
basis, which can be, you know, an expedient certainly better
than nothing in some sense but not the fundamental change I
think that you're pointing to.
Mr. Putnam. Mrs. Miller, I have vastly exceeded my time
allowance. You're recognized for as long as you need.
Mrs. Miller of Michigan. Thanks. Just a couple of quick
questions, Mr. Chairman. I appreciate that.
I'm going to get back to this whole concept of E-Government
and customer service in particular with E-Government. Ms.
Springer was saying it's been 4 weeks since she has been
confirmed. I'm a new Member. I've been here for 4 months, and
I'm not the biggest technology person in the world. In
Congress, we're trying to use our individual Web sites to
assist our constituents. And it's one of the things,
particularly in my district office, my district directors are
saying you cannot believe all these different grants and the
kinds of questions that people are asking in order to access
these different grants and the information.
First point, as you mentioned, is there some way that you
will then be assisting the individual Members of Congress?
We're trying to get our Web site up and going now where we're
interacting at length with CRS for all the different grants. We
sort of are just cannibalizing their site. Do you have a plan
for assisting the individual members in using all this grant
applications as we get organized here?
Mr. Sontag. We have no plan at this point to assist Members
of Congress.
Mrs. Miller of Michigan. Yes. But you can't be doing this
in a vacuum.
Mr. Sontag. The ease of E-Gov is going to allow for the
citizenry of this country to access information. Persons
calling from Polk County or Ann Arbor, MI, looking for
information right now would find it is not just the Federal
agencies dealing with that problem. If it is within HHS, there
would probably be a dozen. If we are successful--and I am
confident that we will be--people will be able to access
accurate, very detailed information on where they should go for
grant information, the application process, etc. That is going
to be the service. Congresswoman Miller, we have made no effort
to strategize this for Congress, but I would be happy to
entertain such a request.
Mrs. Miller of Michigan. We should certainly at a minimum
be able to drive people to a link to these kinds of things. The
questions that we're all getting are what kinds of grants are
available and what is the process.
Perhaps this is not the right question for those of you,
but, just from an infrastructure standpoint, what kind of
challenges are you facing with 26 different agencies as your
architecture, to make the data bases interoperable? I'm sure
you're facing all kinds of challenges with that. It is
interesting listening to Dr. Posner say you are citing these
material weaknesses from 1975 and here we are now trying to get
these agencies to talk to one another.
Mr. Sontag. Speaking for HHS, it gives us enough data base
to work from where we have multiple different servers, delivery
systems, etc. But the process that we outlined on E-grants is
one of the 26 Federal agencies coming together not under HHS's
rubric but under a cooperative venture where we are looking at
every grant program to see how it could fit. I think people
going into this process had been willing to give up, and that's
the only way that it is going to work.
The process we have worked out with OMB to fund the E-
grants initiative is that these 26 agencies are pledged to
contribute X amount of dollars depending on the size of their
grant program. So they are all, in a sense, partners with us.
That has helped us deal with many of the complexities. But I
think many of the technical issues are still ahead of us.
Mrs. Miller of Michigan. Thank you, Mr. Chairman.
Mr. Putnam. Thank you, Mrs. Miller.
A followup question for this panel: Ms. Springer, will all
agencies be required to use the E-Grant system?
Ms. Springer. Yes, they will.
Mr. Putnam. By when?
Ms. Springer. We're looking to--I'm going to defer maybe to
Dr. Sontag on the exact date. The first group is in 2003, end
of 2003 pilot group, and then the final date for the rest is
when?
Mr. Sontag. Is 2004 and 2005.
Ms. Springer. 2004 and 2005.
Mr. Putnam. So they're divided into three groups?
Ms. Springer. I'm not sure if it's three actual dates. I
know it starts in the fall, October 2003. Do you have a
schedule there?
Mr. Sontag. OMB is going to put a policy in place that will
essentially require posting of all announcements through the E-
Gov process that I talked about by October of this year.
Mr. Putnam. All posting will be on-line?
Mr. Sontag. Posting as a grant announcement.
Mr. Putnam. By October 2003?
Ms. Springer. The grant announcement piece of it.
Mr. Putnam. Just an awareness portion. They won't be able
to apply on-line by October, will they?
Ms. Springer. The E-Apply part is the part that will come
second. Over the course of the 2003 to 2005 timeframe, by the
end of 2005, we will have not only the announcements but also
the apply.
Mr. Putnam. Thank you very much.
Any other last comments that this panel would like to make
before we move to panel two? Dr. Sontag.
Mr. Sontag. Just one question, Mr. Putnam. I want to be a
voice for the small grantee. I know in the age of consolidation
large grants are considered to drive much in our country, but
some of the best grants I've ever seen funded have been
$30,000, $40,000, what I call storefront grants to start local
early childhood programs. Whatever we do in consolidation, I
think we should still allow room for what I call the small
grantee.
Mr. Putnam. Any other comments?
Thank you very much, panelists. We appreciate your support.
We will take a 5-minute recess while we set up the second
panel.
[Recess.]
Mr. Putnam. If the second panelists would please take their
seats and then immediately rise again to be sworn in.
I would also ask if there is anyone attending with the
witnesses who will be providing information to the
subcommittee, backup information, ancillary information, to
please rise and also be sworn in.
[Witnesses sworn.]
Mr. Putnam. I would note for the record that the witnesses
responded in the affirmative.
