[House Report 114-264]
[From the U.S. Government Publishing Office]
114th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 114-264
======================================================================
GRANTS OVERSIGHT AND NEW EFFICIENCY ACT
_______
September 18, 2015.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Chaffetz, from the Committee on Oversight and Government Reform,
submitted the following
R E P O R T
[To accompany H.R. 3089]
[Including cost estimate of the Congressional Budget Office]
The Committee on Oversight and Government Reform, to whom
was referred the bill (H.R. 3089) to close out expired grants,
and for other purposes, having considered the same, report
favorably thereon with an amendment and recommend that the bill
as amended do pass.
CONTENTS
Page
Committee Statement and Views.................................... 1
Section-by-Section............................................... 4
Explanation of Amendments........................................ 5
Committee Consideration.......................................... 5
Roll Call Votes.................................................. 5
Application of Law to the Legislative Branch..................... 5
Statement of Oversight Findings and Recommendations of the
Committee...................................................... 5
Statement of General Performance Goals and Objectives............ 5
Duplication of Federal Programs.................................. 5
Disclosure of Directed Rule Makings.............................. 5
Federal Advisory Committee Act................................... 6
Unfunded Mandate Statement....................................... 6
Earmark Identification........................................... 6
Committee Estimate............................................... 6
Budget Authority and Congressional Budget Office Cost Estimate... 6
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Grants Oversight and New Efficiency
Act'' or the ``GONE Act''.
SEC. 2. IDENTIFYING AND CLOSING OUT EXPIRED GRANTS.
(a) Expired Grant Report.--
(1) In general.--Not later than 180 days after the date of
the enactment of this Act, the Director of the Office of
Management and Budget shall instruct the head of each agency,
in coordination with the Secretary, to submit to Congress and
the Secretary a report, not later than December 31 of the first
calendar year beginning after the date of the enactment of this
Act, that--
(A) lists each covered grant held by such agency;
(B) recommends which of the covered grants described
in subparagraph (A) should be closed out; and
(C) for each covered grant, explains why the covered
grant has not been closed out.
(2) Use of data systems.--An agency may use existing
multiagency data systems to prepare the report required under
paragraph (1).
(3) Explanation of missing information.--If the head of an
agency is unable to submit all of the information required to
be included in the report under paragraph (1), the report shall
include an explanation of why the information is not available,
including any shortcomings with existing grant data systems.
(b) Notice From Agencies.--
(1) In general.--Not later than 1 year after the date on
which the head of an agency submits the report required under
subsection (a), the head of the agency shall provide notice to
the Secretary specifying whether the head of the agency has
closed out grant awards associated with all of the covered
grants.
(2) Notice to congress.--Not later than 90 days after the
date on which all of the notices required pursuant to paragraph
(1) have been provided or March 31 of the calendar year
following the calendar year described in subsection (a)(1),
whichever is sooner, the Secretary shall compile the notices
submitted pursuant to paragraph (1) and submit to Congress a
report on such notices.
(c) Definitions.--In this section:
(1) Agency.--The term ``agency'' has the meaning given that
term in section 551 of title 5, United States Code.
(2) Closed out.--The term ``closed out'' means the closeout
of a grant account conducted in accordance with section 200 of
title 2, Code of Federal Regulations, including section 200.343
of such title, or any successor thereto.
(3) Covered grant.--The term ``covered grant'' means a grant
in a Federal agency cash payment management system held by the
United States Government for which--
(A) the grant award period of performance, including
any extensions, has been expired for not less than 2
years; and
(B) the grant has not been closed out in accordance
with section 200.343 of title 2, Code of Federal
Regulations, or any successor thereto.
(4) Secretary.--The term ``Secretary'' means the Secretary of
Health and Human Services.
Committee Statement and Views
PURPOSE AND SUMMARY
H.R. 3089, the Grants Oversight and New Efficiency (GONE)
Act brings greater efficiency to the federal grant cycle by
requiring agencies to identify expired grant accounts for
closure.
The bill requires agencies to coordinate with the Secretary
of Health and Human Services (HHS) to submit to Congress a
report that (1) lists each covered grant\1\ held by that
agency, (2) identifies grants for closure, and (3) explains why
the covered grants have not been closed. One year after
submission of the report, HHS will report to Congress on the
status of the grants identified for closure.
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\1\The bill defines a ``covered grant'' as a grant within a federal
agency cash payment management system that has been expired for at
least two years and has not been closed out.
