Redefining the Business of Grants Management

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Redefining the Business of Grants Management

• Greater Use of Performance Measures to
• Evaluate and Manage Grants
• Jonathan D. Breul
• National Grants
  Management Association
• Annual Conference - April
  28, 2004

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Redefining the business of grants mgmt

• NGMAs conference theme is Redefining the
  business of grants management.
• A worthy challenge
• - Make grants, and grants management, more
  performance and results-oriented.
• How?
• - Explore opportunities to use performance goals
  and outcome measures in working with grantees to
  deliver improved results to the public.

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Background

• From the first time grants were awarded debate
  raged about the appropriate role of federal vs.
  state, local and non-profit grantees.
• The debate never stops.
• Most federal agencies have long used goals and
  measures in their work with states and
  localities.
• Developments in information technology
  dramatically reducing the costs of gathering,
  organizing, analyzing, and disseminating
  information suggest it is timely to assess how
  past management practices should be changed to
  take advantage of these developments.

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Government Performance and Results Act

• This years marks the 10th anniversary of GPRA.
• Authors hoped that strategic and annual plans and
  reporting on performance outcomes would change
  the way government does business.
• Intent was to encourage program managers,
  budgeters, and policy makers to increase the use
  of performance and outcome information in their
  decision making processes.
• Requires federal agencies to provide annual data
  on the outcomes of each major federal program in
  annual performance plans and annual performance
  and accountability reports.
• GPRA places the issue of performance squarely on
  the agenda of every federal program that depends
  heavily on grantees to accomplish its objectives.

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Grant programs

• A major issue debated during the drafting of GPRA
  was how to treat federal agencies that relied
  heavily on state, local and non-profit partners
  in implementing grant programs.
• How could federal agencies set goals, measures
  and performance targets and beheld accountable
  by Congress for meeting them in policy areas
  where the federal government is only one or a
  range of players and sometimes not even the
  dominant player?
• Sometimes federal laws actually prohibit agencies
  from setting or collecting performance measures
  (i.e., many block grants).
• In some cases, federal agencies are constrained
  by law from taking action to improve state
  performance (such as mandating state motorcycle
  helmet laws).

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Since then, what has happened?

• Temporary Assistance for Needy Families (TANF)
  now requires outcome-based performance measures
  for employment training and welfare-to-work.
• Workforce Investment Act requires States and
  local areas to measure the success of the
  Department of Labors WIA-authorized workforce
  development.
• National Environmental Performance Partnership
  System (NEPPS) States and EPA jointly agree on
  measuring for assessing state performance and
  greatly increase public access to information
  about state environmental performance and their
  plans to improve it.
• No Child Left Behind demands progress and
  achievement from all parties receiving federal
  funds from the Department of Education.

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Also, a decade of procurement reform

• Sweeping changes to the way government manages
  contracts.
• Expanded use of performance-based contracting
• Setting clear goals, using performance measures,
  and offering performance incentives, and
• Decisions based on results to be achieved by
  procurement rather than activates funded in a
  contract.
• Recently, Services Acquisition Reform Act (SARA)
  stronger procurement tools to save money while
  improving operations.
• And now, Share-in-Savings contracts.

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Four attributes of performance contracts

• Requirements are described in terms of results
  rather than the methods of performance of the
  work.
• Measurable performance standards are set.
• The contractors performance is evaluated via a
  quality assurance plan.
• Positive and negative incentives are defined.

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The rules of the game are changing

• The Volcker Commission continues the call for
  performance-driven public management.
• The new Department of Homeland Security is
  required by statute to develop performance
  measures.
• DHS and DoD are developing performance-based pay
  systems.

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Program Assessment Rating Tool (PART)

• In 2002, OMB introduced the PART.
• Questionnaire to assess the management and
  program performance of every federal program over
  a five-year period.
• Assesses each program on four components
  (purpose, planning, management, and results).
• Gives a score for each of the component.
• The scores are weighted with results carrying
  the greatest
• (50 percent) of the overall score.

