Grant funding is a hallmark of U.S. higher education. Federal government funding has contributed innumerable advances in science, health care and the country’s general well-being. It has become an economic driver for institutions and their communities.
Such funding is not without its critics, however. As a component of the federal budget, grant awards face unprecedented scrutiny. Elected officials and policymakers seek assurances that the awards are producing benefits but are stymied by diverse financial and performance reporting.
Calls for Transparency
Nowhere have calls for accountability and transparency been greater than in the $4 trillion annual federal government expenditures. In 2014, Congress unanimously enacted the Digital Accountability and Transparency Act (DATA Act, Pub. L. 113-101). Under the purview of the Office of Management and Budget (OMB) and the U.S. Treasury, the act launched an ambitious effort to standardize governmentwide financial and expenditure reporting, suitable for uploading to a central repository accessible by the public. Operational since May 2017, the Government Accountability Office (GAO) has reported favorably on the effort, but noted that fewer than 1 percent of agency grant, contract and award data was acceptable.
While still a work in progress, the repository’s success represents the promise and influence of open data initiatives. Made possible through the application of streamlined and standardized business processes and mature information technology applications and analytics, open data adoption is delivering tangible advancements towards desired accountability and transparency across the public sector.
Implications for Higher Education
While the DATA Act did not explicitly encompass grant reporting, it does contain provisions to extend its scope. The act directed the OMB to launch a pilot project examining how grant reporting could be added to the original mandate. Grant funding of the Department of Health and Human Services served as the pilot, which ended in May 2017. All stakeholders should consider OMB’s Report to Congress on the pilot project required reading. OMB will announce by August 2018 its recommendations to extend the DATA Act’s provisions to federal grants.
Given the insatiable demand for accountability of federal dollars, one can anticipate the DATA Act’s application to federal grants. The diversity of grants, goals and number of stakeholders makes the task daunting. Veteran grants administrators have experienced many reform efforts. Almost all have resulted in additional regulatory oversight and increased administration costs.
Federal Grant Reporting
Complexity inherent in the federal grant enterprise makes wholesale changes to its administration a challenge of the highest order. To accommodate central reporting will require a fundamental overhaul of thousands of granting programs across hundreds of federal agencies. Designed for specific purposes, these programs have grown organically. The resulting data silos often lack integration into a host agency’s accounting process, let alone provide comparable data to other agencies. Distinctiveness, supported by long-standing laws, directives and regulations has necessitated a large bureaucracy to monitor, audit and record reports of awardees.
Awardees’ performance reports, themselves, present a special challenge. Even though the reports are submitted electronically, they mimic earlier paper submissions. Diverse reporting requirements make aggregation of finances challenging; the accompanying narratives in aggregate are analytically impregnable. This lack of aggregation and an inability to make performance reporting readily understandable has generated a flurry of increasingly burdensome reporting requirements. All parties are creaking under the burden.
In addition to growing administrative support, recipient institutions have turned to automated systems. While the number of U.S. higher education institutions likely exceed the estimated 25 percent of all federal grant recipients who use dedicated grant software, post-award reporting represents some of the most problematic software applications in higher education administrative systems. This is hardly surprising given that such software must address frequently changing disparate data collection and reporting requirements from thousands of grant programs.
Few higher education grants managers question the need for massive change and recognize the long-term benefits of standardization to achieve open data goals. Experience suggests caution. Managers bear the scars of promised improvements as well as numerous unfunded mandates. Their concerns are legitimate. Indeed, in February, U.S. Representatives Virginia Foxx, R-N.C., and Jimmy Gomez, D-Calif., introduced a bill, HR 4887, in Congress to provide closer guidance in the development of a comprehensive, standardized data structure for reporting federal awards data.
Prospects for Reform
Given the early success of the DATA Act, the widespread enthusiasm and support for the open data movement, the mature technology to facilitate such change, and the unsustainability of the current environment, one anticipates the present effort to move forward. Such change will occur. It is not a matter of if, but when.
While optimistic timelines will slip, all parties must understand there is no shortcut for coordinated, fundamental business process unification across the federal agency grants programs. The greatest threat to reform is the persistent, yet fully discredited, “magic bullet” belief in technology application without fundamental business process change. Grants managers, policymakers and software companies and implementers must guard against such shortsightedness. The opportunities are too great; the stakes are too high.