[Senate Report 114-169]
[From the U.S. Government Publishing Office]
Calendar No. 303
114th Congress { } Report
1st Session { SENATE } 114-169
_______________________________________________________________________
GRANTS OVERSIGHT AND NEW EFFICIENCY ACT
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
to accompany
S. 1115
TO CLOSE OUT EXPIRED, EMPTY GRANT ACCOUNTS
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
November 30, 2015.--Ordered to be printed
_______
U.S. GOVERNMENT PUBLISHING OFFICE
WASHINGTON : 2015
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Keith B. Ashdown, Staff Director
Christopher R. Hixon, Chief Counsel
Patrick J. Bailey, Chief Counsel for Governmental Affairs
Gabrielle D'Adamo Singer, Deputy Chief Counsel for Governmental Affairs
Drew C. Baney, Professional Staff Member
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Mary Beth Schultz, Minority Chief Counsel
Peter P. Tyler, Minority Senior Professional Staff Member
Laura W. Kilbride, Chief Clerk
Calendar No. 303
114th Congress { } Report
1st Session { SENATE } 114-169
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GRANTS OVERSIGHT AND NEW EFFICIENCY ACT
_______
November 30, 2015.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
[To accompany S. 1115]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1115) to close out
expired, empty grant accounts, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill, as amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................3
IV. Section-by-Section Analysis......................................4
V. Evaluation of Regulatory Impact..................................4
VI. Congressional Budget Office Cost Estimate........................4
VII. Changes in Existing Law Made by the Bill, as Reported............5
I. PURPOSE AND SUMMARY
The purpose of S. 1115, the Grants Oversight and New
Efficiency Act (or ``GONE Act''), is to identify certain
expired grants. The bill as amended by a substitute amendment
requires the Office of Management and Budget (OMB) to direct
agencies, in coordination with the Secretary of Health and
Human Services (HHS), to provide to Congress a list of certain
expired grants held by federal agencies, and include a
description of the reasons why the listed grants have not yet
been closed. The expectation is that this identification will
help lead to a reduction in the number of expired grants that
have not been properly closed out from the financial payment
systems. This will improve financial accountability over grant
programs, and save taxpayer money on costs associated with
maintaining the grants in an open status.
II. BACKGROUND AND THE NEED FOR LEGISLATION
Delays by federal agencies in closing expired grants were
highlighted in an April 2012 report by the Government
Accountability Office (GAO).\1\ The GAO identified more than
eleven thousand grants that had remained active within two
major multiagency payments systems, even though the grants were
clearly inactive or past the end date of the grant period. In
fact, the report noted that 115 of these grants were ten years
past the end of the grant period. Further, the 2012 report
identified nearly $800 million in funding remaining in expired
grant accounts upon review of just two payment systems.\2\
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\1\U.S. Government Accountability Office, GAO-12-360, Grants
Management: Action Needed to Improve the Timeliness of Grant Closeouts
by Federal Agencies 19 (2012), available at http://gao.gov/assets/600/
590926.pdf.
\2\Id. at 11.
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There is a financial cost associated with maintaining a
grant in an open status, as opposed to closing the grant in a
timely manner. GAO reported that for one multiagency grant
payment system, the government was ``. . . charged a total of
roughly $173,000 per month to maintain the more than 28,000
expired grant accounts with zero dollar balances listed on the
year end closeout report.''\3\ GAO estimated that `` . . .
[o]verall, the total charges for all expired grants with a zero
dollar balance would represent roughly $2 million in fees if
agencies were billed for these accounts for the entire
year.''\4\ Furthermore, in another large payment system, GAO
``found that more than $126 million in undisbursed balances
remained in dormant grant accounts--accounts for which there
had been no activity for 2 years or more.'' The GAO report also
describes that delay in closing out grants means a higher risk
in conducting important financial control steps, decreasing the
ability to ensure accountability.\5\
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\3\Id at 19.
\4\Id.
\5\Id. at 11.
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On July 24, 2012, OMB issued a Controller Alert to federal
chief financial officers, which cited GAO's findings and
indicated ``. . . [a]gencies should take appropriate action to
closeout grants in a timely manner.''\6\ The alert was issued a
day before a Committee on Homeland Security and Governmental
Affairs Subcommittee on Federal Financial Management,
Government Information, Federal Services, and International
Security hearing that took place the next day on grants
management and the GAO's report.\7\ During that hearing, then-
OMB Controller Danny Werfel testified that he agreed with GAO's
position on the importance of improving the timeliness of grant
award closeouts and ensuring that there are proper internal
controls to oversee the grants.\8\
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\6\Office of Executive Councils, Chief Financial Officers Council,
Controller Alert, (June 10, 2015), available at https://cfo.gov/wp-
content/uploads/2015/06/GRANTS-MANAGEMENT-Action-Needed-to-Improve-the-
Timeliness-of-Grant-Closeouts-by-Federal-Agencies.pdf.
\7\Assessing Grants Management Practices at Federal Agencies:
Hearing Before the Subcomm. on Federal Financial Management, Government
Information, Federal. Services, and International Security of the
Senate Committee on Homeland Security and Governmental Affairs, 114th
Cong. (July 25, 2012).
\8\Id. (statement of Danny Werfel, OMB Controller).