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Overall scores in the FY 2005 Budget
Source Budget of the United States Government,
FY 2005
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Scores by program type
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Scores for grants in the FY 2005 Budget

• 46 rated Results Not Demonstrated (43.2
  billion)
• 2 rated Effective (5.4 billion)
• 20 rated Moderately Effective (55.3 billion)
• 22 rated Adequate (19.0 billion)
• 10 rated Ineffective (10.3 billion)
• Source Budget of the United States
  Government, FY 2005

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Ratings of the largest five grant programs

• DOT Highway Infrastructure (29.8 billion)
  Moderately Effective
• HUD Housing Vouchers (12.5 billion)
  Moderately Effective
• Education IDEA Grants to States (8.9 billion)
  Results Not Demonstrated
• HHS Head Start (6.7 billion) Results Not
  Demonstrated
• USDA National School Lunch (6.4 billion)
  Results Not Demonstrated

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How are grant programs doing?

• 100 of the programs assessed so far are primarily
  grants to states and local governments.
• 46 percent received a rating of Results Not
  Demonstrated.
• Higher than for all programs (which on average
  scored 37 percent).
• Rating might be explained in part because of the
  breadth of the purpose of some grants, lack of
  agreement among grantees and federal parties on
  the purpose and performance measure(s), and
  therefore lack of focused planning to achieve
  common goals.
• Grant programs may have to work harder than other
  program types to define results, achieve them,
  and demonstrate them.
• Scores suggest a need for greater emphasis on
  grantee accountability for achieving overall
  program goals.

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Old ways of doing business

• Hyper-control and ruleboundedness.
• Tight administrative and procedural restrictions
  (budget control, prior approvals, etc.).
• Overly detailed and demanding application,
  planning, reporting and auditing requirements.
• Focus on preventing wrongdoing.
• Lack of attention to results.

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New ways of doing business

• Grants management attention shifts from
  activity-control to performance and results.
• Cultural shift from command-and-control
  approaches to grantee management.
• Grantees offered greater flexibility for how work
  is done in exchange for more accountability for
  outcomes and results.
• Greater focus placed on outputs and outcomes.
• Reporting requirements on processes and
  activities streamlined or replaced with
  mechanisms for performance review and evaluation.
• Payments tied to milestones and accomplishments
  not simply level of effort.
• Grantors and grantees share best practices.

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Application to grants can be very difficult

• Inadequate availability of adequate performance
  measures and data.
• Many of the factors contributing to outcomes are
  beyond the control of grantees.
• Ever present danger posed by perverse incentives
  resulting from improperly aligned performance
  measures.

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Use by States and localities

• Performance-based contracting seems to be more
  frequently used in State and local government
  contracting.
• Service Effort and Accomplishment (SEA)
  accounting rules provide greater clarity as to
  what constitutes performance accountability.
• State and local governments have greater freedom
  to experiment with performance-based contracting.

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Pre-Award

• Develop performance metrics based on program
  goals and outcomes.
• Ensure the programs annual performance plans
  describe the relationship between the broad
  programmatic objectives in the Department/Agency
  strategic plan and the program outcomes.
• Request applicants submit evaluation plans and
  metrics as part of the application and consider
  these plans in the review process.
• Include metrics in solicitations and resulting
  awards.

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Award decision making

• Develop and implement policies for collection and
  use of grantee past performance.
• Consider past performance in funding decisions
  and funding levels.
• Look for ways to link them to a defined portion
  of an award fee or fixed price (performance-based)
  award.
• Include clear program and project outcome
  statements in each award.

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Post-Award

• Require grantees to report progress against
  program performance outcome metrics instead of
  process and activity reporting.
• Start holding grantees accountable for results.
• Consider performance metrics in go/no-go and
  follow-on funding decisions (continuations,
  etc.).

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Some questions for NGMA

• Time to rethink and reform federal grants
  management?
• Focus greater attention on performance and
  outcome measures to evaluate and manage federal
  grants?
• Begin a dialogue among policy makers, recipients
  and legislators?
• Role for NGMA as a agent for forward-looking
  innovation and change?
• Lead an important cultural shift in the business
  of grants management?