We will get right to our second panel.
We will begin with Karen Miller.
In addition to representing the citizens of Boone County,
MO, as a county commissioner for more than a decade now, Karen
M. Miller joins us as president-elect of the National
Association of Counties. She will take over the presidency in a
few months, where I understand she has already exhibited an
interest in making sure localities across America, including
Boone County, are fully utilizing the Internet to improve
services for citizens and improve intergovernmental alliances.
Allow me also to extend my condolences on behalf of the
entire subcommittee, as I understand your grandmother passed
away last week. Your being here today under these circumstances
exhibits a true commitment to your organization's membership
and goals.
We are delighted to have you here. If you have friends or
family who would like to take a picture of you testifying
before Congress, as humble a congressional gathering as this
is, you are certainly welcome to come around here and do that.
I know that is a pretty neat thing.
Welcome. You are recognized.
STATEMENTS OF KAREN M. MILLER, PRESIDENT-ELECT, NATIONAL
ASSOCIATION OF COUNTIES, COMMISSIONER, BOONE COUNTY, MO; MARVIN
G. PARNES, EXECUTIVE DIRECTOR OF RESEARCH ADMINISTRATION,
UNIVERSITY OF MICHIGAN; AND KATHY CROSBY, DIRECTOR OF WORKFORCE
DEVELOPMENT, GOODWILL INDUSTRIES INTERNATIONAL, INC.
Ms. Miller. Thank you very much, Mr. Chairman.
Good morning, Mr. Chairman and members of the subcommittee.
My name is Karen Miller, and I am a county commissioner in
Boone County, MO. I currently serve as the president-elect of
the National Association of Counties.
NACo, the National Association of Counties, was established
in 1935 and is the only national organization representing
county governments in Washington, DC. Over 2,000 of the 3,066
counties in the United States are members of the National
Association of Counties, and we represent 85 percent of the
population. Federal grants are vitally important to county
budgets, especially in these difficult economic times, so we
thank you for the invitation to appear before you today.
I would like to make three key points on the state of the
Federal grants management system and the progress that was
outlined in the Federal Financial Assistance Management
Improvement Act of 1999: First, local governments, particularly
in rural America, must overcome several obstacles to find and
apply for Federal financial assistance. Second, NACo supports
the streamlining and simplification of financial assistance
programs that has occurred since the passage of the Federal
Financial Assistance Management Improvement Act of 1999. Third,
by using technology, the Federal Government through E-
Government initiatives such as E-Grants could remove the
barriers that local governments experience.
Of those 3,066 counties across the United States, over two-
thirds are considered nonmetropolitan, or rural. Local elected
officials from these counties are at a disadvantage in the
current Federal grants disbursement system for several reasons.
First, many of those counties lack the professional staff
capacity to identify the myriad of Federal grants available. A
2001 NACo study found that only 28 percent of rural counties
have a grant writer on staff. The percent of the rural counties
that employ an economic development professional is only
marginally better at 38 percent. As a result, these local
elected officials are forced to try to become experts in the
Federal grants process themselves. However, county elected
officials are predominantly part-time public servants who must
balance their civic duties with professional responsibilities.
To illustrate this point, NACo quickly surveyed the 47
State associations of counties across the Nation. States with
100 percent part-time county commissioners include Florida,
South Carolina and North Carolina. Additionally, in States that
did have full-time officials, these commissioners were
primarily from the large urban counties.
Small metropolitan and rural county officials can also turn
to their local regional development organization, known locally
as councils of government or regional planning commissions.
These organizations are governed by the local governments they
serve and provide technical assistance in grants management.
According to a survey by the National Association of
Development Organizations, the typical regional development
organization served six counties and 30 municipalities and
administers 11 programs. However, their limited staff capacity,
increasing responsibility and budget cuts have pushed these
organizations to their limits.
Another emerging alternative are various private vendors
that aggregate grant announcements and information into
sophisticated but expensive on-line data bases. However, due to
declining tax bases and difficult budget constraints, these
fee-for-service products remain out of the reach for our rural
counties.
The Federal Financial Assistance Management Improvement Act
of 1999 was passed to ease the burdens of local governments and
other grant seekers while also capitalizing on recent
technological advances. NACo supports the streamlining and
simplification of the Federal grants process and is excited
about the potential of the E-Grants initiative.
I have met with Charlie Havekost, the project manager for
the Department of Health and Human Services, about the
initiative and have been impressed with his willingness to work
with county governments through NACo. Specifically, we would
like to conduct a pilot project with NACo's rural action caucus
which represents about 1,000 rural elected officials
nationwide. The caucus would serve as a sounding board on the
successes and impediments to the E-Grants initiative and would
be able to provide feedback on future improvements.
Additionally, NACo will educate its members on the value of
E-Grants and encourage them to file grants electronically. We
would like to see a universal application for all Federal
grants whereby each Federal agency requires similar
information.
Further, NACo believes that the Federal Government should
develop a Web site and an electronic mailing list for grant
announcements. I feel that there would be a greater awareness
among the local elected officials if such a site list were
available.
In addition, it would be helpful if the Web site and
mailing list could be tailored based on the user's interests
and needs.
In addition, once a grant is identified and the elected
official would like to apply, the E-Grants platform must
recognize the wide disparity of Internet access in urban and
rural America. Unlike urban cities and counties, much of rural
America lacks access to high-speed Internet service.
