The Government Grants Management Domain: A Gartner Market Definition

Transcription

1 Industry Research Publication Date: 8 September 2008 ID Number: G The Government Grants Management Domain: A Gartner Market Definition Massimiliano Claps This research provides a definition of grants and grant-making agencies in government and describes functionalities of grant management applications and roles accessing those functionalities. IT leaders in government and high-tech vendors can use this as a critical functionality requirement document for grants management applications. Key Findings Government grant-making agencies must increase efficiency, improve customer service, reduce complexity of operations, and strengthen their ability to monitor performance and compliance. Grant-making agencies' strategies are supported by domain-specific business capabilities, such as grants preparation and publication, intake of applications, evaluation, negotiation and contracting, and awards' administration. Recommendations Government agencies can use the list of capabilities to identify key software functionalities they need to consider when buying or building applications for domainspecific grants management processes. Software vendors should consider the list of functionalities and roles to develop commercial off-the-shelf (COTS) solutions that satisfy their clients' requirements. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

2 WHAT YOU NEED TO KNOW Grant-making agencies at all levels of government central or federal, state or provincial, regional, and local use IT to provide domain-specific capabilities, such as application intake, evaluation, and grant administration. Government agencies that consider building or buying applications for grants management can use the list of key functional requirements to identify gaps in their architecture, design requests for proposals (RFPs) and compare vendors. ANALYSIS Defining Grants According to the U.S. federal government, a grant is "an award of financial assistance from a federal agency to a recipient to carry out a public purpose of support or stimulation authorized by a law of the United States" (source www. grants.gov). The European Commission defines a grant as "a direct financial contribution, by way of donation, from the European Union budget to third-party recipients (usually non-profit-making legal persons) who are involved in activities of interest to the EU" (source: Eurostat). A standard international definition of grants is more difficult to identify; for example, the United Nations' System of National Accounts 1993 (SNA 1993) defines three categories of government expenses that can encompass grants as defined by the U.S. government: Subsidies: "Subsidies are current unrequited payments that government units make to enterprises on the basis of the levels of their production activities or the quantities or values of the goods or services they produce, sell, export or import. Subsidies may be designed to influence levels of production, the prices at which outputs are sold, or the remuneration of the enterprises." Grants: "Grants are noncompulsory current or capital transfers from one government unit to another government unit or an international organization." Miscellaneous other expenses: These include current and capital transfers to market enterprises and nonprofit institutions, as well as scholarships and other educational benefits. Grants can be divided into formula grants and competitive grants, depending on the award mechanism (source: U.S. Department of Education): Formula grants: These are allocations of money in accordance with a distribution formula prescribed by law or administrative regulation for activities of a continuing nature not confined to a specific project. Competitive (or discretionary) grants: A discretionary grant awards funds on the basis of a competitive process. The department reviews applications, in part through a formal review process, in light of the legislative and regulatory requirements and published selection criteria established for a program. The review process gives the department discretion to determine which applications best address the program requirements and are, therefore, most worthy of funding. Government grants absorb a significant share of public-sector spending, especially in federal/national and transnational public sector institutions (see Note 1). Grant programs span a Publication Date: 8 September 2008/ID Number: G Page 2 of 14

