Simplified rules proposed for agencies doling out $600 billion in federal grants

To hold agencies more accountable for reducing paperwork and reducing improper payments, the Office of Management and Budget proposed consolidating federal guidance for administering some $600 billion in annual grants and financial assistance payments.

The proposed rule “is intended to both increase the efficiency and effectiveness of grant programs by eliminating unnecessary and duplicative requirements and strengthen the oversight of grant dollars by focusing on areas such as eligibility, monitoring of sub-recipients, adequate reporting, and other areas that are potential indices of waste, fraud or abuse,” wrote Comptroller Danny Werfel in a Friday blogpost. The proposed improvements follow President Obama’s 2009 executive order on reducing improper payments and curbing waste but are balanced against a February 2011 presidential memorandum on promoting administrative flexibility. They were prepared after public comment and consultation with the interagency Council on Financial Assistance Reform, which the White House created in October 2011.

Key components of the proposed guidance include:

• Harmonizing and streamlining all OMB guidance on grants from eight documents into one, while clarifying key differences for different entities;
• Simplifying the reporting requirements grantees must adhere to in justifying salaries and wages charged to grants;
• Ensuring that federal agencies better review financial risk posed by applicants and merits of an application before providing a grant;
• Providing guidance to ensure robust oversight of sub-recipients;
• Focusing more audit resources on preventing waste, fraud, and abuse; and
• Holding agencies accountable for getting results and addressing weaknesses among grant recipients.

Comments on the proposed consolidation are due by May 2, 2013.

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