Watchdog: OMB Should Collect and Share Lessons Learned on COVID Grants Flexibilities 

As agencies are doling out funds from the latest coronavirus relief package, a watchdog recently said the White House should collect and share lessons learned from flexibilities afforded last year on grant administration.

Uniform guidance on grants management, first enacted in December 2014 then updated in August 2020, outlines how the Office of Management and Budget can give federal agencies flexibilities for administering grants under certain circumstances. The Trump administration offered such accommodations last spring for the coronavirus pandemic, which was the third time in recent years a presidential administration did so after a crisis (the others instances were the hurricanes in 2005 and 2017). The use of these flexibilities was the subject of a Government Accountability Office report published last week. 

“OMB intended the COVID-19-related grant flexibilities to help grantees respond to, and address, organizational challenges stemming from the pandemic by reducing their administrative burden without compromising accountability,” said the watchdog. OMB and the agencies studied for the report “used existing grants management processes to balance assisting grantees in responding to the pandemic while maintaining controls against waste, fraud, and abuse of federal grant funds.”

The total 15 flexibilities made through three memos in March and April 2020 were “broadly” used at the Education, Health and Human Services, and Transportation departments. Grantees found them “very helpful,” said GAO, based on the watchdog’s performance audit that spanned April 2020 to March 2021. 

Senior policy analysts at OMB said during a National Grants Management Association virtual event on Wednesday that in fiscal 2020, the federal government spent over $800 billion on grants, which does not even include pandemic spending. 

Examples of how the flexibilities were used include: paying employees’ salaries when they couldn’t access their worksites, extending audit deadlines to accommodate remote work and repurposing grants to purchase much-needed medical equipment for local hospitals. Most of the flexibilities expired by June 2020 and all of them ended by December 2020. 

OMB has been relying on individual agencies to document lessons learned, but GAO said OMB should be doing the documentation itself, as it is responsible for creating governmentwide policies on grants management. This will lead to a better understanding of using these flexibilities going forward, while still preventing waste, fraud and abuse with funds, the watchdog said. OMB “generally agreed” with the recommendation. 

Jeff Myers, senior director at the technology firm REI Systems, wrote in Government Executive last month about how the pandemic has impacted grants management, based on a recent, annual survey by REI Systems, The George Washington University and the National Grants Management Association.

“Large, new grant programs have been created to tackle COVID-19. The Paycheck Protection Program and funding for vaccine development and therapeutics attracted inexperienced new grantees and created complex new challenges for grantors,” Myers wrote. “At the same time, old ways of managing grants aren’t all possible. For example, training, technical assistance, and site visits to grantees all happen virtually now. Likely as a consequence, more than 75% of survey respondents indicated that COVID-19 impacted grantee performance, with two-thirds of federal grant managers indicating a significant impact (of more than 5%).” 

Similar to GAO, he said that, “By sharing experiences and lessons, and by continuing to innovate, the future looks bright.” 

Eight days after President Biden enacted the $1.9 trillion coronavirus relief package on March 11, OMB issued guidance on how agencies should carry out the provisions, including flexibilities for grants. 

“The new combination of waivers, time extensions and cost-related changes can be applied to all federal grant programs, not just those COVID-19-related awards under [the American Rescue Plan],” said the Federal Fund Management Advisor, an organization that provides training for grants management professionals. OMB is letting agencies “step away from some of the more constrictive requirements contained in the uniform guidance;” however, “it’s up to the agencies to actually implement the flexibilities — and it’s up to recipients to know what they are and to try to obtain them.” 

While the move reflects the actions from March 2020, “the new flexibilities are not all specifically time-limited,” the organization continued. “And, perhaps more importantly, OMB plans to monitor the agencies to see that they actually use the flexibility they’ve been given.”