3 wide variety of sectors, such as agriculture, student aid, research and development, community development, and so on (see Note 2). The grants process involves a grant-making institution (also known as grantor) and a grantreceiving institution (also known as grantee). This and upcoming Gartner research will focus primarily on grant-making agencies. Government Grant-Making Agencies' Mission and Strategies Grant-making agencies' primary mission is to act as a catalyst and scrutinizer of public purpose activities and to provide guidance and funding for their implementation. To achieve their mission, government grantors need to act according to strategic guidelines that enable them to address specific pain points: To increase efficiency of operations. Like many other public-sector organizations, grantmaking agencies must increase employee productivity and streamline repetitive processes, such as disbursement of funds and eligibility assessment, to tackle budget and skill shortages. To improve customer service. Grant-making institutions often manage multiple grant programs, thus requiring customers to navigate through the bureaucracy to find and apply for different streams of funds. Grantors' modernization strategy aims to integrate information and processes across silos to make life easier for applicants and grantees. To reduce complexity and redundancies. Sharing information and processes across silos is also expected to increase effectiveness of operations, as it will give civil servants a more consistent customer view, eliminate duplications and help fight frauds. To strengthen reporting to verify compliance with the purposes of the fund allocation, to verify overall performance of the grants program relative to the intended public service outcomes, and to verify what constituencies mostly benefit from grants. For example what share of EU grants is received by each member state? Government Grant-Making Agencies' Business Capabilities To deliver the business outcomes defined by their strategies, grant-making agencies must set up and manage domain-specific business capabilities that combine people, processes and IT systems. Grants programs might differ by level of government, geography, award mechanism, administrative law regulating contracting with grantees, and so on. Nevertheless, six macrophases can be identified as being part of most programs: Preparation: In this pre-award stage, the head of the agency, the program officers and/or boards responsible for specific sectors, and the finance department identify and prioritize public service outcomes, commit the budget and define the award rules. Notification: The grantor announces the availability of grant funds and eligibility and process requirements for the application, by publishing the grant and sending individual reminders to customers that the agency knows about. Intake of applications and relationship management: In this phase the program office captures, through various channels, applicants' forms and other documents, and performs a preliminary validation. Grant advisors provide guidance on the submission of applications and send reminders in case of late submissions, or need to resubmit forms; sometimes applicants are put in contact with existing or past grantees for advice. Publication Date: 8 September 2008/ID Number: G Page 3 of 14

4 Evaluation of applications: The program office verifies that applications meet the formal requirements to receive funds. In case of competitive grants, the evaluation also includes analysis of the proposal's merit, which can be carried out by internal program officers and/or boards and by external experts gathered in a panel or selected ad hoc for each evaluation. For example, in the case of scientific research projects, peer evaluation among academic institutions is the usual practice. Negotiation and contractual arrangements: Once applications have been approved, the grantor's program officers and the grantees' representatives negotiate the contract to define amounts and type (operating or capital, direct or indirect, and so on) of expenses to be covered by the grant, the means and time frame of payments, reporting requirements, and so on, and then proceed with the award. Administration: The post-award phase includes disbursing funds, auditing project performance, authorizing changes in project direction or management, authorizing changes in the grant budget, administering payment requests and advance payments, reporting financial flows, and so on. Operational activities, such as payments and refunds, are carried out by program offices in collaboration with the finance department, while strategic financial and operational performance reviews and major program amendments usually involve the finance department, the agency executives and external committees. Government Grant-Making Agencies' IT Systems Historically, grants management application software was custom-built on mainframe platforms to respond to jurisdiction-specific regulatory requirements. The resulting siloed architecture now needs to be modernized to support the above-mentioned six phases, especially because information technologies hold out the promise of addressing some of the pain points described in the previous paragraphs: To make front-office grants application forms available on multichannel platforms, so that applicants can seamlessly navigate and submit information regardless of the backoffice bureaucracy. Online real-time validation of application forms is also expected to greatly reduce the need for resubmissions. To modernize application architectures through the implementation of service-oriented architecture (SOA) and the acquisition of COTS products. Some grant-making agencies developed a graphical user interface (GUI), to facilitate distributed usage, but often this only added to the complexity of architecture and did not facilitate development of new services and integration of front- and back-end applications. To integrate data and processes. Siloed applications and databases resulted in data discrepancy and incoherent grants planning, award and administration across programs; for example, at times, a grantor did not know if someone was applying for separate programs. Also, inconsistent data did not enable reviewing performance of individual grants and outcomes of whole programs. Capabilities still vary significantly to respond to differences in grants programs, but a set of critical functional requirements for domain-specific grants management applications can be identified (see Table 1). It is also important to notice that there is a series of "roles" that, with different levels of authorization (access window, format, view and so on), a domain-specific grants management application should be able to recognize within its functional requirements (see Table 2). Tables 1 and 2 are not aimed to provide complete lists of functionalities and people roles for grants management application software for every conceivable type of program. The lists will not Publication Date: 8 September 2008/ID Number: G Page 4 of 14

