It may not come as a surprise that many programs supported by grants, such as K-12 education, have experienced declines in performance during the COVID pandemic. Many students couldn’t attend class in person, many patients couldn’t access preventive healthcare, and the interactions between publicly funded service providers and beneficiaries have not produced the results that were delivered prior to COVID, according to the 2021 Annual Grants Survey conducted by REI Systems, George Washington University, and the National Grants Management Association (NGMA). Over 80% of federal respondents to the survey indicated that grant recipient outcomes fell or could not be measured in 2021, compared to just 33% in 2020, with most of that change taking place among those who could not measure performance. So perhaps the biggest impact of the pandemic was that grant managers are much less able to measure performance, and presumably to ensure or reward performance as well.

The Annual Grants Survey, with details available here, brought several other important findings, as well:

• Grant managers note that they were forced to change how they do business in several ways, and that those changes are likely to be permanent.
• Well-trained, highly qualified grant managers continue to be the most important key to success, but most organizations do not set standards, develop certifications, or require training.
• Compliance monitoring absorbs the most time of any grant manager task, and self-reported “administrative costs” are rising, but those may not be bad things.
• While satisfaction with using grants technology has increased, emerging technologies such as blockchain and artificial intelligence are not yet being adopted

The performance trough accompanying COVID: Some patience now, followed by surge of expectations

First, a bit of detail on the performance topic. Federal agency respondents reported the biggest drop in performance of grant recipients (the above-noted decline of nearly 50 percentage points). In contrast, state/local and non-profit entity respondents actually reported improved mission performance. In a panel discussion of grants experts at REI and GWU’s Grants Management Breakfast on March 10th, State grant manager Sarah Longshore indicated that, in K-12 education, no one was surprised to see student achievement slow and/or decline due to the remote learning experience in the first year of the pandemic. In fact, record additional funding has been devoted to education in the last year or so, in an attempt to stem the tide of that decline, but she reports heightened expectations driven precisely by this “once-in-a-generation” infusion of funding. And she expects that there will be a strong expectation for measurable improvements in student performance as a result. This could likely be a trend for which grant managers should be ready: Some patience with the challenges brought by the pandemic, and some increased funding in many areas, but high-stakes expectations for demonstrable improvement that will require grant managers to both achieve those improvements, and prove that they have done so. If not, they risk losing public confidence, as well as future funding from legislatures and political executives.

COVID has changed how grants are managed, in ways that will become permanent

Our survey found that grant managers have been forced to change how they do business, and that they expect those changes to be permanent. In particular, managers identified changes that have included:

• Virtual meetings and communication.
• Virtual funding application reviews, and field site visits for both compliance verification and technical assistance.
• Remote work by grant managers and service providers.
• More online learning, assistance and content.
• More access to online grant payments and reporting.

Remote delivery of mission services was not nearly so prominent, although some effort to expand were cited, for example including telehealth patient contact. Of the survey respondents who said their organization’s operations had changed as a result of COVID, 82% said the changes will persist beyond the pandemic.

Few organizations require grants management training; even fewer require certification

More than 65% of survey respondents identified “well-qualified grants management staff” as one of the three most significant factors in their organization’s success, a greater proportion than any other factor. Yet fewer than 50% of organizations that employ respondents to our survey require that their staff receive any grants management training, and just less than 20% require any sort of certification from their staff. Happily, this latter figure is up significantly from 11% last year.

Despite a strong agreement that well-trained, highly qualified grant managers are an important key to success, no one is stepping up to set standards, develop a certification, or require training. In other fields, such as accounting or procurement, a certification is available and required for some roles (for example, a certified public accountant, or a warranted government contracting officer). In those cases, there is typically an established requirement for continuing professional education to maintain the credential, and the credential is a requirement for certain responsible positions in the field. Further, a distinct entity, such as the American Institute of Certified Public Accountants or the Federal Acquisition Institute, oversees certification standards and plays a significant (but not exclusive) role in delivering training. Perhaps it is time to establish a similar certification body and standards for grants managers, and to improve training offerings and requirements, given the substantial weight our government places on funding public services through grants. And maybe to create a “Federal Grants Institute” to parallel the Federal Acquisition Institute, perhaps in conjunction with the Grants Quality Shared Services Management Office role that HHS has taken on.

Time spent on compliance, administrative costs may get a bad rap

Survey respondents indicate that compliance monitoring is the single largest focus for their time (combining both financial and non-financial administrative compliance). Outsiders may think, “if grant managers could spend less time on compliance, perhaps they could put more time into improving performance.” But panelists Nicole Waldeck, a policy analyst in the Office of Management and Budget’s Office of Federal Financial Management, and Sarah Longshore, director of the Office of Federal and State Accountability for the South Carolina Department of Education, suggested that there is significant value in the effort around compliance. Both indicated that the time spent on compliance encourages grant managers to become more familiar with the mission and purpose of the grant program, and to gather data that will help prove the results of their efforts, and motivates them to seek information from peers and grantors to learn about how to best manage the program. Neither were surprised that compliance requires as much as 36% of the time spent by grant managers who responded to the survey.

Similarly, the survey found indications that over the past two years administrative spending has grown from 10% to 17% of the value of grants disbursed for federal agency respondents. For State respondents, the figure rose from 11% to 13% of the value of grants managed, while local governments remained stable at 7% and NGOs saw an increase from 9% to 14%. While some outsiders may want those administrative spend percentages to be as small as possible (or even zero), minimizing them may not make sense, according to several grant management experts who participated in a panel discussion of survey results. For example, Eric Russell, NGMA president, said “…Those administrative costs tell me that you’re putting forth the effort and the time to help sub recipients and others know what needs to be done with the grant. And [that they know] how to implement the program properly.”

Perhaps it would make sense to seek a common definition of administrative spending, and to set a target range for such spending, so that grant managers can learn from each other and manage expectations and efficiency, and ensure that grant-funded programs are implemented well.

In conclusion, our survey results indicate that grants operations continue to evolve to meet the needs of the moment. We did see improvements in some areas, such as state/local performance impacts, confidence in meeting program mission, satisfaction with grants technology and challenges with budget uncertainty. However, the federal performance impact, leveraging of emerging technology and concerns with inexperienced staff are some of the significant challenges facing the community today.

Jeff Myers is a senior director at REI Systems. Rujuta Waknis is a director at REI Systems, and leads REI’s grants offerings.

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