[House Report 112-484]
[From the U.S. Government Publishing Office]
112th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 112-484
======================================================================
GRANT REFORM AND NEW TRANSPARENCY ACT OF 2011
_______
May 15, 2012.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Issa, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 3433]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 3433) to amend title 31, United
States Code, to provide transparency and require certain
standards in the award of Federal grants, and for other
purposes, having considered the same, report favorably thereon
with amendments and recommend that the bill as amended do pass.
CONTENTS
Page
Committee Statement and Views.................................... 2
Section-by-Section............................................... 13
Explanation of Amendments........................................ 16
Committee Consideration.......................................... 16
Application of Law to the Legislative Branch..................... 16
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 16
Statement of General Performance Goals and Objectives............ 16
Federal Advisory Committee Act................................... 16
Unfunded Mandate Statement....................................... 16
Earmark Identification........................................... 17
Committee Estimate............................................... 17
Budget Authority and Congressional Budget Office Cost Estimate... 17
Changes in Existing Law Made by the Bill as Reported............. 18
Minority Views................................................... 24
The amendments (stated in terms of the page and line
numbers of the introduced bill) are as follows:
Page 2, after line 7, strike the item relating to section
7402 in the table of contents proposed to be inserted and
insert the following:
``7402. Merit-based selection procedure requirements in awarding
grants.
Page 11, line 5, strike ``name, title, and employer'' and
insert ``employer, and either the name and title or a unique
identifier,''.
Committee Statement and Views
PURPOSE AND SUMMARY
From 1990 to 2010, Federal outlays for grants more than
quadrupled, rising from $135 billion to more than $600 billion.
In FY 2010, grants consumed nearly one-fifth of the entire
Federal budget. Despite this increased grant spending, which
seems likely to continue, little attention has been paid to
ensuring that grants are awarded fairly and transparently, or
that grant funds are accomplishing the purposes for which they
are intended. The dramatic surge in Federal grant spending has
left taxpayer dollars vulnerable to waste, fraud,
mismanagement, and abuse. Identifying and reducing these
vulnerabilities in the awarding and administering of grant
programs has never been as critical as it is today.
Transparency can provide a check on waste, fraud, and abuse in
government spending.\1\ Today, however, all too often, Federal
grant spending is carried out in an opaque and relatively
secretive way.
---------------------------------------------------------------------------
\1\See, e.g., Testimony of Earl Devaney before the Committee on
Oversight and Government Reform, June 14, 2011, available at http://
oversight.house.gov/images/stories/Testimony/Devaney_Testimony_2.pdf,
at 4 (``Devaney Testimony'') (``Transparency can cause embarrassment,
which, in turn, causes self-correcting behavior'').
---------------------------------------------------------------------------
H.R. 3433, the Grant Reform and New Transparency Act of
2011, or GRANT Act, is intended to strengthen Federal grant
programs on a government-wide basis. The bill aims to improve
the grant process at all stages of the grant life cycle. The
bill requires greater accountability in grantees' use of grant
funds, addresses the agency close-out process following
completion of the grant, and directs attention to the need for
a highly trained workforce to effectively award and administer
Federal grant funds.
The centerpiece of the bill, however, is the enhanced
transparency it brings to discretionary grant spending. The
bill requires transparency in the decision-making process
surrounding the award of discretionary grants. The bill opens
Federal grant spending to closer scrutiny by the public,
watchdog groups, media, Executive-Branch management, and
Congress.
The bill's transparency provisions apply only to
discretionary grants--not to formula grants, block grants, or
entitlements. The curtailing of earmarks means that the
Executive Branch has greater discretion to allocate funds among
projects. American taxpayers have the right to expect free
access to accurate, comprehensive, and useful information
describing how Federal agencies exercise that discretion. The
bill requires that agencies use merit-based selection
procedures that promote the use of competition. It does not
prescribe the precise procedures to be used to carry out
specific grant programs. What it does is establish baseline
standards, such as requiring advance notice of grant
opportunities and the disclosure of the evaluative criteria
that will be used in selecting among grant applications.
Agencies have flexibility to address specific matters that may
be important to their mission, such as the consideration of
unsolicited proposals or the enumeration of appropriate
exceptions to general procedures.
The bill's transparency provisions require that grant award
information, including a copy of the successful grant
application, be posted on a grants website. Importantly, under
the bill, agencies are not required to post any information on
the website that would otherwise be exempt under the Freedom of
Information Act. The Committee expects that agencies will
develop procedures and safeguards to protect proprietary or
privileged information, including patentable ideas or trade
secrets, from being disclosed. The Committee believes that the
grant applicant is in the best position to initially identify
material in its application or proposal that should be
considered for redaction prior to posting on a publicly
accessible website. The Committee expects that agencies can
meet the bill's requirements while preserving the
confidentiality of certain information by requesting that
applicants submit a publicly available version of an
application either at the time it submits an application, or
within 15 days after notice of award. In addition, the bill
allows the agency to delay the public disclosure of the
application or redacted application of a successful applicant,
under limited circumstances, for up to three years.
The bill is intended to also bring transparency to the
agency's competitive grant decision-making process by requiring
disclosure of the award decision documentation and rankings of
successful applications. Applicants and the public should be
able to understand from information posted on an agency's
website why a decision was made to choose a particular grant
applicant from among a pool of competing applicants. In this
regard, it is common practice for agencies to provide scores
and rankings to proposals received, based on the merit of the
grant application submitted, as judged by peer reviewers or
evaluators. The bill does not prohibit an agency from choosing
not to follow the rankings of applications in awarding a
particular grant; it only requires that the agency explain and
post the rationale for such decisions.
The bill also adds transparency to the close-out phase of
the grant process. Upon completion of the grant, the agency
must post any final reports that were required to be submitted
by the grantee under the grant. Such information can be useful
in determining whether a grant accomplished the purpose
intended.
The GRANT Act requires each agency to post on its website a
grant solicitation forecast identifying potential grant
opportunities it expects to be available in the upcoming year.
The Committee believes that comprehensive grants transparency
should include some form of predictive information about future
planning for grants. Aside from listing specific upcoming
competitions and deadlines, agencies should disclose any broad
goals and objectives they intend to pursue as part of their
grantee selection process. This requirement is intended to
provide greater opportunities for smaller organizations to
compete for projects by giving them advance notice and time to
prepare. This opportunity for increased competition should
result in greater innovation and better outcomes for agency
grant programs. The Committee recognizes that the budget and
appropriations process may limit the ability of agencies to
definitively identify future grant opportunities. Accordingly,
the forecast is not binding on agencies but should be based on
the best information available.
The GRANT Act includes two other measures to improve the
discretionary grant-making process and to promote transparency.
First, it requires agencies to evaluate potential grantees to
ensure they have the necessary financial systems in place and
are capable of performing the grant. This requirement will help
agencies avoid problems that have occurred when organizations
ill-equipped to carry out a project use funds for unallowable
purposes or are unable to successfully carry out the grant.
Second, the bill promotes transparency and open decision-making
by providing disappointed applicants for grants valued at more
than $100,000 with an opportunity for a debriefing, in which
the agency will explain why, e.g., an applicant was not funded,
or not funded at the level sought.