5 match the exact business requirements of every agency, because every agency has its practices, regulations and types of grants. The lists are based on Gartner analysis of documents published by and interviews with transnational, national/federal and state government grant-making institutions and software vendors, as well as a review of their published documents. Table 1. Grants Management System's Critical Functional Requirements Grants Program Phase Functional Requirement Brief Description Preparation Identification of goals of the grants program Ability to support workflow of internal discussion and approval of objectives and scope of the program. Notification Intake of applications and relationship management Definition of eligibility and process requirements Preparation of grants program documentation Allocation of budget Announcement/publication of grants program Reminders to potential applicants Design of application forms Online self-service Capture of application Ability to support workflow of internal discussion and approval of applicant eligibility, merit review criteria (in case of competitive grants) and process business rules. Ability to support preparation, revision and approval of program plan documents. Ability to support forecasting and approval of funds to be committed for the grants program. Ability to prepare grants notice document and publish it on multiple media and official journals (such as the Official Journal of the European Union). Ability to prepare and notification to those who should apply. May include grantees whose previous grant is expiring, those who were rejected the previous cycle or other invitees. Ability to define form structure, filing data requirements and so on. Ability to offer individual and organization registration, grants search, preliminary application and final application form submission, revision of status of the application and so on, through the Web. Ability to assign an identity to the application, preassign to appropriate committee and/or program staff, create the application file, and include and count off a related preliminary application if there was one. Publication Date: 8 September 2008/ID Number: G Page 5 of 14

6 Grants Program Phase Functional Requirement Brief Description Management and integration of attachments Conversion of formats Preliminary validation of application Inbound correspondence management Outbound correspondence management Collaborative correspondence management Contact management Release of application information Ability to receive attachments that are allowed to come in, possibly from different sources, and associate them with the original application package. Ability to hold the application until sufficient content is received. Printing or scanning paper (fax, mail, ). Ability to verify in real time if the application is directed to the correct program, identity of applicants, filing requirements and so on. Ability to manage incoming documents, such as preliminary applications, final applications, complaints, and requests for amendments, proposal withdrawals and resubmissions, and so on. Ability to manage courtesy reminders, award notices, declines, withdrawals, reconsiderations and so on. Ability to offer online forums where applicants can get advice. For example, some programs allow an application to be submitted as draft for comments before the actual application is submitted. Coaching should be provided as a service by program staff or may be done by organizations or individuals that have already received the same grants; thus, they can advise on the preparation of application and optimal usage of funds. Ability to automate applicant/grantee registration (individual, organization and consortium) and manage identity credentials (role, updates, authorization to apply for multiple grants and so on). Ability to make available to the public, on request, an application that results in an award except for privileged information or material that is personal, proprietary or otherwise exempt from disclosure under law. Publication Date: 8 September 2008/ID Number: G Page 6 of 14

7 Grants Program Phase Functional Requirement Brief Description Evaluation Finalize eligibility assessment Ability to complete review of formal requirements of the application after real-time validation, such as entitlement of applicant, completeness of data, timeliness of submission, analysis of funds already received via previous or parallel programs and so on. Allocate/assign to staff Allocate/assign to committees/panels Allocate/assign to external reviewers Provide access to review material Review application Score application Collate evaluation score Ability to identify and assign roles to program office staff members. This is necessary for competitive grants. Ability to determine which committee members will act as reviewers, and in what capacity. Includes load balancing, negotiation, identifying conflicts, and possibly self-selection by members. This is necessary for competitive grants. Ability to select internal and external reviewers not included in panels that have to evaluate the merit of the proposal. This is necessary for competitive grants. Ability to make application material available to the internal, committee and external reviewers that need to see it, including access windows, views and so on. This is necessary for competitive grants. Ability to read, research and create notes and comments for the application. This is necessary for competitive grants. Ability to use the defined evaluation criteria to score the application by creating ranking and recommendations. This is necessary for competitive grants. Ability to collect results of feedback on the merit of the proposal from internal and external reviewers. This is necessary for competitive grants. Publication Date: 8 September 2008/ID Number: G Page 7 of 14

8 Grants Program Phase Functional Requirement Brief Description Meet and discuss evaluation Ability to support adjudication meetings to evaluate each application. Typically involves comments by readers, discussion, voting for new scores, assigning factors that will be taken into consideration when adjustments are made to competitionwide criteria. Organize logistics of site visits when this are used as part of a multipart adjudication. This is necessary for competitive grants. Evaluation results approval Prepare evaluation report Decision Announce grants awards Appeal management Ability for program officers to approve all collected feedback to support award or decline decision and create a ranking of individual and competitive grants. Ability to create an evaluation report summarizing results and suggesting changes for the next cycles of evaluation Ability to record the final decision to award or decline of grants funding. Ability to notify grantees of award or decline decision and to publish results on the media when necessary. Ability to support resubmission and reconsideration of the case if the applicant disagrees with a decline. Negotiation and contracting Grants agreement negotiation Ability to support workflow of discussion of amount and nature of expenses to be reimbursed under the grants (direct and indirect, capital and operating), timeline of disbursements and reporting, inclusion of subgrantees and so on. Negotiation results approval Preparation of contract Acceptance and signature of contract Ability for program officers to approve grants agreement and commit funds to individual grantees. Ability to prepare grants agreement documents. Ability to collect signature of grants agreement documents from program officers and grantees. Publication Date: 8 September 2008/ID Number: G Page 8 of 14