Consequently, Internet access for many rural communities is
sluggish, dial-up service that may be subject to long distance
telephone rates. Therefore, NACo supports a system that does
not require periods of Internet connectivity.
In conclusion, I believe that the Federal Government can
build on the success of the Federal Financial Assistance
Management Improvement Act and mitigate the challenges
currently facing rural elected officials.
Mr. Posner stated that he thought that grants should go
through the States to be able to do a more regional look and
some continuity, and I concur with that as long as the language
requires money intended for local governments to be spent that
way. As an example, the Federal elections reform that the
Congress so graciously supported, the funds for local elected
officials to support equipment, in our State, our State has
decided that there will be no grants, it will be loans with
interest if we need it, money to replace that equipment. That
was not the intention of the Congress, and so I think that the
language that was in the homeland security bill was much
needed, especially in the times that we are in right now with
all the State problems.
Again, I want to thank you, Mr. Chairman and members of the
committee, for allowing me to appear today and would welcome
any questions you might have. Thank you.
Mr. Putnam. Thank you, Commissioner Miller.
[The prepared statement of Ms. Miller follows:]
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Mr. Putnam. Mr. Parnes is our next witness. He is associate
vice president for research and executive director of research
administration for the University of Michigan, a university
that is particularly good at getting research money. He has
served in that office in some leadership capacity for the past
15 years. As vice president, Mr. Parnes is responsible for
infrastructure, research administration, technology transfer,
liaison with industry and day-to-day oversight of Michigan's
university research units.
I know our vice chair is especially pleased when she has an
opportunity to share the knowledge of wisdom of her fellow
Michigan residents with the subcommittee. Mrs. Miller, would
you like to make any further comments about the distinguished
gentleman?
Mrs. Miller of Michigan. I will just tell you, my father
graduated from U of M. My husband graduated from Michigan State
University. I hope you won't hold that against him, but we have
a constant thing in our family about the two universities.
But I'm so proud of the University of Michigan and the
staff that they have and the kind of product that you've been
churning out for literally generations. It is a national
treasure, quite frankly. I am very pleased to have you here
today.
Mr. Putnam. Welcome.
Mr. Parnes. Thank you, Mr. Chairman and Members. I am
delighted to be able to be here representing universities.
The University of Michigan has done well in the grants
process. Of our $700 million a year in research expenditures,
about $500 million of that is from Federal sources. We talk
about fragmentation. We receive funds, I would say, from
virtually every Federal agency.
On the one hand, it speaks to a rich partnership in which
universities and the Federal Government serve our citizens, but
there is certainly a lot of potential for administrative
complexity, redundancy and waste both for us and the granting
agencies.
We really believe the Federal Financial Assistance
Management Act is certainly outlining what's required. We
applaud the act and the efforts to implement it. We believe,
however, that from our perspective in the universities the pace
has been slow and to date the progress made by most government
agencies for fulfilling the intent appears to us to be minimal
given the aggressive timeframe that has been established.
That's a concern that we have.
We heard about a single product that is really emerging,
which is a pilot standard format for funding opportunity
announcements. That's valuable, and we know there is other
progress being made, but we're concerned about making sure it
gets implemented.
I will focus on one area that is of concern to us and many
other universities where there has been promise but we have
great concerns and that is electronic grant submissions, the
application process. We find that there is a lot of labor
involved in learning to use all of the many systems that are
still operating, so we have many faculty staff and
administrators who have to learn to use a great host of
systems.
I would like to make a few points as this program moves
forward that I think are important to us. We really value a
single system for Federal grant contact. We want this common
face to be established. However, in the interim, agencies
continue to develop what we call rogue systems. We call them
rogue systems because they are developed outside of the E-
Grants initiative and require us to fulfill a lot of the
business requirements of those programs and agencies at our
expense.
We're managing more than a dozen different systems in
trying to process our grant applications so we really hope that
there will be some effort to discontinue the development of
these competing programs and really come under a very clear
mandate. We like the vision of a single Federal system.
We think the E-Grants program under Charles Havekost is
moving in the right direction. We applaud his efforts.
We would like to see more muscle behind the corralling of
other systems. Part of this, we need standardization. We're
interested in reviewing the standards that are currently coming
out for us to work toward. Part of this is that we then have to
develop the systems for meeting these standards. We have to
develop internal mechanisms, our own process for how to get
data to the portals; and in the past, it has been very hard.
Other initiatives have failed to get a common standard. So we
really are hoping that OMB will put some muscle behind getting
a common standard that the agencies will all use.
We want systems that involve administrators as the point of
contact for filling out grants. I know this varies in different
areas, but for universities we don't want our expensive
research scientists filling out forms. We want that done
through administration. We want the process to involve central
grants offices.
We think NSF and NIH have gotten this right. They work with
the university in doing this. We don't want to have individual
faculty members modifying conditions of a grant for which we
have fiduciary responsibility. We need a system that works
directly with the universities.
Training. We need to make sure we have a lot of good
training. A lot of the systems that are in operation now are
cumbersome, difficult to use and take a lot of effort to get
people up to speed.
User involvement. We think there needs to be more. There
has been some. NIH has been wonderful. They have had an
advisory committee representing a broad spectrum of their grant
recipients that has met frequently, a lot of e-mail contact.
