Office of Management and Budget

Grant Reform

Improving Outcomes by Reducing Red Tape for Financial Assistance

Posted by Beth Cobert on December 19, 2013 at 09:52 AM EST

The Office of Management and Budget today published new guidance that significantly reforms and strengthens Federal grant-making to improve outcomes for the American people while reducing bureaucratic red-tape.   The new guidance is a key component of the Administration’s larger effort to more effectively focus Federal grant resources on improving performance and outcomes while ensuring the financial integrity of taxpayer dollars.  By streamlining eight Federal regulations into a single, comprehensive policy guide, the government can better administer the $600 billion awarded annually for grants and other types of financial assistance by decreasing administrative burden for recipients and reducing the risk of waste, fraud and abuse.

The new uniform grants guidance improves on current policy by:

  •    Eliminating duplicative and conflicting guidance;
     
  • Focusing on performance over compliance for accountability;
     
  • Encouraging efficient use of information technology and shared services;
     
  • Providing for consistent and transparent treatment of costs;
     
  • Limiting allowable costs to make the best use of Federal resources;
     
  • Setting standard business processes using data definitions;
     
  • Encouraging non-Federal entities to have family-friendly policies;
     
  • Strengthening oversight; and
     
  • Targeting audit requirements on risk of waste, fraud, and abuse.

This guidance is the culmination of a two-year collaborative effort across the Federal government and its partners -- State and local governments, Indian tribes, research and higher education institutions, nonprofit organizations, and the audit community -- to rethink and reform the rules that govern our stewardship of Federal dollars. 

The reform effort embodies principles set forth by the President, who directed OMB to work with key stakeholders to evaluate potential reforms to Federal grants policies in Executive Order 13520 on Reducing Improper Payments and in the Presidential Memorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments.  In addition, OMB and its partners are continuing complementary work to strengthen program outcomes through innovative and effective use of grant-making models, performance metrics, and evaluation, as described in OMB Memorandum M-13-17 on Next Steps in the Evidence and Innovation Agenda.

Looking ahead, implementation of the new guidance will be spearheaded by the cross-agency Council on Financial Assistance Reform (COFAR), which worked closely with OMB on its development.  The COFAR will work with stakeholders to facilitate implementation, evaluate effectiveness, and keep this important reform effort moving forward.  We still have more to do, but we’re proud to announce these changes.  For more information, please visit www.cfo.gov/COFAR. 

Beth Cobert is the Deputy Director for Management of the Office of Management and Budget

See OMB Policy Statements for more information.

On November 20, 1999, the President signed Public Law 106-107 (6 pages, 110 kb), the Federal Financial Assistance Management Improvement Act. The purposes of this law are to:

  • improve the effectiveness and performance of Federal grant programs,
  • simplify grant application and reporting requirements,
  • improve the delivery of services to the public, and
  • facilitate greater coordination among those responsible for delivering such services.

The Administration shares the goal of simplifying Federal grants management and is committed to working to make it easier for State, Tribal and local governments, as well as nonprofit organizations, to apply for and report progress on Federal grants.

On May 18, 2001, 26 Federal grantmaking agencies presented a plan to Congress (71 pages, 757 kb) to simplify the application and reporting procedures used in their grant programs. The plan cuts across agencies, and is designed to reduce the differences that exist between programs of similar purpose. Each year the agencies report to OMB and the Congress on progress made to implement this plan.

The agencies have worked together to provide a common electronic portal at Grants.gov for organizations to find and apply for grant programs. Grants.gov is now the Federal Government's single site for grant-making agencies and organizations to publish grant funding opportunities and application packages online. Grants.gov enables the grant community, which includes over 1 million organizations, to search for grant opportunities, and download, complete and electronically submit applications for the over $400 billion worth of awards distributed annually.

The Chief Financial Officers Council, which represents the 24 largest agencies in the government, has established a Grants Policy Committee to lead implementation of Public Law 106-107. OMB provides oversight and technical assistance, as necessary. The Committee has formed workgroups of agency staff that work to accomplish the grants streamlining required by the legislation.

To learn more about this process, please visit the Grants Policy Committee's website home page.

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