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BACKGROUND AND NEED FOR LEGISLATION
In fiscal year 2014, the federal government's outlays for
grants to state and local governments totaled $529.9
billion.\2\ A 2012 Government Accountability Office (GAO)
report found that over $794 million in undisbursed balances
remained in HHS' Payment Management System (PMS) across 10,548
expired grant accounts.\3\ The report also identified more than
28,000 expired grant accounts\4\ in PMS with zero undisbursed
funds remaining in them.\5\ Additionally, GAO noted that there
is over $126 million in undisbursed balances in dormant
accounts\6\ in the Automated Standards for Application of
Payments (ASAP), amounting to nearly $1 billion in undisbursed
grant balances within PMS and ASAP.\7\
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\2\Office of Mgmt. and Budget, Fiscal Year 2016 Historical Tables,
Table 12.1 (Feb. 2, 2015).
\3\Gov't Accountability Office, Grants Management: Action Needed to
Improve the Timeliness of Grant Closeouts by Federal Agencies, at 11
(Apr. 2012) (GAO-125-360) (hereinafter ``GAO''). PMS is a grants
database that is housed at HHS.
\4\The GAO report defines an expired grant account as one that is
open more than three months after the grant end date and that has had
no disbursement in the previous nine months. HR 3089, however, only
examines grant accounts that have been expired for at least two years.
\5\GAO, at 19.
\6\A dormant account is one that has been inactive for two years or
more.
\7\GAO, at 20. ``ASAP is an all-electronic payment and information
system developed jointly by the Bureau of the Fiscal Service and the
Federal Reserve Bank.'' The Fed operates the system. See Bureau of the
Fiscal Service, U.S. Dept. of the Treasury, Automated Standard
Application for Payments (ASAP), available at https://
www.fiscal.treasury.gov/fsservices/gov/pmt/asap/background.htm (last
visited Aug. 21, 2015).
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Expired grant accounts cost agencies money. For example,
the Program Support Center (PSC), which operates PMS, charges
fees to the grant awarding agencies for each account it
operates.\8\ As a result, PSC charged agencies approximately
$173,000 per month in fees for the more than 28,000 expired
grants with no funds remaining in them in fiscal year 2011.\9\
Further, the total annual charges--assuming the accounts are
maintained for an entire year--are approximately $2
million.\10\ These funds could arguably be used to support
critical mission needs or returned to the Treasury.
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\8\Id., at 18.
\9\Id., at 19.
\10\Id.
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The GONE Act addresses the issues associated with expired
grant accounts by requiring agencies to identify expired
accounts that should be closed, and explain why those accounts
have not yet been closed. The bill requires agencies to report
to Congress a year after identifying these grants to detail the
progress made with respect to closure. This process will bring
greater accountability to the closeout portion of grants
administration.
H.R. 3089 mandates that HHS coordinate with agency heads in
submitting reports to Congress. HHS was chosen for this role
because of its grants volume and its efforts to improve grant
closeout practices within the agency. According to GAO's
report, HHS is the largest grant-making agency and is
responsible for about three-fourths of all undisbursed funds in
expired PMS accounts.\11\ HHS is also responsible for 79
percent of expired grant accounts with no funds in PMS.\12\
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\11\GAO, at 11.
\12\Id., at 19.
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In her testimony submitted for a Senate Subcommittee
hearing in February of 2011, then-HHS official, Nancy
Gunderson, explained that HHS developed an Accelerated Closeout
Team that resulted in the deobligation of $116 million across
2,700 grant awards during the 2011 calendar year.\13\ Ms.
Gunderson also stated that HHS was successful in closing out
42.5 percent of the 60,722 HHS grants ready for closeout in PMS
during fiscal year 2011.\14\ Again, due to HHS's successful
closeout efforts and the agency's large share of total grants,
the GONE Act utilizes HHS as the coordinating agency for its
reporting.
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\13\Assessing Grants Management Practices at Federal Agencies:
Hearing Before the S. Comm. on Homeland Sec. & Governmental Affairs,
Subcomm. on Fed. Financial Mgmt., Gov't Info., Fed. Serv. and In'l
Security, 112th Cong. (July 25, 2012) (written statement of Nancy J.
Gunderson, Deputy Assistant Secretary for Grants and Acquisition Policy
and Accountability, Dep't. of Health & Human Serv., at 3).
\14\Id.