That's a model. I think just the commentary may not be
sufficient. This is a partnership. The universities, through
the Federal demonstration project, NCURA, AAU, other
organizations, are willing to pull together and work in a
unified way. We need to have a partnership if the systems are
going to work.
We do understand the complexity of massive data
transmission. We recognize the efforts that are being made, and
we want to be partners in ensuring that we are efficient and
make sure our resources get devoted to the needs of our
citizens and not to administration.
Thank you.
Mr. Putnam. Thank you very much.
[The prepared statement of Mr. Parnes follows:]
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Mr. Putnam. At this time I would like to recognize Ms.
Crosby. Ms. Crosby is Director of Workforce Development for
Goodwill Industries International where she has been managing
Department of Commerce technology opportunity grants and $20
million of welfare to work grants. Prior to this role, Ms.
Crosby spent 19 years at Goodwill Industries for the greater
Detroit area where she managed some $8.3 million in grants
involving 120 employees at 11 sites.
We welcome you to the subcommittee, and you are recognized
for your testimony.
Ms. Crosby. Thank you very much. I really appreciate the
opportunity to speak on behalf of nonprofits to an issue that's
so important to us and that is maintaining funding to meet the
needs of the communities where we reside.
Goodwill Industries International, where I work, supports
176 local Goodwills in the United States that serve 98 percent
of all the counties in the United States. One of the
interesting things about my role as Director of Workforce
Development is that I represent the mission and, therefore, am
always looking for funding opportunities for grants at the
Federal level that we can use to support the mission at the
local level and reach out to put people back to work.
I have heard so much today that rings true with what
Goodwill is concerned about: the issue of common application
process, the need for training; the need to have a voice in
developing a system that not only meets the administrative
needs of the government but the end user needs, I share many of
the same concerns with the panel that's here.
But I would like to use my time to address three things
that I think are particularly challenging for nonprofits of all
sizes, whether the larger nonprofits in some of our bigger
cities or whether our small rural nonprofits taking the $30,000
grants that Mr. Sontag referenced. They are important issues
for all of us to address.
The first issue for us is the idea of common definitions in
grant proposals and the department vernaculars that creep into
the process. I was taken by just hearing the term ``one-stop''
used in relation to E-Grants here. One-stop in the employment
and training world already has a capital letter connotation.
We're now going to create a one-stop E-Grant center. It will
make the search engine real interesting, just finding one stop
on the dot-gov Web site, because we're creating yet another
vernacular and another use of a very familiar term.
From our point of view, searching and mining for Federal
funds to extend the effectiveness of our mission is
increasingly challenging. We can create these sites, but
without the notices that were referenced earlier or another way
to identify funding related to mission-specific work having
links to various agencies is not going to be incredibly
beneficial.
I certainly am here, too, to advocate on behalf of that
idea of a common standard for proposals, the time lines, not 2
weeks to 6 months but something that is reasonable and that we
know we can count on for the application process, the format,
so that there are standard elements truly in the application
process.
And scoring. Every RFP that is issued has a different
weight, methodology, thinking behind the scoring and how that
proposal will be judged. Only experience from writing, winning
and failing proposals teaches the grant personnel how to
accurately read the combination of implied expectation,
regulatory compliance and funding authorization requirements
contained in every published grant announcement. The style and
process can vary drastically, and it requires that one knows as
much as possible about the authoring source in the agency.
Deciding to respond to an RFP creates a daunting collection of
challenges.
I also think that it is important to categorize grant
opportunities by common services and populations in need rather
than by the originating agency. Organizations that look for
funding attempt to leverage that funding across the source
agencies, and being able to identify all of the funding related
to a prospective mission is important. I noted in the GAO
testimony that they had referenced that very topic, and in fact
that there were 44 different grants available. It said 44
programs administered by nine different Federal agencies to
provide employment and training services. That would be exactly
the type of challenge that we're trying to overcome when we're
mining for grants and looking for opportunities to meet local
needs.
I thank all of you for the chance to be here today. I
welcome any questions about nonprofits that I might be able to
address and hope that Goodwill can be part of this ongoing
discussion.
Mr. Putnam. Thank you, Ms. Crosby.
[The prepared statement of Ms. Crosby follows:]
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Mr. Putnam. The committee notes for the record the arrival
of the gentlelady from California, Ms. Watson. Without
objection, the record is certainly open for your written
testimony, but if you would like to be recognized for a few
opening remarks, we will also do that at this time if you so
desire.
Ms. Watson. I had been asked by Lacy Clay to deliver his
opening remarks. I understand he is on his way, so I'll defer
to him. Thank you so very much, Mr. Chair.
Mr. Putnam. Yes, ma'am. We are delighted to have you.
I will look to the gentlelady on my left, Mrs. Miller of
Michigan, to open with her round of questions for 5 minutes.
Mrs. Miller of Michigan. I will start with Karen Miller.
That's a great last name.
I was actually a former county treasurer, along with some
of the other jobs I had. After I was county treasurer, then I
was a Secretary of State.
I was particularly interested to hear you talk about what
is happened with the HAVP, the Help America Vote Plan, in
Missouri where they are loaning the money with interest. That
was not the intention of the Federal Government for that
matter. I don't know if I'm asking you a question, but I picked
up on you talking about that. We're going to get, I think, $50
million in Michigan. I'm not sure what you're getting in
Missouri.
