GAO Report on

June 30, 2011 § Leave a comment

On May 6, 2011, the Government Accountability Office (GAO) released “ Additional Action Needed to Address Persistent Governance and Funding Challenges,” which presents the GAO’s findings from a study of the governance and funding challenges being experienced by GAO examined the key factors the Department of Health and Human Services (HHS), as managing partner for, should consider when proposing a funding model for and how the governance bodies could address’s governance challenges, which were highlighted in the 2009 GAO report “Grants Management: Has Systemic Weaknesses that Require Attention.”

To conduct this study, GAO reviewed available reports and other documented evidence and interviewed relevant officials from the Office of Management and Budget (OMB), HHS, and the Grants Executive Board (GEB). In addition, GAO reached out to the managing partners of three other E-Government (E-Gov) initiatives to document their experiences in the areas of funding and governance including the Department of Labor (DOL), Department of Homeland Security (DHS), and General Services Administration (GSA). Below is a summary of the GAO’s findings surrounding’s governance and funding structures.

Governance’s management consists of the following bodies:

  • Managing Partner Agency (HHS):  Manages the system and coordinates agency involvement in managing and developing procedures supporting the use of the system
  • GEB: Cross agency body consisting of 26 grant-making agencies that helps coordinate agency involvement in managing by providing strategic leadership and resources to
  • Program Management Office (PMO): Provides day-to-day management of the initiative and its budget

In their 2009 report on’s system issues, the GAO highlighted persistent governance challenges including unclear roles and responsibilities among the governance entities, lack of key performance metrics, and communication with stakeholders. Although some progress has been made, the GAO found during its most recent review of that the governance challenges identified two years ago continue to impact the initiative. Many of these governance challenges are addressed in the federal grants community’s recent proposal for a new federal grants governance model, which is currently under OMB review.  The proposed governance model creates a single point of contact between grant-making agencies and OMB to help encourage clear direction and communication and fosters involvement of the grantee and applicant community.

Funding is funded by contributions from the 26 grant-making agencies of the GEB. Memoranda of Understanding (MOUs) between the PMO and the partner agencies establish the amount and timing of the contributions to be made and the services to be provided. Each year the GEB votes on the budget and algorithm. Agency charges are based on the following three factors: agency size based on total dollar value of discretionary grants (20% of the total budget); number of grant opportunities posted on by an agency (40% of the total budget); and number of grant applications submitted on an agency opportunity (40% of the total budget).

Based on its review of the funding model, GAO found three main challenges with the funding structure:

  • contribution calculation does not result in consistent amounts for agencies with similar system use, which goes against federal cost accounting standards that state that costs should be assigned as closely as possible based on the amount of services or goods provided
  • does not track and report on certain key costs and charge partner agencies for all known costs outside of internal management purposes to ensure contract compliance and the initiative is staying within its approved budget
  • PMO lacks effective strategies to manage known, recurring collection delays, which often lead to adverse effects on the system early in the fiscal year


Although several proposals are under consideration that will impact, including merging the system into the Integrated Acquisition Environment and establishing a single, government-wide grants governance body, the GAO noted that neither of the proposals fully address the challenges being experienced by

In order to address the identified governance and funding challenges, the GAO made the following four recommendations to the Secretary of HHS:

  • Work with the GEB to improve the allocation of costs among users by implementing a funding model that clearly links agency contributions to system usage
  • Build on existing cost-tracking capabilities to expand cost information and communicate that information with contributing agencies, including capturing and charging for services provided
  • Link the strategic plan to an annual operating plan that links costs and spending to performance metrics
  • Build on recent outreach efforts and engage in knowledge sharing with managing partners of other E-Gov initiatives

These recommendations aim to improve economic efficiency and support effective management of to ensure the system remains a valuable tool for grant-making agencies and the applicant and grantee communities.


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