The GRANT Act contains several reporting requirements
covering all types of grants. First, the bill directs the
Office of Management and Budget (OMB) to report on a
government-wide basis the amount of undisbursed grant funds in
grant accounts that is expired, and thus no longer eligible to
be used to carry out the grant. Second, the bill directs the
Government Accountability Office (GAO) to report on several
aspects of the grant workforce--those individuals who award and
monitor Federal grants, and whose performance is so critical to
the success of these programs. Finally, the bill contains a
provision requiring OMB to submit a plan to Congress for
improving the single audit process, a key tool in ensuring
grantee accountability. The bill identifies several elements to
be addressed and requires the plan be submitted within 6 months
of enactment. OMB is then to report on implementation of the
plan.
BACKGROUND AND NEED FOR LEGISLATION
For the past two years, the Committee has examined the need
to improve the transparency of Federal information,
particularly Federal spending data. The Committee's efforts
have included seven hearings,\2\ the formation of the
Congressional Transparency Caucus,\3\ and extensive outreach
and research by Republican and Democratic Committee staff. The
Committee on Oversight and Government Reform was prompted to
inquire into waste, fraud and abuse in the grant system due to
the unprecedented surge in grant spending that occurred as part
of the American Recovery and Reinvestment Act (Recovery
Act).\4\ The initial inquiry focused primarily upon the
deficiencies in the operation of Grants.gov, as well as its
operational failures.\5\ More recently, the Committee broadened
this inquiry to examine grants in a more general manner.
---------------------------------------------------------------------------
\2\``Preventing Stimulus Waste and Fraud: Who are the Watchdogs?''
March 19, 2009; ``Tracking the Money: Preventing Waste, Fraud and Abuse
of Recovery Act Funding,'' July 8, 2009; ``Tracking the Money: How
Recovery Act Recipients Account for their Use of Stimulus Dollars,''
Nov. 19, 2009; ``The Freedom of Information Act: Crowd-Sourcing
Government Oversight,'' March 17, 2011; ``Achieving Transparency and
Accountability in Federal Spending,'' June 14, 2011; ``Transparency
Through Technology: Evaluating Federal Open-Government Initiatives,''
March 11, 2011 (Subcommittee on Technology, Information Policy,
Intergovernmental Relations and Procurement Reform); ``Improving
Oversight and Accountability in Federal Grant Programs,'' June 23, 2011
(Subcommittee on Technology, Information Policy, Intergovernmental
Relations and Procurement Reform).
\3\See Press Release, ``Issa, Quigley Announce Bipartisan
Transparency Caucus,'' March 24, 2010.
\4\P.L. 111-5 (Feb. 17, 2009).
\5\See, Letter from OGR to Sheila Conley, Deputy Assistant
Secretary for Grants, U.S. Department of Health and Human Services
(June 15, 2009) (on file with the Committee). Response of Richard
Turman, Acting Assistant Secretary for Resources and Technology, U.S.
Department of Health and Human Services (August 28, 2009) (on file with
the Committee).
---------------------------------------------------------------------------
SUBCOMMITTEE HEARING
On June 23, 2011, the Subcommittee on Technology,
Information Policy, Intergovernmental Relations and Procurement
Reform held a hearing to explore the issues surrounding grant
transparency, management and oversight. The hearing,
``Improving Oversight and Accountability in Federal Grant
Programs,'' comprised two panels; the first panel presented
experts from GAO, the Congressional Research Service (CRS), the
Department of Justice (DOJ) Office of the Inspector General
(OIG), and OMB. The second panel featured Oklahoma Senator Tom
Coburn, who discussed the findings from his report regarding
grant waste, fraud and abuse at the National Science Foundation
(NSF).
In the first panel, Jeanette Franzel, Managing Director of
GAO's financial management assurance team, testified that there
are weaknesses in the control systems of grants at all points
in the grant cycle.\6\ Ms. Franzel testified that GAO's audits
found that agencies awarded discretionary grants without
adequately documenting the grantee selection process. GAO found
that in some instances, agencies did not perform pre-award
reviews until after the grants had been awarded. GAO found
numerous weaknesses in the award process used by agencies,
including a lack of documentation explaining the results of
grant award decisions and weak internal controls for ensuring
that grant applications would be evaluated consistently by peer
reviewers.\7\ In the post-award stage, she stated that agencies
need to improve oversight of grantee activities and management
of Federal funds, noting that effective oversight procedures
based on internal control standards for monitoring the
recipients' use of awarded funds are key to ensuring that
waste, fraud, and abuse are not overlooked.\8\
---------------------------------------------------------------------------
\6\See Jeanette M. Franzel, GAO Managing Director Financial
Management and Assurance, Federal Grants: Improvements Needed in
Oversight and Accountability Processes, Testimony before the House
Subcommittee on Technology, Information Policy, Intergovernmental
Relations and Procurement Reform, June 23, 2011, at 6-7 [hereinafter
GAO Federal Grant Oversight Testimony].
\7\Id. at 8.
\8\Id. at 9.
---------------------------------------------------------------------------
Ms. Franzel also testified that grant closeout procedures
represent one of the final opportunities to detect unallowable
uses of funds and that attention is needed to address
undisbursed balances in Federal grant programs on a government-
wide basis.\9\ She also testified that many grant programs have
significant levels of improper payments.\10\ Finally, Ms.
Franzel testified that improvements are needed to make single
audits a more effective accountability mechanism over Federal
grant spending.\11\ GAO found, in this regard, that the current
Federal oversight structure is not adequate to monitor the
efficiency and effectiveness of the single audit process.
---------------------------------------------------------------------------
\9\Id. at 10-11.
\10\Id. at 12.
\11\Id. at 13.
---------------------------------------------------------------------------
The second witness was Cynthia Schnedar, Acting Inspector
General of the Department of Justice. Ms. Schnedar told the
Subcommittee that the IG had conducted over 60 reviews of
various DOJ grant programs and found that in some programs
``inaccurate formulas were used in developing the scores and
ranks of applicants, which resulted in the allocation of grants
to 45 entities that should not have received grants, while
another 34 entities that should have received grants did
not.''\12\ She also cited examples of inconsistent treatment of
applicants and a lack of documentation of award decisions,
particularly when applications ranked lower by peer reviews
received grants over higher-ranked applications.\13\ Also, Ms.
Schnedar stated that DOJ needs to improve its procedures to
reduce risks of conflict of interest in the grant award
process. For example, one audit of one DOJ program revealed at
least 23 instances in which peer reviewers signed forms
indicating they had no conflict of interest with the grant
applications before the peer reviewers even knew who the grant
applicants were that they would be reviewing.\14\
---------------------------------------------------------------------------
\12\Cynthia A. Schnedar, Acting Inspector General, U.S. Department
of Justice, Testimony before the House Subcommittee on Technology,
Information Policy, Intergovernmental Relations and Procurement Reform,
June 23, 2011, at 4 [hereinafter DOJ Federal Grant Oversight
Testimony].
\13\Id.
\14\Id.
---------------------------------------------------------------------------
The third witness was Natalie Keegan, an analyst with CRS.
Ms. Keegan also reported problems with transparency,
particularly in the pre-award stage of the competitive grant-
making process. She testified that there is a lack of clarity
in the evaluation criteria or formulas agencies use to rank
applications.\15\ Based on a review of GAO and IG reports, she
concluded that ``[o]versight of Federal agency grants
administration is limited by the lack of transparency in the
award process.''\16\ She went on to describe systemic problems
with poor screening of peer review panels for conflict of
interest and the awarding of grants without documentation.\17\
---------------------------------------------------------------------------
\15\CRS Federal Grant Oversight Testimony, at 2-3.