Ms. Miller. I don't know what we're getting in Missouri
either, but when I left home yesterday my county clerk came to
me and said, I know you're going to D.C., can you stop by the
Senate offices and legislator's office?
Here's what's going on. The State has decided they want to
loan the counties money for equipment with interest instead of
doing any grants. They will keep all the funds themselves. I
know that was not the intention because we were very active in
that, in getting that funding so that local governments could
change out that equipment so that we could have consistent
elections across the country. So I don't know where to go from
there, but I wanted you to understand that when you give grants
to the States without some requirement that so much of it goes
to the locals as you intended when you passed the legislation,
that can happen.
Mrs. Miller of Michigan. One of the things we're doing in
Michigan is our now Secretary of State has put together an
advisory committee which is inclusive of most of the county
clerks actually in Michigan. Because the county clerks were
very instrumental throughout the Nation in getting that
legislation passed. I'll be interested to see how you do there.
Could you expand a little bit? You talked about the pilot
program through NACo that you're contemplating with your rural
action caucus; and most of the States, of course, have similar
experiences with a lot of rural areas. As you mentioned, they
don't have the money to have staff on hand to do the grants and
to do the grant mining and these kinds of things. What is the
intention of NACo to do this rural action caucus?
Ms. Miller. We talked to Mr. Havekost, and one of the
things he is real interested in is he wants to know if you
apply for a grant in the hard copy, written way and you apply
for a grant on-line, how they track. I mean, does it move along
quicker when it is on-line or is it slower? So he has asked us
to identify some counties that would be willing to apply both
ways. That's one way. And to also let them know then the
problems they had in applying on-line versus what they are used
to as far as the hard copy. So that is the kind of pilot that
we were looking at doing, was helping get information more for
the process than anything.
Mrs. Miller of Michigan. I think that's an interesting
concept. That has been sort of a constant theme through this
testimony this morning, that big is not always better
sometimes. In some of the smaller grant processes in the rural
communities and that, we do have to be ever vigilant to make
sure that they are able to access. They are taxpayers like
anybody else, wherever they live in America, and that they
should be able to access these kinds of things. Hopefully, we
can use the technology properly to allow them to access it that
way.
Ms. Miller. I think if it is customizable where you can
identify what you're looking for, searchable, that it will
eliminate a lot of the time that it takes to, as Ms. Crosby
identified, that's so overwhelming just finding where the
possibilities are. I think that would help rural counties
across America as much as anything, if they're able to have one
data base to go to, put in their search, what they're looking
for and identify where the funds are available.
Mrs. Miller of Michigan. Then I would question the
University of Michigan's perspective and I think for all the
universities perhaps as we talk about some of the people who
are not so cognizant of the grants that are available and don't
have grant writers on staff.
The University of Michigan, of course, has to have some of
the best expertise in the Nation on accessing your kinds of
grants. You mentioned earlier about the training, perhaps lack
of training that you sometimes get. I guess I'm going to ask
you to expand on that, help materials that are available to
your staff? You don't want to use, as you mentioned, the
research individuals to be filling out all the administrative
kinds of things. What has been the experience of the University
with asking the Federal Government for assistance, and then
what has been your experience with the different agencies in
responding to your needs to assist you?
Mr. Parnes. I think there is a lot of variability in how
well the agencies tune in to what the user needs are. I'm sure
it is related to their mission. NSF, for example, is so tied to
universities, their fast lane system is very well designed to
meet their needs. They got a green light on their
administrative procedure. They have an understanding of the
training we need to do for staff.
Some of the other systems, DOE is using basically an
industry contract system and applying it to a university
setting.
You really have a lot of difficulties getting people to
learn new terminology approaches. Sometimes the materials
developed to provide training are limited. It's a lot of labor
to bring everyone to the point where they can successfully
launch and submit these applications. So there is a wide range.
Part of it is that there has been a proliferation of
systems. So we're in a situation now where we may have a dozen
different systems that we have to learn to use. There is a
limited amount of capacity for people to keep relearning those.
We are concerned as this goes forward that whatever is
developed tries to eliminate that redundancy so we can
concentrate on training those people who need to be expert in
those areas.
Mrs. Miller of Michigan. Perhaps just an open-ended
question to the panel here. In fact, we were talking during the
break, one of the things that I found in my constituency there,
just as an example, Community Development Block Grant funds,
because of the census tracking requirement that the Federal
Government has--and we're not particularly an affluent area--
but most of my townships cannot use the money--and these are
explosive growth areas. They can't use it for roads or
sidewalks. All they can use it for now is senior citizens
projects. Of course, those are good projects, but I think there
should be some more flexibility on some of these grants to
allow you to really utilize the money as you need.
We're all interested, of course, in waste, fraud and abuse
and performance evaluations on how the Federal granting process
is working. Could any of you give me a little feedback on your
experience on how the Federal agencies benchmark your
utilization of the Federal grants? Do you have any specific
area of concern that we should be looking at as well and how
perhaps the E-Granting process may accommodate some more
efficiencies in that area?
Ms. Miller. Just as I was walking in here today, the staff
was telling me in Senator Baucus' State there are three
counties that can get Community Development Block Grants. It
leaves the rest of the State not eligible. That's what we find.
In my county, we're not eligible for the most part for
Community Development Block Grants. So it really limits where
those funds are being serviced.
