Federal grants and other financial assistance provide funds for research that develops critical medicine; community-based organizations that provide home and community-based services, child care, food, and resources to our vulnerable neighbors; bridges that connect us physically; and broadband that connects us virtually. In a typical year, Federal grants can make up a third of state budgets and half of state health and public assistance budgets. Last year alone, the Federal government issued over $1.2 trillion in Federal financial assistance.
The Federal government puts conditions on that funding with the goal of making sure Federal money is spent properly. However, sometimes those conditions create burdens without adding value. The end result is that unnecessary red tape wastes taxpayer resources and government unnecessarily increases the cost of finding and applying for Federal programs.
Today, the Biden-Harris Administration is proposing a fundamental rewrite of the Office of Management and Budget’s Uniform Grants Guidance, which are the guidelines issued by OMB to Federal agencies for use across all Federal grants and other types of Federal financial assistance. This rewrite will help ensure that recipients have more time and resources to devote to delivering outcomes by eliminating obstacles to using funding for its intended purpose. This will also allow recipients to focus on the people they serve rather than compliance work that does not improve performance. This initiative is part of the Biden-Harris Administration’s relentless focus on ensuring that the Federal Government delivers for the customers it serves, including state and local governments, firms and, most importantly, American families. The proposal will materially decrease the burden on recipients of Federal financial assistance, advance equity and job growth across the country, and meaningfully improve the administration of Federal financial assistance.
OMB’s Uniform Grants Guidance was assembled from multiple guidance documents that had been issued over decades, resulting in a sometimes confusing framework and increased administrative burden. For example, agencies may interpret potentially ambiguous language in the current guidance differently, which could result in an organization receiving funding from two different agencies facing duplicative or conflicting requirements, increasing burden.
Unnecessary red tape costs real money and reduces the amount that Federal funding recipients can spend on delivering outcomes. One study found that principal researchers on Federally funded research studies spent 42 percent of their time on administrative work and grant compliance. Reducing that burden would functionally increase the value of Federal awards by allowing recipients to shift resources from administrative tasks to mission work.
Just as importantly, costly application or compliance requirements makes Federal financial assistance inaccessible to some worthy recipients altogether. For example, a study by OMB’s customer experience team between January and March 2022 looking at challenges tribal governments face accessing grants found that:
- Some requirements of Federal grants prevent some Tribes from accessing and maximizing critical funding;
- Administrative burden experienced throughout the grant lifecycle overwhelms some Tribal capacities; and
- Some Tribes perceive that the Tribal funding approach falls short of the general Federal trust responsibility.
Today’s proposed revisions to streamline and clarify OMB’s Uniform Grants Guidance will reduce complexity and confusion for would-be applicants.
Finally, unnecessary complexity means that often the recipients most in need of Federal financial assistance cannot access it, including those who may be most well suited to serve the populations many Federal programs are designed to serve. Non-specialists face difficulties in navigating complex compliance requirements and overcoming high barriers to entry. For example, program leaders’ time is better spent than with interpreting complex notices of funding opportunities (NOFOs) or filling out lengthy grant applications that are full of jargon.
Today’s proposed changes to OMB’s Uniform Grants Guidance will:
- Reduce unnecessary compliance costs. For example, the proposal would modify numerous requirements to simplify compliance, including by reducing the number of additional “prior approvals” that recipients must receive from Federal agencies for spending money on specific activities despite having already submitted and received approval on an overall budget. The proposal would also clarify ambiguous terms so that recipients can comply with the same requirement in the same way, regardless of funding source, and increase focus on importance of data and evaluation in program development and implementation.
- Removes barriers to entry. High administrative costs mean that some worthy projects never seek or obtain funding to begin with and never get off the ground. Among many proposed changes to help remedy this, the guidance would revise NOFOs to make it easier for non-experts and smaller organizations to apply for Federal funding. The proposal includes a complete revision of the NOFO requirements for Federal agencies, and underscores the importance of clearly communicating in plain language (including with a new Executive Summary section) only the essential information that is needed for applicants to understand program objectives and application requirements. Further, these revisions clarify that agencies must post only “openly competed” opportunities on Grants.gov; ensure announcements are accessible to a diverse group of eligible applicants, including underserved communities; and offer pre-award technical assistance.
- Ensure assistance serves intended communities. Communities most in need of assistance are often least able to hire experts to help them navigate complex processes. The proposal would make clear that the exclusive use of English language in notices, applications, and reporting is not required. This is just one example of how the updated guidance will allow for more equitable access across communities.
Today’s proposal is a part of the Biden-Harris Administration’s focus on streamlining service delivery and improving customer experience and direction that Federal agencies look for opportunities in all Federal programs to reduce the burden on the public, whether when applying for a passport or updating a loan application.
The proposed revisions to OMB’s Uniform Grants Guidance, which are published for public comment here, will promote a culture of improved stewardship of Federal funds, more equitable access to programs and services, and more streamlined and effective oversight and implementation of Federal programs. There is more work to come. OMB looks forward to continued collaboration with stakeholders to ensure that this guidance is as clear and effective as possible so that the Administration can deliver the best results for the American people. OMB welcomes comments on the proposal at regulations.gov.