\16\Id. at 4.
\17\Id.
---------------------------------------------------------------------------
The final witness on the first panel was Daniel Werfel,
Controller of the Office of Federal Financial Management,
Office of Management and Budget. He testified that
``commensurate with the substantial increase in the volume of
grant awards [over the last decade], there has also been an
increase in the efforts [to] improve management of grants by
making [it] easier for applicants to find and apply for grant
opportunities.''\18\ He stated that today, all Federal agencies
are using Grants.gov, and OMB is currently exploring ways to
improve the platform.\19\ Regarding oversight of grant
programs, Mr. Werfel testified that the single audit is the
primary tool that Federal agencies use for overseeing their
grant programs. He pointed out that under OMB's implementing
guidance to the Single Audit Act, more than 40,000 grantees
covering over 95 percent of all Federal grant expenditures are
audited annually.\20\ He stated that the administration remains
committed to continuing efforts to improve the grant management
process and identification and mitigation of waste, fraud, and
abuse and are in the early stages of developing improvements to
single audits.\21\
---------------------------------------------------------------------------
\18\Daniel Werfel, Controller, Office of Federal Financial
Management, Office of Management and Budget, Testimony before the House
Subcommittee on Technology, Information Policy, Intergovernmental
Relations and Procurement Reform, June 23, 2011, at 2 [hereinafter OMB
Federal Grant Oversight Testimony].
\19\Id.
\20\Id. at 3.
\21\Id. at 7.
---------------------------------------------------------------------------
Senator Coburn presented the findings of his recent Senate
investigation into waste, fraud and abuse in the grant programs
at the National Science Foundation (NSF). Senator Coburn's
report found more than $1.2 billion at the NSF lost to waste,
fraud, duplication, and mismanagement and an additional $1.7
billion in undisbursed balances in expired grant accounts.\22\
---------------------------------------------------------------------------
\22\According to NSF's 2010 financial statements, the agency
currently has $1.733 billion in ``undisbursed balances in expired grant
accounts.'' In addition, past audits indicate that significant numbers
of NSF-supported researchers fail to submit final and annual reports. A
2005 audit found that approximately 47 percent of the 151,000 final and
annual project reports required in the past 4 years were submitted late
or not at all.
---------------------------------------------------------------------------
At the Subcommittee's hearing, the fundamental absence of
transparency was a key finding. Chairman Lankford stated in his
opening remarks that agencies ``don't always disclose
discretionary grant criteria, and decisions are not well-
documented.'' Ranking Member Gerry Connolly agreed that there
is a need to improve standards and transparency, noting that
``applicants cannot look back and see why they won or lost.''
These statements were supported and echoed by all expert
witnesses who offered suggestions in their testimony.\23\
``Documenting the basis for final selection decisions
concerning which proposals will be funded and which will not is
a commonly-acknowledged best practice in the Federal grant-
making community.''\24\
---------------------------------------------------------------------------
\23\See, e.g., DOJ Federal Grant Oversight Testimony, at 3 (``We
believe that the Department still needs to make improvements in the
following areas: (i) ranking of grant applications; (ii) consistent
treatment of applicants; (iii) documentation and justification of award
decisions. . . .'').
\24\Danny Werfel, OMB Controller, Responses to Questions for the
Record, submitted to Rep. Lankford, Chair, Subcommittee on Technology,
Information Policy, Intergovernmental Relations and Procurement Reform,
Committee on Oversight and Government Reform, July 26, 2011
[hereinafter OMB QFR Response].
---------------------------------------------------------------------------
COMMITTEE RESEARCH AND FINDINGS
Opportunities to reduce risks and vulnerabilities related
to Federal grant programs exist throughout the entire life
cycle of grants, beginning with the award of the grant and the
process leading up to the award. The manner in which grant
funds are awarded varies from program to program based on
specific authorizing legislation. Because of the variability
among grant programs, policy makers have been reluctant to
impose a ``one-size-fits-all'' approach to the awarding of
competitive grants,\25\ leaving the system without a consistent
standard that can be applied on a government-wide basis. The
Committee recognizes that reforming the discretionary grant
award process must be undertaken in a way that respects the
underlying grant programs and the wide array of existing
purposes, characteristics, and authorities applicable to those
programs. Accordingly, the Committee expects that agencies will
be creative and flexible as they adapt their policies and
procedures as required under the GRANT Act, while maintaining
the integrity of their programs.
---------------------------------------------------------------------------
\25\For purposes of this report, competitive grants are those
grants awarded after selecting a grantee or grantees from among
competing applicants.
---------------------------------------------------------------------------
Legislation authorizing or requiring competitive grants
often gives agencies considerable latitude in choosing how to
disburse grant funds to eligible entities. In some cases the
agency decision-maker will have virtually unilateral and
unchecked discretion to select one applicant over another.
While agencies often employ some form of competitive or merit-
based procedures in awarding grants, frequently the process is
impenetrably opaque. A grant applicant that was not selected
may not be told why their proposal was not funded or why the
agency made the award decision that it did. The decisions are
often unexplained and undocumented, making it virtually
impossible for the public, an auditor, or an oversight body, to
determine whether the Federal grant award was based on merit or
other, improper considerations. The result has been a grant
process used by agencies to disburse competitive grant funds
that lacks the most basic of transparency standards. As a
result, agencies are held less accountable as stewards of
taxpayer dollars, confidence in the integrity of the grant
selection process is diminished, and providing effective and
real-time oversight is made almost impossible.
Despite existing processes that are generally not open to
public review or scrutiny, where GAO or IGs have probed
specific grant award decisions, they frequently uncover
vulnerabilities to fraud or abuse. For example, in a recent
report, GAO found that HHS's ``process for determining which
grant applicants will be awarded grants is primarily based on
the results of the peer review process,'' but that the process
``has weak internal controls to ensure that applications are
evaluated consistently.''\26\ GAO's review also revealed that
``[f]inal funding decision memos used to internally document
grant award decisions for 2007 and 2008 did not contain
supporting information regarding why applications with high
scores were not funded.''\27\
---------------------------------------------------------------------------
\26\Runaway and Homeless Youth Grants: Improvements Needed in the
Grant Award Process, GAO-10-335 (May 2010).
\27\Id.
---------------------------------------------------------------------------
Another GAO review looked at the NIH Institute and Center
directors' use of priority scores or rankings, which reflect
the evaluation of applications' scientific merit by NIH's peer
review process.\28\ Under the NIH process, the NIH directors
were to set a selective pay line which determines the
percentile rank an application must have in order to receive
funding. The directors are supposed to fund only those
applications with priority scores above the fiscal year's pay
line. However, GAO found that about 19% of the applications for
RO1 grants (NIH's main funding mechanism) that NIH funded had
scientific merit scores below the established pay line.\29\ GAO
determined that this level of discretion exercised by institute
and center directors ``represent[s] an area of potential risk''
because of their ``latitude in making these decisions.''\30\
GAO also found that while NIH policy requires documentation
explaining the reason for funding projects that do not receive
the highest peer review scores, there is no collection or
review of this documentation by the NIH director or any other
oversight body. In addition to NIH's lack of oversight, GAO
found, ``NIH had not established clear policies related to
managing conflicts of interest among senior NIH employees who
have decision-making responsibilities for NIH's research
efforts, which include NIH's extramural research funding.''\31\
---------------------------------------------------------------------------
\28\National Institutes of Health: Completion of Comprehensive Risk
Management Program Essential to Effective Oversight, GAO-09-687
(September 2009).