I would be opposed to having that as the only criteria, as
having Community Development Block Grants. I think there are
other ways to do funding formulas that can be equitable and get
the funds down to the areas that really need them.
Ms. Crosby. When there are uniform outcome measurements
associated with the authorization of funds, I think it helps us
all to know what the expectation is at the Federal level.
Certainly recently there were employment and training outcomes
outlined that crosscut many of the agencies and make it clear
that the intent of that funding authorization goes to job
placement, job retention, improved earning capability,
regardless of who the authorizing agency is on the funds. There
is flexibility inherent in knowing that the ultimate outcome is
to achieve those goals.
I think that the E-Grants initiative, taken to its
continuing phases, has the opportunity to do that uniform type
of data gathering that will allow us all to focus on what the
intent of the authorization of dollars was versus meeting all
of the little nuances and compliance detractors along the way
that have us measuring instead, did we serve 13 percent of XYZ
with only 18 percent of dollars instead of did you put more
people to work? Did you find more people able to take
independent care of their lives? Did you improve the economic
situation of your community? If those are the intent of the
dollars, then common measurables will be really, really
empowering.
Mr. Parnes. I think universities are very adapted to being
accountable to agencies for fulfilling obligations of grants. I
think the efficiency here is in the administrative reporting
and postaward process and auditing. In other words, the more
concurrence, the more similarity.
Again, we're all saving dollars that should be better spent
on substantive needs rather than a lot of different systems
that all have at the heart the same business process and the
same accountability necessities. So it's more the uniformity,
and we're very willing to be accountable. We just want it to be
an efficient process.
Mrs. Miller of Michigan. Thank you, Mr. Chairman.
Mr. Putnam. Thank you, Mrs. Miller.
Ms. Watson, you're recognized.
Ms. Watson. Yes. In listening to the current presenters and
reading over some of your statements, I have some concerns.
Mrs. Miller and Mr. Parnes, first, NACo. Do they provide you
with grantsmanship? It is an art. I have sent my staff in the
past to the University of Southern California to take
grantmanship so that we could help community-based associations
write those grants. I have a concern as to what kind of help,
and is there a format?
I was very concerned and interested in what Dr. Parnes was
saying, because at the university level I know that poorer
universities have less speedy Internet equipment and so on, and
to do the E-applications might present a problem. I do know
trying to put the high and the new technology in our State-
funded universities and colleges has been a real challenge for
the State of California and so I want to know what impact that
will have if we go to these E-applications, which is maybe a
smart way to go. I don't know.
Also, is there assistance for you through your
organizations?
Either one that would like to speak first, fine.
Ms. Miller. As far as the National Association of Counties,
we have regular nationwide conferences that we do workshops and
trainings on specific issues that have been working through the
Congress. Like when the election reform passed, we had
workshops on that, as to what it meant, what you needed to be
looking for, how it could apply to your county. And so, yes, I
think we do that.
We also have a research department that helps counties in
identifying how to do things if they don't know how. I believe
that we have the capacity to do more, probably. We have already
said that we were committed to trying to get our counties to
use the E-Grants application process because we believe that's
the best way to go for the future is one stop or one place to
find the grants for sure, as long as they are not required to
be fill-in-the-blank, on-line all the time because that would
really hurt rural America. We couldn't do that. I agree with
your point there, Congresswoman.
Mr. Parnes. I think that's an excellent point, that there
needs to be default systems that allow institutions with
different levels of resources or technology to still
participate actively in the process. I would certainly support
that.
Universities have many resources available to do some of
the searching and grant writing, although there is a lot of
variability. National professional associations like the
National Council of University Administrators or Society of
Research Administrators have a lot of training programs and do
a lot of inter-university sharing on approaches to effective
and efficient grants acquisition, but there is no doubt that
there are haves and have-nots in terms of the capacity to go
after those funds.
Ms. Watson. Thank you.
Ms. Crosby, you are at Goodwill Industries. You have been
over the centuries, I should say, very successful with this.
Can you give us some idea how you have achieved that level of
success? We in our communities depend on Goodwill Industries to
fill in where we cannot as government. So can you tell us how
you do it and how you have done it throughout history?
Ms. Crosby. I think that Goodwill does bring a couple of
very unique things to the table when it comes to the grant
management topic. One is that we are a business. Our roots are
in the retail business. We have income from those stores where
we train people and learn about customer service. But what it
gives our organization as a nonprofit is a true appreciation
that we are a business and we will operate in a business
fashion. That isn't to say that other nonprofits don't, but it
makes it perhaps a little easier to build the systems that are
relied upon to manage other types of businesses like grants.
The second thing is we have a strong national organization.
I was very interested in your comment that grant management is
an art. I have spent over 20 years learning this. I have taken
a lot of teasing beacause I'm one of those people who actually
likes reading OMB circulars.
Ms. Watson. A rare breed.
Ms. Crosby. I'm telling you. Then to go and earn a
certificate in grant management. I go back every year for a
refresher course. I belong to two professional associations. It
takes all of that to stay abreast of the art of grant
management. But what it does for our members is give them a
national office to go to where we have always housed that
expertise and maintained a training and an outreach for them so
that they have resources to learn the art themselves. I think
it helps us be successful.
Ms. Watson. It is intriguing to hear you say you're a
business and in the business of. Being in the business of gives
you, I think, an extra dimension; and maybe that is what we
ought to kind of try to get our other organizations to look at,
the business end of it.
