oversight

Grants Management: Agency Action Required to Ensure Grantees Identify Federal Contribution Amounts

Published by the Government Accountability Office on 2019-03-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

             United States Government Accountability Office
             Report to Congressional Requesters




             GRANTS
March 2019




             MANAGEMENT

             Agency Action
             Required to Ensure
             Grantees Identify
             Federal Contribution
             Amounts




GAO-19-282
                                              March 2019

                                              GRANTS MANAGEMENT
                                              Agency Action Required to Ensure Grantees Identify
                                              Federal Contribution Amounts
Highlights of GAO-19-282, a report to
congressional requesters




Why GAO Did This Study                        What GAO Found
Since 1989, an appropriations
                                              The Stevens Amendment is an appropriations provision that requires grantees of
provision, colloquially known as the
                                              the Departments of Labor (DOL), Health and Human Services (HHS), and
“Stevens Amendment,” has reflected
                                              Education (Education) to disclose for a grant program the percent of the costs
Congress’s longstanding effort to
                                              financed with federal funds, the federal dollar amount, and the percentage and
ensure transparency and
                                              dollar amount financed by nongovernmental funds. The provision requires that
accountability in federal grant
                                              recipients of grants funded by DOL, HHS, and Education make certain funding
spending. GAO was asked to review
                                              disclosures when issuing statements, press releases, bid solicitations, and other
agency guidance and grantee
                                              documents describing their grant project or program. DOL, HHS, and Education
compliance related to the Stevens
                                              generally provide written guidance to grantees with the exact text of the Stevens
Amendment. This report (1)
                                              Amendment or a paraphrased equivalent. In addition, a number of operating
describes the guidance DOL, HHS,
                                              divisions within HHS referenced the HHS Grants Policy Statement, which
and Education provide to grantees
                                              includes language equivalent to the Stevens Amendment, as a way to instruct
regarding the Stevens Amendment;
                                              grantees. One HHS operating division, the Health Resources and Services
(2) examines the extent to which
                                              Administration, provided grantees with additional guidance in the form of a web
DOL, HHS, and Education are
                                              page that contained examples of funding disclosure statements and frequently
managing grantees’ compliance with
                                              asked questions intended to clarify the Stevens Amendment’s requirements.
the Stevens Amendment; and (3)
describes what is known about how             One DOL subagency, the Employment and Training Administration (ETA), whose
grantees calculate the dollar                 active grants represented more than 95 percent of DOL’s total grant dollars, had
amounts and percentages of their              processes for managing grantees’ compliance that were able to identify
federal and nongovernmental                   instances of grantee noncompliance with Stevens Amendment requirements.
funding disclosures. GAO asked for            ETA’s operating plan for grant oversight targets 26 percent of its active grants for
agency guidance documents,                    risk-based monitoring each fiscal year, representing approximately 2,100 grants
reviewed monitoring reports,                  in fiscal year 2019. The other DOL subagencies either stated that they did not
interviewed officials on agencies’            monitor grantees for compliance with Stevens Amendment requirements or did
Stevens Amendment oversight                   not have processes in place for managing grantee compliance with the
efforts, and asked agencies how               requirements of the Stevens Amendment. Most HHS operating divisions said
grantees calculate funding amounts.           they did not review grantees for Stevens Amendment compliance. Education also
What GAO Recommends                           did not monitor for grantee compliance with the Stevens Amendment’s
                                              requirements. Regulations governing federal agencies’ management of grants
GAO recommends that DOL                       require federal agencies to manage and administer the federal award in a
subagencies (other than ETA), HHS             manner that ensures that programs are implemented in full accordance with U.S.
operating divisions, and Education            statutory and public policy requirements. Without processes for managing
design and implement processes to             compliance, some DOL subagencies, HHS operating divisions, and Education
manage grantees’ compliance with the          are unable to ensure that grant programs are being implemented by grantees in
Stevens Amendment. In responding to           full accordance with the statutory requirements of the Stevens Amendment.
the report, DOL, one DOL subagency,
and HHS agreed with GAO’s                     Most of the subagencies and operating divisions monitoring compliance did not
recommendation. Education disagreed           gather information from grantees about how the grantees calculate the dollar
with GAO’s recommendation, citing             amounts and percentages in their Stevens Amendment funding disclosures. For
limited monitoring resources and other        example, DOL’s ETA officials said that they do not know how the dollar amounts
reasons. GAO believes the                     reported by grantees were calculated, and have not inquired about the level of
recommendation should be fully                detail factored into indirect costs involving the grantee organization’s structure
implemented, as discussed in the              and the percentage of funds spent on salaries. Similarly, officials from HHS’s
report.                                       National Institutes of Health operating division noted that calculations can be
                                              difficult given that a research program can have multiple funding streams that
View GAO-19-282. For more information,        feed into a grant project and grantees’ research portfolios are now more complex
contact Michelle Sager at (202) 512-6806 or
sagerm@gao.gov.
                                              than they have been in the past.
                                                                                       United States Government Accountability Office
Contents