\29\Id.
\30\Id.
\31\Id.
---------------------------------------------------------------------------
GAO also found significant problems with Department of
Education grant award decisions and found that the Department
did not follow its own guidance for making grant award
selections.\32\ Specifically, GAO found:
---------------------------------------------------------------------------
\32\Discretionary Grants: Further Tightening of Education's
Procedures for Making Awards Could Improve Transparency and
Accountability, GAO-06-268 (Feb. 21, 2006).
---------------------------------------------------------------------------
In one case ``a senior political appointee
selectively re-reviewed and rescored particular applicants
after the peer review process had been completed. The panel had
recommended awarding grants to the top four applicants, based
on their scores. The senior official ``asked his staff to re-
review the fifth- and sixth-ranked competitors. Based on this
re-review, the ``order of the fifth and sixth ranked grantees
was reversed.'' The official then determined that the agency
should award five, not four awards. To fund five grantees, the
Department reduced the awards to each of the other grantees by
16 to 40 percent, without taking into consideration whether the
reductions would impede the grantee's ability to perform the
proposed activities and achieve the intended outcomes.
In about 98 percent of files GAO reviewed, there
was no evidence that program officers checked a grantee's audit
history--a key check on an applicant's ability to manage
Federal grant funds.
Approximately 45 percent of the grant files did
not contain documentation that the Department of Education
screened grant applicants for eligibility.
Approximately 68 percent of grant files did not
contain documentation of a thorough analysis of the applicant's
requested budget to determine whether costs were allowable.\33\
---------------------------------------------------------------------------
\33\Id.
---------------------------------------------------------------------------
In 2010, the Office of the Inspector General (OIG) of the
U.S. Department of Justice (DOJ) released a report on the OIG's
audit of the Office on Violence Against Women's Recovery Act
grant selection process.\34\ The DOJ's Office on Violence
Against Women (OVW) administers formula, block, and
discretionary grant programs dedicated to reducing and
prosecuting crimes against women. The OVW received over $380
million each fiscal year from 2006 to 2008. Although the OVW
must follow various DOJ and program-level guidelines in making
discretionary grants, discretionary grant programs provide the
OVW with wide latitude in determining who should receive an
award.
---------------------------------------------------------------------------
\34\U.S. Department of Justice, Office of Inspector General, Audit
Division, The Office on Violence Against Women's Recovery Act Grant
Selection Process, Audit Report 10-31 (July 2010), available at http://
www.justice.gov/oig/reports/OBD/a1031.pdf.
---------------------------------------------------------------------------
The OVW used peer review scores to rank grant applicants.
The OIG found the OVW did not maintain award decision documents
in order to have ``an adequate record of the reasons for
selecting the grantees that it did.'' OIG found ``OVW misplaced
important award decision documents, including 10 peer review
scoring sheets,\35\ which should be maintained to substantiate
why an applicant did or did not receive recommendations for
discretionary awards.'' Moreover, the OIG found ``a weakness in
how peer reviewers were screened for conflicts of interest
before evaluating and scoring applications.''\36\ The OIG audit
revealed ``[i]n at least 23 instances, peer reviewers signed
and dated conflict of interest forms before the date they were
assigned specific applications to review.''\37\
---------------------------------------------------------------------------
\35\The OIG ``audit revealed that in tabulating individual
application scores, OVW peer reviewers added points incorrectly.'' In
one program alone, OVW staff incorrectly calculated peer review scores
``for at least 39 out of 76 applications.'' The OIG concluded that
these miscalculations negatively affected the chances of proposals from
receiving funds.
\36\Id.
\37\Id. (``our review of 148 conflict of interest forms identified
23 forms that peer reviewers signed and dated before they received
their assigned application packets. Therefore, we believe some peer
reviewers attested that they were free from conflicts of interest even
though they did not yet know the specific applicants and the proposals
they were to evaluate.'').
---------------------------------------------------------------------------
Finally, a recent National Academy of Sciences report found
systemic problems with the grant award practices of the
Department of Justice's National Institute of Justice
(NIJ).\38\ The report concluded:
---------------------------------------------------------------------------
\38\``Strengthening the National Institute of Justice,'' National
Research Council, The National Academies Press, Washington, DC, (2010).
``Improvement is needed in NIJ's internal operations
for selecting and managing its programs to bring them
in line with the practices of other Federal research
agencies. An overriding theme is the need for greater
transparency in processes and decisions. Planning
activities are not well documented, the signaling of
research priorities is haphazard, peer-review feedback
to applicants is limited, grant award decisions are not
in line with announced intentions, and report review is
handled inconsistently by different units. Insufficient
transparency contributes to the opinions expressed by
practitioners and researchers that NIJ decisions are
not made on the basis of scientific criteria. From
early announcement of award cycles, to greater
information on proposal reviews and decisions, to
increased availability of data on awards and award
completion, NIJ needs to be better understood by the
research and practitioner communities.''\39\ (Emphasis
added).
---------------------------------------------------------------------------
\39\Id. at 7.
---------------------------------------------------------------------------
IMPROVEMENTS TO THE SINGLE AUDIT PROCESS
Once grants are awarded, agencies face severe challenges in
monitoring grantees and have limited tools available to ensure
that funds are properly used. For example, there is widespread
agreement that steps should be taken to improve the single
audit process, a key accountability mechanism, and more focus
should be given to training agency personnel involved with
awarding and monitoring grants.
Testimony before the Subcommittee described weaknesses in
grant oversight through the existing mechanisms, particularly
the Single Audit Act.\40\ The Single Audit Act is the primary
tool for oversight over Federal grant awards.\41\ The Single
Audit Act requires States, local governments, and nonprofit
organizations expending $500,000 or more in Federal awards in a
year to obtain an audit in accordance with the requirements set
forth in the act.\42\ A single audit consists of: (1) an audit
and opinions on the fair presentation of the financial
statements and the Schedule of Expenditures of Federal Awards;
(2) gaining an understanding of and testing internal control
over financial reporting and the entity's compliance with laws,
regulations, and contract or grant provisions that have a
direct and material effect on certain Federal programs (i.e.,
the program requirements); and (3) an audit and an opinion on
compliance with applicable program requirements for certain
Federal programs.\43\ Auditors evaluate the grantee's financial
statements in order to indentify material non-compliance with
the terms of grant agreements or Federal regulations or
laws.\44\ All audits performed under the act are submitted to
the Federal Audit Clearinghouse, available on a public database
maintained by the Census Bureau.\45\
---------------------------------------------------------------------------
\40\See GAO Federal Grant Oversight Testimony, at 13.
\41\OMB Federal Grant Oversight Testimony, at p.3.
\42\31 U.S.C. 7501.
\43\GAO Federal Grant Oversight Testimony, at 2.
\44\CRS Memo on file with Committee staff.
