the WHITE HOUSEPresident Barack Obama

Search form

Improving Outcomes by Reducing Red Tape for Financial Assistance

Summary: 
The Office of Management and Budget today published new guidance that significantly reforms and strengthens Federal grant-making to improve outcomes for the American people while reducing bureaucratic red-tape. The new guidance is a key component of the Administration’s larger effort to more effectively focus Federal grant resources on improving performance and outcomes while ensuring the financial integrity of taxpayer dollars.

The Office of Management and Budget today published new guidance that significantly reforms and strengthens Federal grant-making to improve outcomes for the American people while reducing bureaucratic red-tape.   The new guidance is a key component of the Administration’s larger effort to more effectively focus Federal grant resources on improving performance and outcomes while ensuring the financial integrity of taxpayer dollars.  By streamlining eight Federal regulations into a single, comprehensive policy guide, the government can better administer the $600 billion awarded annually for grants and other types of financial assistance by decreasing administrative burden for recipients and reducing the risk of waste, fraud and abuse.

The new uniform grants guidance improves on current policy by:

  • Eliminating duplicative and conflicting guidance;
  • Focusing on performance over compliance for accountability;
  • Encouraging efficient use of information technology and shared services;
  • Providing for consistent and transparent treatment of costs;
  • Limiting allowable costs to make the best use of Federal resources;
  • Setting standard business processes using data definitions;
  • Encouraging non-Federal entities to have family-friendly policies;
  • Strengthening oversight; and
  • Targeting audit requirements on risk of waste, fraud, and abuse.

This guidance is the culmination of a two-year collaborative effort across the Federal government and its partners -- State and local governments, Indian tribes, research and higher education institutions, nonprofit organizations, and the audit community -- to rethink and reform the rules that govern our stewardship of Federal dollars. 

The reform effort embodies principles set forth by the President, who directed OMB to work with key stakeholders to evaluate potential reforms to Federal grants policies in Executive Order 13520 on Reducing Improper Payments and in the Presidential Memorandum on Administrative Flexibility, Lower Costs, and Better Results for State, Local, and Tribal Governments.  In addition, OMB and its partners are continuing complementary work to strengthen program outcomes through innovative and effective use of grant-making models, performance metrics, and evaluation, as described in OMB Memorandum M-13-17 on Next Steps in the Evidence and Innovation Agenda.

Looking ahead, implementation of the new guidance will be spearheaded by the cross-agency Council on Financial Assistance Reform (COFAR), which worked closely with OMB on its development.  The COFAR will work with stakeholders to facilitate implementation, evaluate effectiveness, and keep this important reform effort moving forward.  We still have more to do, but we’re proud to announce these changes.  For more information, please visit www.cfo.gov/COFAR

Beth Cobert is the Deputy Director for Management of the Office of Management and Budget