struggles to track its expenses while managing $500 billion in grants



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The grant application system is responsible for over 1,000 federal grant programs worth about $500 billion. But the system, managed by the Department of Health and Human Services, has struggled to manage the funding and operation challenges, deeply affecting the performance of the system and leading some agencies to rely on their own application systems.

Due to the high number of grant applications federal agencies must handle, the Office of Management and Budget created in 2002 to simplify and streamline the federal grant process. But in 2009, OMB described the system performance as “noticeably degraded” and at “serious risk for failure”. OMB was so concerned about the ability to handle the onslaught of stimulus grant applications that it instructed agencies to find alternatives. encompasses 26 agencies for activities like training, research, planning, construction and services in health care, education, transportation and homeland security. In 2010, 246,631 grant applications were submitted.

Participating agencies contribute to the cost of administrating, based on the size of grants available. But the model uses has come under scrutiny, due to the uneven distribution of costs among uses and recurring collection delays. The contribution calculation results vary greatly for agencies with similar usage profiles. The Department of Housing and Urban Development posted 40 grant opportunities, received 4,817 applications through the website and paid $414,422 in contributions. However, the National Endowment for the Humanities posted roughly the same amount of grants and received a similar number of applications, but only contributed $155,159.

HHS and consider agency size to correlate with an agency’s use of the system, but a review by the Government Accountability Office found only a moderate correlation between the two.

Further complicating finances, it does not report costs by program activities, track costs attributed to each agency or charge agencies for all the costs they incur. Without this information, partner agencies do not see the benefits of the services received. As a result, struggles to demonstrate the need for budget increases or changes in agency contributions. said they could track activity costs in greater detail, but is not set up to track costs by agency. does not charge agencies on-line grant application forms, which can include complicated grant application packages with multiple, custom-designed forms. According to the, the cost of developing and maintaining these forms is increasing.

 “ continues to experience persistent governance challenges, including unclear roles and responsibilities among the governance entities, a lack of key performance metrics, and communication with stakeholders,” the GAO report said. “Information on system performance and costs is necessary to clearly link the benefits partner agencies receive with the costs they pay and may foster partner agency support for”

In response to the recurring difficulties with the system, some agencies accept applications through their own systems or e-mail, defeating the purpose of the system.

FAST FACT: The contribution calculation does not account for all of’s activity costs, and the portions assigned to different tasks in the contribution calculation may be inaccurate. For example, posting grant opportunities accounts for 40 percent of the budget in the contribution calculation, but there is no data to show that they spend 40 percent of resources on posting activities.