\45\OMB Federal Grant Oversight Testimony, at 3.
---------------------------------------------------------------------------
GAO and others have identified and reported on significant
concerns with the single audit process that diminish its
effectiveness as an oversight accountability mechanism.\46\
``Specifically, Federal agencies do not systemically use audit
findings to identify and understand emerging and persistent
issues related to grant programs and grantee use of
funds.''\47\ Furthermore, ``time frames of the single audit
process do not facilitate the timely identification and
correction of the audit findings.'' GAO has also identified
concerns regarding the need for OMB to issue its annual single
audit guidance in a timelier manner.
---------------------------------------------------------------------------
\46\GAO Federal Grant Oversight Testimony, at 13.
\47\GAO, Single Audit: Opportunities Exist to Improve the Single
Audit Process and Oversight, GAO-09-307R (March 2009).
---------------------------------------------------------------------------
The Committee believes that reforms to single audits are
warranted. Accordingly, the GRANT Act directs OMB to prepare a
plan to improve the single audit process, including milestones
for implementation.
IMPROVEMENTS TO THE GRANT CLOSE-OUT PROCESS
Another key oversight weakness involving grant management
involves the volume of undisbursed funding in expired grant
accounts. GAO recommended as far back as August 2008 that the
Director of OMB instruct executive departments and independent
agencies to annually track the amount of undisbursed grant
funding remaining in expired grant accounts and report on the
status and resolution of such funding in their annual
performance plans and Performance and Accountability
Reports.\48\ OMB reported that it determined that no additional
guidance was needed. However, in fiscal year 2010 OMB directed
agencies funded under the Commerce, Justice, Science, and
related Agencies Appropriations Act to track undisbursed
balances in expired grant accounts.\49\ Those agencies were
required to report this information in the Performance &
Accountability Reports or Agency Financial Reports and annual
performance plans and budgets.\50\ OMB states that it is
conducting a holistic review of how Federal agencies manage
their grants.\51\
---------------------------------------------------------------------------
\48\GAO Federal Grant Oversight Testimony, at 11.
\49\OMB QFR Response, at 5.
\50\Id.
\51\Id.
---------------------------------------------------------------------------
Better tracking of grant accounts maintained in all Federal
payments systems could identify the expired grants with
undisbursed balances and make funds available for other
assistance projects or facilitate the return of these funds to
the Treasury. However, dozens of past reports from multiple
agencies suggest that undisbursed balance in expired grant
accounts are a longstanding challenge and share common grants
management problems. For example, as stated, NSF is estimated
to have more than $1.7 billion in expired grant accounts. The
reports generally attribute the problems to closeouts being a
low management priority, inconsistent closeout procedures,
poorly timed communications with grantees, or insufficient
compliance or enforcement. The GRANT Act addresses this by
requiring that OMB instruct Executive agencies to identify the
amounts of undisbursed and expired grant funding remaining in
grant accounts and report to OMB on the status and resolution
of these amounts.
GRANT WORKFORCE
Under the Federal Acquisition Regulation (FAR), agency
heads are required ``to establish and maintain a procurement
career management program and a system for the selection,
appointment, and termination of appointment of contracting
officers.''\52\ The selection and appointment of a contracting
officer ``must be consistent with Office of Federal Procurement
Policy's (OFPP) standards for skill-based training in
performing contracting and purchasing duties as published in
OFPP Policy Letter No. 05-01, Developing and Managing the
Acquisition Workforce, April 15, 2005.''\53\ These requirements
ensure that contracting officers possess the necessary skills
and expertise to properly represent the government's interests.
By comparison, there exist no government-wide training or
accreditation standards applicable to Federal personnel
involved with awarding or monitoring Federal grants. The bill
includes a requirement for a broad report from the Government
Accountability Office intended to identify areas where
additional focus is needed to improve and support the grant
workforce.
---------------------------------------------------------------------------
\52\FAR 1.603-1, citing 41 U.S.C. Sec. 414(4), recodified at 41
U.S.C. Sec. 1702(b)(3)(F).
\53\FAR 1.603-1, citing OFPP Policy Letter No. 05-01, Developing
and Managing the Acquisition Workforce, April 15, 2005 available at
http://www.whitehouse.gov/omb/procurement _policy_letter_05-01/. (``Not
later than January 1, 2006, FAI, in partnership with DAU, shall develop
a certification program that considers a variety of means, including a
fulfillment process, for assessing and certifying that the education,
training, and experience requirements for the GS-1102 series, as
described herein, have been met.'').
---------------------------------------------------------------------------
LEGISLATIVE HISTORY
The GRANT Act builds on previously enacted legislation that
would enhance the transparency of Federal grant spending,
particularly the Federal Funding Accountability and
Transparency Act of 2006 (``FFATA'')\54\ and the Federal
Financial Assistance Management Improvement Act of 1999
(``FFAMIA'').\55\ FFATA required the Office of Management and
Budget (OMB) to establish a website, USASpending.gov, which
publishes selected information, gleaned from government-wide
databases, for each Federal grant, loan, and contract. Congress
enacted the FFAMIA to improve the effectiveness and performance
of Federal grant programs, simplify the grant application
process, and reduce the burden on applicants by providing for a
central website for finding and applying for Federal grants.
The FFAMIA led to increased transparency of the Federal grants
process, principally through the creation of a web portal for
Federal grant applicants to search and apply for Federal
grants.
---------------------------------------------------------------------------
\54\Pub. L. No. 109-292.
\55\Pub. L. No. 106-107 (31 U.S.C. Sec. 6101 note).
---------------------------------------------------------------------------
Last Congress, both the House and the Senate passed bills
that would have reauthorized FFAMIA and thereby improved the
transparency and usefulness of data on the website related to
grants.\56\ The Senate Homeland Security and Governmental
Affairs Committee reported that, ``although FFAMIA required the
development of a common system, including electronic processes,
through which a grantee could apply for, manage, and report on
the use of funding, systems for any grant phase beyond the
application phase had not been developed.''\57\ The Committee
report pointed out that in his responses to questions for the
record following his January 14, 2009, confirmation hearing
before the Senate Homeland Security and Governmental Affairs
Committee, OMB Director Peter Orszag indicated his support for
efforts to streamline grant administration, stating, ``I
believe that improving grants management should be a priority,
and that we should work toward simplifying the process and
creating more integrity and transparency in the grant-making
process. The enactment of [FFATA] was a critical step toward
greater transparency of grant awards, but significant work
remains in carrying out the full vision of this law.''\58\ The
House and Senate versions of the FFAMIA reauthorization bills
were, however, never reconciled.
---------------------------------------------------------------------------
\56\S. 303 was passed by the Senate on March 17. The House passed
S. 303 on December 14, 2009.
\57\S. Rept. 111-7, March 11, 2009.
\58\Id. at 4, citing Additional Questions for the Record following
the Nomination Hearing for Peter Orszag, submitted by Senator George V.
Voinovich, January 14, 2009.
---------------------------------------------------------------------------
H.R. 2146, the House-passed DATA Act, would build upon and
strengthen FFATA and improve the quality of Federal spending
data. DATA provides improved Federal reporting and transparency
for all types of Federal spending, including grants. The GRANT
Act complements the DATA Act, and provides for unprecedented
transparency throughout the grant life cycle. The Committee
expects that the website used to implement the GRANT Act will
be compatible and merged or linked with the website required
under the DATA Act.