9 Grants Program Phase Functional Requirement Brief Description Administration Individual grants amendments Ability to change management, time frame, budget of grants awarded to a single grantee or full withdrawal. Program amendments Periodic report intake Periodic report assessment Feed report into agency reporting Submission of reports to external committees Validation of payments Withdrawal of funds Payment profiling Initiate payment/refund Authorize payment/refund Make payment/intake refund Final report Final reconciliation of funds Closure of fund release Ability to change management, time frame, budget of a grants program or full withdrawal. Ability to intake quarterly or annual financial and operating reports about individual grants. Ability to analyze individual grants reports to evaluate compliance with program goals, budget, schedules and so on. Ability to input individual grants reports into the program and overall grant-making organization reporting. Ability to send periodic report to external committees that oversee the grantor operations. Ability to confirm disbursement after assessment of reports. Ability to withdraw funds in case reports show lack of compliance. Ability to break down disbursements between operating and capital expenditure, direct and indirect costs, or other categories relevant for the program. Ability to request payment or reimbursement of funds, prepare paperwork, and confirm mechanism and date Ability to issue payment order and transfer of funds to appropriate account. Ability for the treasurer to execute authorized payment/refund order. Ability to assess financial and operating report once the grants cycle has run its course. Ability to calculate and account for unobligated funds, final payment or paybacks. Ability to close the mechanism according to which payments and refunds were being done. Publication Date: 8 September 2008/ID Number: G Page 9 of 14

10 Grants Program Phase Functional Requirement Brief Description Closure of grants agreement Ability to terminate contract between grantor and grantee. Common services across phases Case management Ability to create, manage and track case activities or claims relating to individual applicants and grantees. This includes cross-program information and the ability to link case events to process workflow. Source: Gartner (September 2008) Workflow Document and records management Data services Data warehouse Analytics and reporting Text search Security Integration services Ability to define business rules and roles along the life cycle of the grants program. Ability to capture and store data from multiple sources and in multiple formats; to associate information with a particular case; to comply with retention policies; and to audit record usage. Ability to display currency, dates, times. Ability to provide enterprise relationship diagrams showing layout of tables, fields and data entity relationships. Ability to provide XML interface to seamlessly update and exchange data and provide the capability of populating and producing reports. Ability to extract, transform and load large amounts of data. Ability to create disbursement reports (such as U.S. Federal Cash Transaction Reports), budget and outcome analyses, and so on. Ability to search against database values and documents attached to grants application forms. Ability to protect and encrypt data and manage grantees and grantmaking agencies' employees' authentication and levels of authorization. Ability to integrate with financial management systems to ensure reconciliation of payments and accounts. Integration with countryspecific systems, such as the U.S. Federal Government Grants.gov and the Research Councils U.K. Joint Electronic Submission (Je-S) platforms. Publication Date: 8 September 2008/ID Number: G Page 10 of 14