Letter                                                                               1
               Background                                                            4
               DOL, HHS, and Education Generally Provide Grantees with the
                 Exact Text of the Stevens Amendment or a Paraphrased
                 Equivalent                                                          6
               DOL’s ETA Managed Compliance with the Stevens Amendment
                 through Its Grantee Monitoring Processes, Though Most HHS
                 Operating Divisions and Education Did Not                         13
               Most Subagencies and Operating Divisions Monitoring Stevens
                 Amendment Compliance Did Not Gather Information about
                 Grantees’ Cost Calculations                                       21
               Conclusions                                                         22
               Recommendations for Executive Action                                22
               Agency Comments and Our Evaluation                                  23

Appendix I     Comments from the Department of Labor’s Occupational Safety
               and Health Administration                                           26



Appendix II    Comments from the Department of Health & Human Services             27



Appendix III   Comments from the Department of Education                           29



Appendix IV    GAO Contact and Staff Acknowledgments                               32



Figures
               Figure 1: Written Stevens Amendment Guidance Provided By
                        DOL, HHS, and Education to Grantees, 2018                    7
               Figure 2: Stevens Amendment Monitoring Practices at DOL, HHS,
                        and Education                                              14




               Page i                                      GAO-19-282 Grants Management
Abbreviations

ACF               Administration for Children and Families
AHRQ              Agency for Healthcare Research and Quality
ILAB              Bureau of International Labor Affairs
BLS               Bureau of Labor Statistics
CDC               Centers for Disease Control and Prevention
CMS               Centers for Medicare and Medicaid
CEO               Chief Evaluation Office
COGR              Council on Governmental Relations
USDA              U.S. Department of Agriculture
DOD               Department of Defense
Education         Department of Education
HHS               Department of Health and Human Services
DOL               Department of Labor
ETA               Employment and Training Administration
FDA               Food and Drug Administration
HRSA              Health Resources and Services Administration
IHS               Indian Health Service
MSHA              Mine Safety and Health Administration
NGMA              National Grants Management Association
NIH               National Institutes of Health
OASH              Office of the Assistant Secretary for Health
ODEP              Office of Disability Employment Policy
OGM               Office of Grants Management
ONC               Office of the National Coordinator for Health
                  Information Technology
OSHA              Occupational Safety and Health Administration
SAMHSA            Substance Abuse and Mental Health Services
                  Administration
VETS              Veterans Employment and Training Service
WB                Women’s Bureau


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Page ii                                                    GAO-19-282 Grants Management
                       Letter




441 G St. N.W.
Washington, DC 20548




                       March 14, 2019

                       The Honorable Ron Johnson
                       Chairman
                       Committee on Homeland Security and Governmental Affairs
                       United States Senate

                       The Honorable James Lankford
                       Chairman
                       Subcommittee on Regulatory Affairs and Federal Management
                       Committee on Homeland Security and Governmental Affairs
                       United States Senate

                       The Honorable Rand Paul, M.D.
                       Chairman
                       Subcommittee on Federal Spending Oversight and Emergency
                       Management
                       Committee on Homeland Security and Governmental Affairs
                       United States Senate

                       The Honorable Joni Ernst
                       United States Senate

                       Federal agency grants management includes ensuring grantee
                       compliance with numerous rules and requirements. Grantees can receive
                       guidance on these requirements in the standard terms and conditions
                       contained in the award notices from federal agencies providing the
                       grants. The President’s Management Agenda, released in 2018,
                       established “results-oriented accountability for grants” as a cross-agency
                       priority goal to “maximize the value of grant funding by applying a risk-
                       based, data-driven framework that balances compliance requirements
                       with demonstrating successful results for the American taxpayer.” 1

                       Requirements for some federal grantees receiving federal funds to
                       disclose the percentage of the total costs of the program or project which
                       will be financed with federal money, the dollar amount of federal funds for
                       the project or program, and the percentage and dollar amount of the total

                       1
                        President’s Management Council and the Executive Office of the President, President’s
                       Management Agenda: Modernizing the Government for the 21st Century (Mar. 20, 2018).