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On December 26, 2013, OMB significantly revised its
guidance on the grants management process, which included a new
section on closeout.\9\ OMB indicated the need for updated
guidance to ``increase the efficiency and effectiveness of
Federal awards to ensure best use of the more than $500 billion
expended annually.''\10\ The OMB guidance reminded Federal
agencies that they should be closing out grants within 90
calendar days following the end date of the period of
performance.\11\
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\9\2 C.F.R. Sec. 200.454 (2015), available at http://www.gpo.gov/
fdsys/pkg/FR-2013-12-26/pdf/2013-30465.pdf.
\10\Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 78 Fed. Reg. 78,590, 78,590 (Dec. 26,
2013).
\11\Cong. Research Serv., R43726, Delayed Federal Grant Closeout:
Issues and Impact (Sept. 12, 2014) (on file with Committee Staff).
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There is little information available about the
implementation of this OMB guidance. Moreover, delays in grants
closeouts may, for many agencies, cost taxpayers unnecessary
fees for maintaining expired accounts, and, for all agencies,
can prevent the undisbursed funding from being returned to the
Treasury.\12\
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\12\Gov't Accountability Office, GAO-12-360, Grants Management:
Action Needed to Improve the Timeliness of Grant Closeouts by Federal
Agencies 18 (2012), available at http://gao.gov/assets/600/590926.pdf.
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This bill, as amended by a substitute amendment, would
address the need for improved information from federal agencies
by requiring all federal agencies within 180 days of enactment
to submit a report identifying certain grants that have not
been closed.
III. LEGISLATIVE HISTORY
The GONE Act was introduced in the 113th Congress by
Senator Deb Fischer. In the 114th Congress, Senator Deb Fischer
and original cosponsor Senator Joe Manchin III introduced S.
1115 on April 28, 2015. Senator Ron Johnson joined as a
cosponsor on June 11, 2015. The bill was referred to the
Committee on Homeland Security and Governmental Affairs. The
Committee considered S. 1115 at a business meeting on June 24,
2015.
During the business meeting, Senator Ron Johnson offered a
substitute amendment, as modified, that required HHS, rather
than the Council of the Inspectors General on Integrity and
Efficiency, to submit a report on grant closeouts. The
substitute amendment modified the reporting requirement so that
it required the identification of grants expired more than two
years, as well as making other technical changes. The modified
substitute amendment was adopted by voice vote with Senators
Johnson, McCain, Lankford, Ayotte, Ernst, Sasse, Carper,
Tester, Baldwin, and Heitkamp present.
Senator Johnson's second amendment modified the long title
of the bill, and was adopted by voice vote with Senators
Johnson, McCain, Lankford, Ayotte, Ernst, Sasse, Carper,
Tester, Baldwin, and Heitkamp present.
The Committee ordered the bill, as amended, reported
favorably by voice vote on June 24, 2015. Senators present for
the vote on the bill were Senators Johnson, McCain, Lankford,
Ayotte, Ernst, Sasse, Carper, Tester, Baldwin, and Heitkamp.
IV. SECTION-BY-SECTION ANALYSIS OF THE BILL, AS REPORTED
Section 1. Short title
This section provides the bill's short title, the ``Grants
Oversight and New Efficiency Act'' or the ``GONE Act.''
Section 2. Identifying and Closing Out Expired Grants
Subsection (a) requires the Director of OMB to direct
agencies to coordinate with the Secretary of HHS to submit to
Congress, within 180 days, a report on each agency's remaining
expired grant accounts. The agency's report must contain a list
of each covered grant held by the United States Government,
which is defined as a grant that is part of a government agency
payment system and has not yet been closed out, recommend which
covered grants should be closed, and explain why each covered
grant has not been closed out. Agencies can use any existing
multiagency data systems to complete the report. If an agency
is unable to provide the required information in the report,
there must be an explanation as to why, including any
shortcomings with existing grant data systems.
Subsection (b) requires the head of each agency to notify
the Secretary of HHS specifying if the agency has closed out
grant awards associated with all of the covered grants. The
head of the agency must notify the Secretary of HHS within a
year of submitting the report outlined in subsection (a), and
notify Congress within 90 days of notifying the Secretary of
HHS.
Subsection (c) defines the terms, ``agency,'' ``close
out,'' ``covered grants,'' and ``Secretary.''
V. EVALUATION OF REGULATORY IMPACT
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 31, 2015.
Hon. Ron Johnson, Chairman,
Committee on Homeland Security and Governmental Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1115, the GONE Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford, who can be reached at 226-2860.
Sincerely,
Keith Hall.
Enclosure.
S. 1115--GONE Act
S. 1115 would direct federal agencies to prepare reports on
their efforts to close out financial accounts for expired
federal grants. 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 the Department of Health and Human
Services (HHS) and Treasury payment systems and that
undisbursed grants totaled about $720 million in about 10,000
expired accounts. In 2012, the Office of Management and Budget
(OMB) advised that agencies should take appropriate action to
close out such accounts in a timely manner.
Under current law, agencies are required to track expired
grant accounts. CBO anticipates that under S. 1115, some
agencies' workloads would increase slightly. Based on
information from OMB and HHS, CBO estimates that implementing
S. 1115 would cost $8 million over the 2016-2020 period,
primarily for increased administrative costs related to the new
reports; such spending would be subject to the availability of
appropriated funds.
Enacting S. 1115 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
S. 1115 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
VII. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
Because this legislation would not repeal or amend any
provision of current law, it would make no changes in existing
law within the meaning of clauses (a) and (b) of paragraph 12
of rule XXVI of the Standing Rules of the Senate.
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