Paperwork. That has been a huge stumbling block in all
sectors. It would be interesting--and this is to the
committee--if we could have you from your end suggest to us how
the paperwork could be reduced. Maybe this E-application and
response might be the way to go.
But I am concerned about the capability and capacity in
other counties, in universities, colleges. I'm an educator.
That comes out time and time again. Educators complain about
the paperwork when they go after these grants. There are so
many varieties and so many contingencies that they have to
consider. It just becomes a lot of work.
It would be interesting to me if you could suggest to us
how to get to what you need to know and to respond to with less
paperwork and less writing. Can we use a checkoff? A check box
system with a few comments?
I just throw that out. I'm thinking as I'm talking. How can
we come up with a way to expedite these grant applications and
require less time of those of you that are responding and kind
of guarantee greater success? I just throw that out.
Ms. Miller. Congresswoman, I would say that if the format
was the same for every kind of grant you applied for and the
requirements as far as the financial requirements of the entity
that's applying and stuff, the information could stay
consistent, then your grant writers within your community or
within your organization wouldn't have to continually redo that
and it would be a standard format where they would just change
then the focus on that particular grant and could leave the
rest of it as the template that they would always use. I think
that would help everyone across the country.
Ms. Crosby. It's so amazing that today one of the first
places to start in my mind as we dissect the request for
proposal is, can it be stapled? Can it be bound? Will it have
to be in a plastic spline or how are we going to have to get it
there? Will it be 7 copies, 10, 15 or 2? Is it 40 pages? Is it
75? Do those pages include the resumes and bios or do they
exclude the resumes and bios? The uniformity of just
presentation alone could take us a big step. I think E-Grants
has that potential.
Mr. Parnes. I would endorse my colleagues here. Even though
we give up our competitive advantage in Michigan because
knowing how to do all this really does help, we would sacrifice
that competitive advantage for simplicity.
Ms. Watson. I just want to comment on what Ms. Crosby said.
I was writing my dissertation, and it has to be specific to
even the borders. It drives you crazy. There are only certain
people who even type those things up.
As Dr. Parnes said, some of you can't even compete because
you have to be so specific. I have always wondered, does
government really need to do this and all of our different
agencies and departments and all? So I think you could help us
by kind of responding to this inquiry, by writing us some of
your thoughts on how we could streamline it. And maybe the E
system is the answer. But I'm concerned about the capacity,
too. We don't have any perfect resolutions to these problems,
but you could certainly help us as we deliberate.
Thank you very much.
Mr. Putnam. Thank you, Ms. Watson.
I want to share some of those same thoughts. I am glad that
OMB is still here to listen to a number of these issues.
Mr. Parnes, you mentioned rogue systems. They are still
being developed even as, and I presume now, even as OMB is
attempting to get their hands around a common E-Grant system,
even as the law mandates that we move toward a standardization,
that there are still agencies out there developing their own
specific stovepipe. Is that correct?
Mr. Parnes. I don't know if I have exact information on the
start dates for all those systems. Because I think there are
legacy systems and, as was commented in the first panel, some
agencies to their credit may have gone out front in developing
systems at a time where they thought that would be helpful. I'm
not sure how much development is going on now, although I think
there is still some. I would need to verify if there are new
initiatives currently under way or if these are just
continuations of those systems.
I think there was a comment about culture when you asked
the question earlier. I think it gets to the heart of this. And
we have issues at the universities as well. How do you meld a
lot of different cultures, each of whom believe their system is
serving the needs of their agency?
I think that to me is the most critical element here, is
having enough strength and will to actually bring those systems
into alignment. We know there is going to be an interim period
where some of these older systems are going to run, but we
really want to see real significant progress toward reducing
those numbers and making sure there aren't new ones introduced.
I don't have exact dates on whether those have been initiated
within this short time period.
Mr. Putnam. Conversely, is it realistic to expect that
there would be a universal application that would be specific
and appropriate to the needs of NIH, work force development and
local law enforcement grants? Is that really what we want to
shoot for?
Ms. Miller. I believe there could be. That there could be
the template that is the standardization and then a specific
section that identifies the specific agency you're working
with. But, for the most part, all the information should be
standard. As Ms. Crosby said, the same amount of copies, the
same way it is submitted. All that standardization is going to
help everybody. It's required on every grant. It's just
required in different formats. So if it could be all put in the
same format, I believe it would be beneficial.
Mr. Putnam. You mentioned, Commissioner Miller, about the
need for some universal approach to it. Mr. Parnes did as well;
and you did as well, Ms. Crosby. So everybody agrees that there
ought to be common definitions, common standards. But you also
made reference to the success of the University of Michigan and
that some people have grant writers on staff and some don't.
Have we reached a point where we're not necessarily rewarding
the most innovative programs or the most efficient programs but
we're rewarding the folks who have mastered the nuance of the
grant language?
Ms. Miller. I think that easily is what happens. I believe
that the needs are as great in those counties that don't have
the grant writers or whatever. They just don't know where to go
to even try to apply for a grant. Once they find that there is
grant money available, it scares them to death looking at the
proposal and trying to figure out how to do it.
I just had a fire district working on homeland security
grants. It's a volunteer fire department. I sent them to the
regional planning commission because at least there they know
how to do that. They can guide them. I believe that you're
right, if you have money and you can afford to hire these
people, you have a better shot at getting more money. So those
that don't have money that probably need it worse are the ones
that are being left out; and that is rural America, from my
perspective.