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The GONE Act will bring needed accountability and oversight
to grants administration. The bill is another step toward
improving the grants closeout process to reduce inefficiency
and waste within government.
LEGISLATIVE HISTORY
H.R. 3089, the Grants Oversight and New Efficiency (GONE)
Act, was introduced by Congressman Tim Walberg (R-MI) on July
16, 2015, and referred to the Committee on Oversight and
Government Reform. Congresswoman Brenda Lawrence (D-MI) is an
original cosponsor.
Similar legislation, S. 1115, was introduced in the Senate
on April 28, 2015, by Senator Deb Fischer (R-NE), and referred
to the Senate Committee on Homeland Security and Governmental
Affairs. On June 24, 2015, the Senate Committee on Homeland
Security and Governmental Affairs ordered S. 1115 reported
favorably, with an amendment.
Sen. Fischer introduced an identical bill, S. 1792, in the
113th Congress, that was referred to the Senate Committee on
Homeland Security and Governmental Affairs. No further action
was taken.
Section-by-Section
Section 1. Short title
Designates the short title of the bill as the Grants
Oversight and New Efficiency (GONE) Act.
Section 2. Identifying and closing out expired grants
Mandates that no later than 180 days after passage, the
Director of the Office of Management and Budget (OMB) shall
direct each agency head to coordinate with the Secretary of the
Department of Health and Human Services (HHS) to submit to
Congress and HHS a report listing each covered grant held by
the federal government. Covered grants are those within the
cash payment management system that have been expired for two
or more years and have not been closed out. The report is to
recommend which covered grants should be closed and why each
covered grant has not been closed. The report is to be issued
not after December 31 of the first calendar year beginning
after enactment.
Agencies that cannot submit the required information must
report why such information is not available and explain any
shortcomings with their grant data system.
No later than one year after the head of an agency submits
its report, the agency head will notify HHS whether the agency
has closed out the covered grants discussed in its report. HHS
is required to compile this information and provide it
Congress.
Explanation of Amendments
Congressman Walberg offered an amendment in nature of a
substitute to clarify the intent of the bill. The amendment in
the nature of a substitute was adopted by voice vote.
Committee Consideration
On July 22, 2015, the Committee met in open session and
ordered reported favorably the bill, H.R. 3089, as amended, by
voice vote, a quorum being present.
Roll Call Votes
No recorded votes were taken during Full Committee
consideration of H.R. 3089.
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 outlines measures to close out expired grants. As
such, it 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
goal or objective of the bill is to close out expired grants.
Duplication of Federal Programs
No provision of this bill establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The Committee estimates that enacting this bill does not
direct the completion of any specific rule makings within the
meaning of 5 U.S.C. 551. However, the Director of the Office of
Management and Budget is directed to issue guidelines.
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
This bill 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)(1) 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
this bill. However, clause 3(d)(2)(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 of
1974.
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 this bill from the Director of
Congressional Budget Office:
H.R. 3089--GONE Act
H.R. 3089 would direct federal agencies to prepare reports
on efforts to close out financial accounts for federal grants
that have expired. Grant accounts are closed when all
administrative actions have been completed by the non-federal
entity. Those actions may involve additional payments to
grantees or payments from the grantee to the federal
government.
Under current law, agencies are required to track expired
grant accounts. CBO anticipates that under H.R. 3089, some
agencies' workloads would increase slightly to prepare reports.
Based on information from the Office of Management and Budget
(OMB) and the Department of Health and Human Services (HHS),
CBO estimates that increased administrative costs related to
those reports would total $8 million over the 2016-2020 period;
such spending would be subject to the availability of
appropriated funds.
Enacting H.R. 3089 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
Information on the USASpending website, maintained by the
Treasury Department, indicates that the government has awarded
almost $600 billion annually in grants over the past five
years. In 2012, the Government Accountability Office reported
that about 80 percent of all grants are provided through
payment systems of HHS and the Treasury; undisbursed grants
totaled about $720 million in about 10,000 expired accounts
that year. In 2012, OMB advised that agencies should take
appropriate action to close out such accounts in a timely
manner.
H.R. 3089 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
On July 31, 2015, CBO transmitted a cost estimate for S.
1115, the GONE Act, as ordered reported by the Senate Committee
on Homeland Security and Governmental Affairs on June 24, 2015.
The two bills are similar, and the estimated costs are the
same.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Assistant
Director for Budget Analysis.
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