[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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

                  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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \8\Id., at 18.
    \9\Id., at 19.
    \10\Id.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \11\GAO, at 11.
    \12\Id., at 19.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.

                                  [all]