Mr. Putnam. Mr. Parnes, you advocated OMB putting muscle
behind the common standard. How do you sanction or disincent
rogue systems or failure to comply? How do you do that without
punishing the people at the end?
You said OMB should put muscle behind the common standard.
What about those agencies who don't comply? What do you do
about that?
Mr. Parnes. I don't know if I have an answer to that in
terms of what pressure could be brought to bear, so I really am
not sure I'm kind of capable of speaking to that point in
particular.
We do believe, in reference to the last question, in peer
review in terms of substantive content of grants. In that
respect, we recognize a lot of difference. But it is the
administrative shell, the common business elements where I
think pressure should be brought on those agencies.
I do recognize the dilemma, is that there are limited means
to do that. One is funding. We don't want to impact the grant
recipients down the line by reducing funding in areas of need
because the administrative compliance with this act isn't
present, but I don't know what other tools are available other
than looking at the funding for the administrative component
perhaps separately from the substantive granting component in
some of these agencies.
The question asked earlier of what is the cost of grants
management and is there some way of looking at how much is
being expended on unique systems that might better be used in
developing some of these common systems would be an approach.
Mr. Putnam. You have $500 million a year in Federal money.
Are the obstacles to getting that money appropriate for $500
million, and is the oversight of that $500 million throughout
the life of that grant appropriate?
Mr. Parnes. I think there is a lot of appropriate oversight
of the funds universities receive. I think many of the agencies
are very active and have developed mechanisms for really
tracking how those funds are being used and, as I said, holding
us accountable. I think there are probably administrative
efficiencies in how that is done that would save both the
agencies and the Federal Government as well as universities
time and money. A lot of this goes back again to having
simpler, single systems. I think the act envisions that. I
support the act and the effort to implement it.
In terms of obstacles to getting those funds, it's hard for
me to understand the question entirely. Obviously, the
obstacles are worth overcoming. Whether we want to put our
energy into overcoming obstacles instead of doing better and
more research that can be put to use for public good, I think
it is ensuring that is where our effort goes, is into research,
training, public service and not into kind of administrative
hurdles that are more than necessary for purposes of
equitability and accountability.
Mr. Putnam. You're satisfied with the amount of oversight,
though, on the back end?
Mr. Parnes. Yes.
Mr. Putnam. We have representatives from for-profit, not-
for-profit, public, private here. In your viewpoint, are grants
appropriately distributed among public, private, for-profit,
not-for-profit, faith-based? Do we have an even distribution,
an appropriately even distribution? What are your thoughts if
there are differences on who best manages or best handles those
human-services-type Federal grants?
Ms. Crosby mentioned the business approach. They are
particularly good at getting these things because they have an
ability, they have a history, they have a tradition of being
able to draw down those grants. What are your thoughts on the
balance there between the larger organizations and the smaller
or more rural groups and the different attitudes they bring to
the table based on either faith-based, profit, nonprofit,
public, private?
Ms. Karen Miller. All I have is the experience of my own
county, but I know that as a local elected official, we don't
have enough money in our budget to be able to meet that need,
and it takes the combination of the churches, the not-for-
profits, the Salvation Armies, the whole works to be able to
serve the needs of the most needy in our community through
those human service grants.
So, I mean, I believe that from my perspective it's working
fairly well. I mean, we're all getting a piece of it, and we're
meeting the need by partnering. I believe that any time we can
encourage partnerships with the local governments and the not-
for-profits, it's encouraging. I wish grants would require, or
give preference to those that partner with other agencies to
better do a job instead of compete against each other, as
cities and counties do all the time.
If the legislation was written in such a way to incentivize
partnerships, I think we would serve our citizens much better
than we do today.
Mr. Putnam. Ms. Crosby.
Ms. Crosby. I think that there are probably a couple of
interesting things in what you said. Who is the best might not
be the point system I'd want to enter into. Nonprofits
generally operate on a human services mission that does not
include infrastructure building that we would expect our
municipalities to address, nor the academic research and
intense training levels of the university. In other words, we
each have our niche.
Having said that, you're looking at three different OMB
circulars that we operate under, too, and those cost principles
mean, every time you want to enter into a collaboration,
somebody is going to have to be very savvy and love to read all
three of them, because in taking the fiscal responsibility for
that collaboration and sharing the responsibility, there's
going to be three different sets of rules to match.
So if we're going to gain at the local level, small
communities as well as large, some efficiency, it probably is
another important piece to address in improving the grant
system that there's a greater uniformity in those systems.
Mr. Putnam. Very good.
Ms. Watson, any final comments?
Ms. Watson. Mr. Chairman, apparently Representative Clay
has been delayed further, and he would like to have his
statement be included in the record.
Mr. Putnam. Certainly. Without objection, we will enter
that in the appropriate place in the record.
[The prepared statement of Hon. Wm. Lacy Clay follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Putnam. And we thank you for being here, and we thank
Mrs. Miller, and we thank our panelists as well as our first
panel. Obviously, we have much work to do in terms of grants
management. We will continue to monitor the progress of OMB in
bringing forward an effective E-Grants approach and a
simplified and streamlined approach that is successful for both
the grantees and the citizens who benefit from the funds that
are expended on their behalf.
So, with that, the hearing stands adjourned.
[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]
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