11 Table 2. Key Roles That Access Grant Management Applications Role Advisor Customer Co-customer Department/agency head Department/agency director Program officer/assistant/approver Financial department Reviewer Source: Gartner (September 2008) Brief Description Anyone who does not hold a decision-making role but has access to the complete application files to provide recommendations that support the application validation, evaluation and appeal. One who applies for funding. The customer goes through two stages, applicant (before funding is granted) and then grantee or award recipient (from funding to closure of grant). The customer might be an individual or an organization. In the second case, a representative will act and take responsibility on behalf of the enterprise, nongovernmental organization, academic institution and so on. A collaborator of the customer. He or she in turn goes through two stages: co-applicant (before funding is granted) and then subgrantee (from funding to closure of grants). The director of the grant-making agency, who participates only to some strategic stages of a grants program, such as budgeting and final performance review. A manager within the grant-making agency responsible for administration and management at a higher level than a grants program. He participates to strategic activities, such as budgeting and performance review, and oversees major program changes. A grant-making agency staff member who is deeply involved in the grant program. He or she is responsible for validating applications, organizing reviewers and committees, coordinating the adjudication process, officiating over decisions, handling appeals and requests for change, overseeing award administration, monitoring progress, and so on. A service group within the grant-making agency that provides support services to program staff across many programs, for specific phases of the award cycle, such as budgeting, financial performance review, and payments. Anyone who evaluates a proposal submitted as part of a competitive grant application with the purpose of commenting and/or scoring it. Reviewers can be internal staff of the agency, or external experts, typically from academic and research institutions. Often, external experts are grouped into committees/panels that collectively perform evaluation of merit of a competitive grant application and assign scoring for the adjudication of funds. Committees can include individuals from a variety of organizations, such as other government agencies or academic institutions. What to Do Grant-making government agencies that aim to upgrade or replace existing applications, or to automate paper-based processes, can use these lists to: Identify gaps in their current grants management systems relative to business requirements. Prepare requests for information and RFPs. Compare critical capabilities offered by commercial off-the-shelf product vendors. Publication Date: 8 September 2008/ID Number: G Page 11 of 14

12 Capabilities that enterprise architects, application managers and sourcing managers should have at the top of their list of requirements, either when building or buying grants management software, include: Online self-service that makes it easier for applicants to search for grant opportunities and complete forms Real-time data validation for example, by linking the application forms' underlying XML schemas with the back-office engine to streamline eligibility assessment processes by ensuring that electronically submitted applications comply with a set of minimum requirements Comprehensive workflow capabilities that enable the ability to flexibly adjust business rules for eligibility assessment, allocation to reviewers, time frame for reporting, and so on Integration with the overall agencies' financial management systems to enhance payment reconciliation and reporting processes Note 1 Examples of Share of Grant on Total Government Expenditure The EU's Common Agricultural Policy (CAP) aims to ensure reasonable prices for Europe's consumers and fair incomes for farmers, particularly through the common organization of agricultural markets and by ensuring compliance with the principles adopted at the Stresa Conference in 1958, namely single prices, financial solidarity and community preference. During the first years of the EU's existence, CAP payments/support to the agriculture sector represented a significant proportion of budget expenditure, over two-thirds on occasions. Nowadays, the CAP costs about 5 billion euros per year, or 40% of the total EU budget, but this share continues declining. In fiscal year 2006, the U.S. federal government spent almost $490 billion in grants, more than the total value of contracts for goods and services with external contractors (sources: EC and ). Note 2 Examples of U.S. Federal Government Grant Programs Grant programs span a wide variety of sectors, such as agriculture, student aid, research and development, community development, and so on (see Table 3). Table 3. U.S. Federal Government Grant Programs Grants Category Grants Program Agency Agriculture Technical assistance for specialty Unified Export Strategy crops Arts Native American library services enhancements Institute of Museum and Library Services Business and commerce Micro- and small-enterprise trade-led growth Peru USAID-Lima Community development State veterans home construction Construction of State Home Facilities Disaster prevention and relief Not available Publication Date: 8 September 2008/ID Number: G Page 12 of 14

13 Grants Category Grants Program Agency Education James Madison graduate fellowships James Madison Memorial Fellowship Foundation Employment, labor and training Senior scientist research and mentorship award National Institutes of Health Energy Hydrate production system research National Energy Technology Laboratory Environmental quality Coral reef ecosystem studies National Oceanic and Atmospheric Administration Food and nutrition Team nutrition training Food and Nutrition Service Health Elder care initiative long-term care Indian Health Service Housing Rural housing preservation Housing and Community Facilities Programs Humanities Digitizing historical records National Archives and Records Administration Information and statistics Law, justice and legal services Natural resources Regional development Science and technology Social services and income security State court processing statistics redesign U.S.-China collaboration on rule of law Cooperative endangered species conservation fund Learn and Serve America 2008 Higher Education College Student Social Media Initiative Chemical biological defense initiative fund Senior legal services Transportation National bicycle and pedestrian clearinghouse Source: (September 2008) Bureau of Justice Statistics Thailand USAID-Bangkok U.S. Fish and Wildlife Service Corporation for National and Community Service Defense Threat Reduction Agency Administration on Aging Department of Transportation, Federal Highway Administration Publication Date: 8 September 2008/ID Number: G Page 13 of 14

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