Representative James Lankford, Chairman of the Subcommittee
on Technology, Information Policy, Intergovernmental Relations
and Procurement Reform, introduced the GRANT Act on November
16, 2011. The bill was amended during a Committee business
meeting on November 17, 2011. After amending the legislation,
the Committee favorably reported it by voice vote.
Section-by-Section
Section 1. Short title
This section states that the Act may be cited as the
``Grant Reform and New Transparency Act of 2011,'' or the
``GRANT Act.''
Section 2. Table of contents
This section lists the table of contents.
Section 3. Grants transparency requirements
This section adds a new Chapter 74 to Subtitle 5 of title
31, U.S. Code, beginning with:
Chapter 74--Grants Transparency Requirements
Section 7401. Definitions. Defines the terms ``grant,''
``competitive grant,'' ``executive agency,'' ``board,''
``proposal abstract,'' and ``grant reviewer.''
Section 7402. Merit-based selection procedure requirements
in awarding grants.
Requires agencies to establish merit-based selection
procedures for discretionary grant programs of the agency.
Requires merit-based selection procedures to include advance
notification of the grant opportunity; a clear statement of the
purposes and eligibility requirements; and disclosure of the
evaluation criteria.
Section 7403. Pre-award evaluation requirements. Requires
Executive agencies to conduct an evaluation of the ability of
the applicant to successfully perform a grant. Specifies those
factors and considerations to be taken into account in making
this determination.
Section 7404. Website relating to Federal grants. Requires
OMB to upgrade an existing website or establish a public
website for finding Federal grant opportunities and applying
for grants so that such website may serve as a central point of
information for competitive grants. Requires that any such
website post the announcement and purpose for the: grant; grant
period; amount of funds available; eligibility; agency point of
contact; evaluation factors or criteria; process and standards
for safeguarding against conflicts; and application deadline.
As part of the requirement to disclose the grant period,
agencies should indicate whether the grant will be continued,
that is, whether the announced grant will be one in a series of
grants expected to be awarded annually for some period of time.
Specifies that any such website should be accessible with any
computer platform; provide for searchability by type, purpose,
funding agency, program source and other relevant criteria;
manage, track and report the use of competitive grants and
provide all required certifications and assurances for a
competitive grant. Requires the publication of grant award
information, including a copy of the executed grant agreement;
proposal, application or plan; award decision recommendation
and rankings; justification for deviating from rankings;
disclosure of information related to the pool of peer
reviewers; and disclosure of other grant reviewers. Provides an
exception to requirement to post the successful proposal under
limited circumstances. Requires that the final report or other
written product be posted. Calls for the submission and
publication of grant solicitation forecasts on the grants
website. The forecast shall state the subject and purpose of
the grant; the point of contact; the notice of publication date
and the estimated award amount. Provides that need not post
information that would otherwise be exempt from the Freedom of
Information Act. Requires that the website post the required
information in a user-friendly, searchable and downloadable
format.
Section 7405. Debriefing. Provides that, if requested, for
a grant over $100,000, the agency shall provide the applicant a
timely debriefing explaining the basis for the agency's
decision. The Committee intends that this debriefing afford the
applicant an opportunity to ask questions about the selection
process.
Requires OMB to issue guidance to agencies for establishing
merit-based selection procedures no later than 60 days after
the date of enactment. Requires each agency to establish merit-
based selection procedures no later than 180 days after the
date of enactment. Requires the Comptroller General to submit a
report to the Committee on Oversight and Government Reform of
the House of Representatives and the Committee on Homeland
Security and Governmental Affairs of the Senate describing the
actions taken by Executive agencies to establish competitive
procedures no later than 1 year after enactment.
Section 4: Report requirements relating to grants
This section requires the Director of the Office of
Management and Budget to issue guidance, no later than 90 days
after enactment of the Act, to Executive agencies instructing
each agency to identify amounts of undisbursed grant funding
remaining in expired accounts.
Further requires the Director to report to the Committee on
Oversight and Government Reform of the House of Representatives
and the Committee on Homeland Security and Governmental Affairs
of the Senate on the status and resolution of such funding no
later than 180 days after enactment.
This section also requires the Comptroller General of the
United States to submit to the Committee on Oversight and
Government Reform of the House of Representatives and the
Committee on Homeland Security and Governmental Affairs of the
Senate a report on the Federal grants workforce no later than
180 days after enactment. The report shall address such issues
as the size of the Federal grants workforce and expected trends
in Federal employment; adequacy of training opportunities for
the Federal grants workforce; whether the Federal Acquisition
Institute or any other existing entity engaged in acquisition
workforce training should be made available for grant training;
whether a warrant system similar to that used in the Federal
acquisition system should be established for Federal officials
authorized to award grants; the use by executive agencies of
suspension and debarment actions against grantees; and any
recommendations for improving the Federal grants workforce.
Defines the terms ``Executive agency'' and ``Federal grants
workforce.''
Section 5: Plan for improving the single audit process
Requires the Director of the Office of Management and
Budget to submit to the Committee on Oversight and Government
Reform of the House of Representatives and the Committee on
Homeland Security and Governmental Affairs of the Senate a plan
to improve the single audit process. The plan is to include a
proposed centralized Federal oversight structure for the single
audit structure, simplified single audit requirements for
smaller Federal awards, and a proposal to shorten the single
audit cycle. The plan must identify necessary legislative
changes and include key milestones.
Requires the Director of the Office of Management and
Budget to report on the implementation of each element of the
plan not later than 180 days after submission of the plan.
Explanation of Amendments
Mr. Cummings offered an amendment to strike the requirement
in section 3 of the bill in section 7404 that the name, title,
and employer of peer reviewers who have served as peer
reviewers in the previous six months. Chairman Lankford offered
a second degree amendment, striking ``name, title, and
employer'' in that provision and replacing it with ``employer
and, either the name and title, or a unique identifier.'' The
second degree amendment was agreed to by voice vote.
Committee Consideration
On November 17, 2011, the Committee met in open session and
ordered reported favorably the bill, H.R. 3433, as amended, by
voice vote, a quorum being present.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch where the bill relates to the terms and conditions of
employment or access to public services and accommodations.
This bill requires greater accountability in grantees' use of
grant funds; addresses the agency close-out process following
completion of the grant; and directs attention to the need for
a highly trained workforce to effectively award and administer
Federal grant funds. As such this bill does not relate to
employment or access to public services and accommodations.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the descriptive portions of this report.
Statement of General Performance Goals and Objectives
In accordance with clause 3(c)(4) of rule XIII of the Rules
of the House of Representatives, the Committee's performance
goals and objectives are reflected in the descriptive portions
of this report.
Federal Advisory Committee Act
The Committee finds that the legislation does not establish
or authorize the establishment of an advisory committee within
the definition of 5 U.S.C. App., Section 5(b).
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement as to
whether the provisions of the reported include unfunded
mandates. In compliance with this requirement the Committee has
received a letter from the Congressional Budget Office included
herein.
Earmark Identification
H.R. 3433 does not include any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Committee Estimate
Clause 3(d)(2) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs that would be incurred in carrying out
H.R. 3433. However, clause 3(d)(3)(B) of that rule provides
that this requirement does not apply when the Committee has
included in its report a timely submitted cost estimate of the
bill prepared by the Director of the Congressional Budget
Office under section 402 of the Congressional Budget Act.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the Committee has received
the following cost estimate for H.R. 3433 from the Director of
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, March 28, 2012.
Hon. Darrell Issa,
Chairman, Committee on Oversight and Government Reform, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3433, the Grant
Reform and New Transparency Act of 2011.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Jonathan
Morancy.
Sincerely,
Douglas W. Elmendorf,
Director.
Enclosure.
H.R. 3433--Grant Reform and New Transparency Act of 2011
H.R. 3433 would amend federal law pertaining to the
awarding of federal grants. The legislation would require that
federal agencies use merit-based award procedures in awarding
grants, unless those grants are block grants, formula grants,
or they are awarded according to some other standard required
by statute. The bill also would require additional reports.
CBO estimates that implementing changes to the grant-award
system as required under H.R. 3433 would cost less than $1
million annually over the 2012-2017 period, assuming the
availability of appropriated funds. Those costs would result
primarily from preparing reports and making the required
changes to agency Web sites. The bill also could affect direct
spending by agencies not funded through annual appropriations,
such as the Tennessee Valley Authority and Bonneville Power
Administration; therefore, pay-as-you-go procedures apply. CBO
estimates, however, that any net increase in spending by those
agencies would not be significant. Enacting H.R. 3433 would not
affect revenues.
Under current law, the agencies that award the most grants
provide them primarily as formula or block grants or use merit-
based procedures. Most of the provisions of H.R. 3433 would
continue those current practices. Based on information from
some of the largest grant-awarding agencies, CBO estimates that
implementing the bill would lead to a small increase in
administrative costs to oversee some award changes and to
prepare additional reports.
H.R. 3433 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Jonathan
Morancy. The estimate was approved by Theresa Gullo, Deputy
Assistant Director for Budget Analysis.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE V--GENERAL ASSISTANCE ADMINISTRATION
Chap. Sec.
Program Information...........................................6101
* * * * * * *
Grant Transparency Requirements...............................7401
* * * * * * *
CHAPTER 74--GRANTS TRANSPARENCY REQUIREMENTS
Sec.
7401. Definitions.
7402. Merit-based selection procedure requirements in awarding grants.
7403. Pre-award evaluation requirements.
7404. Website relating to Federal grants.
7405. Debriefing.
Sec. 7401. Definitions
In this chapter:
(1) Grant.--The term ``grant'' means an award of
Federal financial assistance through a grant agreement
or cooperative agreement making payment in cash or in
kind to a recipient to carry out a public purpose
authorized by law.
(2) Competitive grant.--The term ``competitive
grant'' means a grant entered into through the use of
merit-based selection procedures for the purpose of
allocating funds authorized under a grant program of an
Executive agency.
(3) Executive agency.--The term ``Executive agency''
has the meaning provided by section 105 of title 5,
except the term does not include the Government
Accountability Office.
(4) Board.--The term ``Board'' means the Recovery
Accountability and Transparency Board or any successor
entity.
(5) Proposal abstract.--The term ``proposal
abstract'', with respect to a grant proposal, means a
summary containing key elements of the grant proposal.
(6) Grant reviewer.--The term ``grant reviewer'',
with respect to a grant--
(A) means any individual who reviews,
evaluates, or participates in the decision to
select a grant applicant for award of the
grant; and
(B) includes--
(i) a peer reviewer;
(ii) a merit reviewer; and
(iii) a member of a technical
evaluation panel or board or a special
emphasis panel.
Sec. 7402. Merit-based selection procedure requirements in awarding
grants
(a) Merit-Based Selection Procedures Required.--
(1) In general.--Except as provided in paragraph (2),
an Executive agency shall use merit-based selection
procedures in awarding grants.
(2) Exception for certain grants.--An Executive
agency is not required to use merit-based selection
procedures in awarding a grant if the grant is a block
grant or formula grant for which Federal funds are
required to be allocated in accordance with a
distribution formula prescribed by law or regulation,
or any other grant in which the allocation methodology
for the grant funds is mandated by law.
(b) Requirement for Specific Merit-Based Selection
Procedures.--Each Executive agency shall establish and make
publicly available specific merit-based selection procedures
for each grant program of the agency required under subsection
(a) to use such procedures.
(c) Merit-Based Selection Procedures Described.--
(1) In general.--The merit-based selection procedures
required under subsection (a) shall promote the use of
competition, and may be tailored to the particular
requirements, objectives, and authorities of the
agency. The procedures may address matters such as
consideration of unsolicited proposals, standards for
obtaining a competitive pool of applicants, and
exceptions for safety, security, or other
circumstances.
(2) Specific matters included.--The merit-based
selection procedures required under subsection (a)
shall include, with respect to a grant, the following:
(A) Advance notification of the grant
opportunity.
(B) A clear statement of the purpose,
duration (including anticipated grant
continuations), and eligibility requirements of
the grant.
(C) A description of the manner in which
applications or proposals for the grant will be
evaluated, ranked, and selected for award,
including the weighting of any evaluation
factors or criteria that will be considered.
Sec. 7403. Pre-award evaluation requirements
(a) Evaluation Required.--Before awarding a competitive
grant, an Executive agency shall conduct an evaluation of the
ability of the prospective grantee to successfully carry out
the grant.
(b) Matters Covered.--The evaluation required by subsection
(a) shall include a review of the following:
(1) Financial management system.--The capability of
the financial management system of the applicant to
account for funds.
(2) Internal controls.--The internal financial and
administrative control systems of the applicant.
(3) Compliance with reporting.--The capability of the
applicant to comply with Federal reporting requirements
for recipients of Federal funds.
(4) Past performance and integrity.--The past
performance and record of integrity of the applicant.
(5) Other qualifications and competence.--The ability
of the applicant to successfully carry out the purposes
of the grant.
(c) Simplified Evaluation Procedure for Certain Applicants.--
In conducting the evaluation required under subsection (a) with
respect to an applicant, an Executive agency shall minimize the
burden on any applicant that has previously received a
significant volume of Federal grants, and shall consider any
existing findings with respect to that applicant under the
single audit process under chapter 75 of title 31 related to
the matters in subsection (b).
Sec. 7404. Website relating to Federal grants
(a) Requirement.--The Director of the Office of Management
and Budget shall upgrade any existing or proposed public
website for finding Federal grant opportunities and applying
for such grants so that such website may serve as a central
point of information and provide full access for applicants for
competitive grants. The website shall capture in one site, or
provide electronic links to, other relevant databases.
(b) Notice of Competitive Grant Funds Availability.--At the
time an Executive agency issues a solicitation or otherwise
announces the availability of funds for a competitive grant,
the agency shall post on the grants website maintained under
this section relevant information about the grant opportunity,
including the following:
(1) Announcement and purpose.--The grant announcement
and purpose of the grant.
(2) Grant period.--The time period for performance of
the grant and whether the agency anticipates that the
grant will be continued.
(3) Amount of available funds.--The amount of funds
available for the grant.
(4) Eligibility.--A statement of eligibility
requirements of the grant.
(5) Agency point of contact.--Contact information for
the Executive agency, including the name, telephone
number, and electronic mail address of a specific
person or persons responsible for answering questions
about the grant and the application process for the
grant.
(6) Evaluation factors or criteria.--A clear
statement of the evaluation factors or criteria that
the agency intends to use to evaluate and rank grant
applications or proposals submitted, including the
weight to be applied to each factor or criterion.
(7) Disclosure of the process and standards for
safeguarding against conflicts.--A description of the
process and standards to be used by the agency to
determine that each grant reviewer does not have a
prohibited conflict of interest, as defined by
applicable statute or regulation, with respect to the
evaluation or review of a grant application or
proposal, or the decision to award a grant.
(8) Deadline.--The deadline for submission of grant
applications or proposals.
(c) Use by Applicants.--The grants website maintained under
this section shall, to the greatest extent practicable, allow
grant applicants to--
(1) use the website with any computer platform;
(2) search the website for all competitive grants by
purpose, funding agency, program source, and other
relevant criteria;
(3) apply for a competitive grant using the website;
(4) manage, track, and report on the use of
competitive grants using the website; and
(5) provide all required certifications and
assurances for a competitive grant using the website.
(d) Grant Award Information.--
(1) In general.--For each competitive grant awarded
by an Executive agency, the agency shall post on the
grants website maintained under this section the
information described in paragraph (2). Except as
provided in paragraphs (2)(B) and (3), the information
shall be posted within 15 days after an Executive
agency notifies an applicant that the applicant has
been selected to receive a grant award and shall be
updated as necessary while the grant to the recipient
is being performed.
(2) Information posted.--For purposes of paragraph
(1), the information described in this section with
respect to each grant awarded by an Executive agency is
the following:
(A) Executed grant agreement.--A copy of the
final grant agreement, including the terms and
conditions and the time period for performance
of the grant.
(B) Copy of proposal, application, or plan.--
Subject to paragraph (3), a copy of any
proposal, application, or plan submitted for
the awarded grant, including any amendment to
the proposal, application, or plan (whether
made before or after the award of the grant).
(C) Award decision documentation and
rankings.--Documentation explaining the basis
for the selection decision for the grant, the
number of proposals received for the grant,
and, with respect to the proposal that resulted
in the grant award, the numerical ranking of
the proposal by grant reviewers, if numerical
rankings were assigned.
(D) Justification for deviating from
rankings.--In any case in which the award of
the grant is not consistent with the numerical
rankings or any other recommendations made by
grant reviewers, a written justification
explaining the rationale for the decision not
to follow the rankings or recommendations.
(E) Disclosure of peer reviewers.--The
employer, and either the name and title or a
unique identifier, of each individual who
served as a peer reviewer for the grant program
concerned, during the six-month period
preceding the award of the grant.
(F) Disclosure of other grant reviewers.--The
name, title, and employer of each individual
who served as a reviewer (other than a peer
reviewer) of proposals or applications for the
grant, regardless of whether the individual is
employed by the Federal government or not.
(3) Exception to posting requirement.--
Notwithstanding paragraphs (1) and (2)(B), if the head
of the agency determines, with respect to a particular
grant award, that posting the proposal, application, or
plan at the time described in paragraph (1) would
adversely affect an applicant, the agency--
(A) may post a proposal abstract or executive
summary; and
(B) shall post the complete proposal,
application, or plan by a date to be determined
by the head of the agency, in consultation with
the applicant, but not later than three years
after the date of the grant award.
(e) Grant Performance Information.--Unless otherwise
prohibited by law, with respect to each grant awarded by an
Executive agency, within 60 days after the end of the period
for completion of the grant, the agency shall post on the
grants website maintained under this section the following
information:
(1) The final report or other final written product
required under the terms of the grant.
(2) Other related data or results of the grant that
the agency considers to be of value to future
researchers or in the public interest.
(f) Submission and Publication of Grant Solicitation Forecast
on the Grants Website.--
(1) Requirement.--Not later than November 30 of each
year, the head of each Executive agency shall post a
forecast, in accordance with paragraph (2), of all
grant solicitations that the agency expects to issue
for the following calendar year. The forecast shall be
based on the best information available and shall not
be binding on the agency.
(2) Matters included.--The forecast shall include, to
the extent practicable, the following for each expected
grant solicitation:
(A) Subject and purpose.--A brief description
of the subject and purpose of the grant,
organized by the organizational unit of the
agency.
(B) Point of contact.--Contact information
for the organizational unit or individual
responsible for the grant, if known, including
name, telephone number, and electronic mail
address.
(C) Notice publication date.--The expected or
actual dates for the issuance of the grant
solicitation and application and the grant
application submission deadline.
(D) Award amount.--The estimated amount of
the average grant award, the estimated maximum
and minimum amounts of the grant award, if
applicable, and the estimated total number of
grant awards to be made.
(g) Publication of Information.--Nothing in this section
shall be construed as requiring the publication of information
otherwise exempt under section 552 of title 5, United States
Code (popularly referred to as the ``Freedom of Information
Act'').
(h) Transparency of Information.--To the extent practicable,
the grants website maintained under this section shall--
(1) make the information described in this section
available in its original format;
(2) make the information described in this section
available without charge, license, or registration
requirement;
(3) permit the information described in this section
to be searched and aggregated;
(4) permit the information described in this section
to be downloaded in bulk;
(5) permit the information described in this section
to be disseminated via automatic electronic means;
(6) permit the information described in this section
to be freely shared by the public, such as by social
media;
(7) use permanent uniform resource locators for the
information described in this section; and
(8) provide an opportunity for the public to provide
input about the usefulness of the site and
recommendations for improvements.
Sec. 7405. Debriefing
If requested by an applicant for a competitive grant, for
each grant award made in an amount in excess of $100,000
pursuant to a merit-based selection procedure, an Executive
agency shall provide the applicant with a timely debriefing
explaining the basis for the agency's award decision,
including, if applicable, the decision not to award a grant to
the applicant.
* * * * * * *
MINORITY VIEWS
H.R. 3433, the Grant Reform and New Transparency Act of
2011, would increase transparency in the competitive grant
selection process and would make several other positive changes
to current law. For example, the bill would require agencies to
post on a single website key information about grants they
award, including grant agreements, the criteria used to guide
the selection of grant recipients, and the numerical rankings
assigned to grant applications. The bill would also enable
grant applicants to request a debriefing from an agency if
their applications are not chosen to receive funding.
Colleges and universities--which comprise a significant
portion of the grant recipient community--have expressed
concern that posting their grant applications online could
provide competitors access to their proprietary information.
Although Rep. Connolly introduced an amendment that would have
allowed organizations to post grant abstracts instead of full
grant applications, the amendment was not adopted.
In addition, numerous organizations have written letters
expressing their desire to protect the anonymity of peer
reviewers. Although Rep. Murphy introduced an amendment to
strike the provision requiring the disclosure of peer
reviewers, the amendment also was not adopted.
Finally, some Members expressed concerns about the amount
of paperwork this bill would require for agencies and
organizations. In order to protect intellectual property, these
entities would be required to perform extensive redactions to
every grant application. Estimates suggest that the National
Science Foundation, for example, would be required to post more
than 150,000 pages of documents. At a time when federal agency
and university funding is declining significantly, it would not
seem prudent to impose such a labor-intensive requirement.
The majority indicated that they would work with the
minority to rectify these concerns.
Elijah E. Cummings.