                       Page 1                                                  GAO-19-282 Grants Management
costs of the project or program that will be financed by nongovernmental
sources have existed in some form since 1989. The 2018 appropriations
law establishing these disclosures requires that recipients of grants
funded by the Departments of Labor (DOL), Health and Human Services
(HHS), and Education (Education) disclose the total costs of programs or
projects paid for with federal funds “[w]hen issuing statements, press
releases, requests for proposals, bid solicitations and other documents
describing projects or programs.” 2 These requirements reflect
longstanding efforts to ensure transparency and accountability in federal
grant spending. The provision has been included in various
appropriations acts throughout the last 30 years and is still colloquially
referred to as the “Stevens Amendment” as it was first introduced by
then-senator Ted Stevens as an amendment to appropriations bills, and
was included in the final appropriations for those agencies. 3

You asked us to review aspects of agency guidance and grantee
compliance related to the Stevens Amendment. This report (1) describes
what types of guidance, if any, DOL, HHS, and Education are providing to
grantees about the requirements of the Stevens Amendment; (2)
examines the extent to which DOL, HHS, and Education are managing
grantees’ compliance with the Stevens Amendment; and 3) describes
what is known about how grantees calculate the funding percentages and
dollar amounts required by the Stevens Amendment, including whether
indirect costs are factored into these calculations.

To address these objectives, we researched the legislative history of
these requirements to understand their evolution since the original
passage in 1989. We spoke to representatives from the National Grants
Management Association and the Council on Governmental Relations to

2
  For example, the 2018 iteration of the provision is in the Consolidated Appropriations Act
of 2018, and applies to DOL, HHS, and Education. Consolidated Appropriations Act, 2018,
Pub. L. No. 115-141, div. H, title V, Sec. 505, 132 Stat. 348 (Mar. 23, 2018). Previous
iterations have also applied to the Departments of Defense and Agriculture and related
agencies, and the agencies of and related to DOL, HHS, and Education. Hereafter, we
refer to this provision as the “Stevens Amendment.”
3
 See, e.g., Departments of Labor, Health, and Human Services, and Education, and
Related Agencies Appropriations Act, 1989, Pub. L. No. 100-436, Sec. 516, 102 Stat.
1680, 1715 (Sept. 20, 1988), and Department of Defense Appropriations Act, 1989, Pub.
L. No. 100-463, Sec. 8136 102 Stat. 2270, 2270-46, (Oct. 1, 1988), Rural Development,
Agriculture, and Related Agencies Appropriations Act, 1989, Pub. L. No. 100-460, Sec.
644, 102 Stat. 2229, 2265 (Oct. 1, 1988). There are multiple examples throughout the 30
year history of the Stevens Amendment. This footnote refers to the earliest versions.




Page 2                                                     GAO-19-282 Grants Management
obtain their insights into grantees’ interpretation and implementation of
the Stevens Amendment, which helped inform our discussion topics for
later interviews with agency officials. In addition, we reviewed a study
published in April 2017 that reviewed 100 National Institutes of Health
(NIH) grant projects’ press releases for Stevens Amendment
compliance. 4

For the first objective, we asked DOL, all of DOL’s grant-making
subagencies, HHS, all of HHS’s grant-making operating divisions, and
Education for copies of relevant guidance documents showing the
agencies’ instructions to grantees to help them comply with the Stevens
Amendment’s disclosure requirements. 5

For the second objective, we asked some of DOL’s grant-making
subagencies, all 11 of HHS’s grant-making operating divisions, and
Education to provide us with responses to questions on guidance,
monitoring, and enforcement. We also conducted follow-up interviews
with officials from DOL’s Employment and Training Administration (ETA),
HHS operating divisions that initially stated they conducted monitoring,
4
 “Ivy League Flunkers: Schools Fail on Federal Funding Disclosure,” Restore
Accountability and White Coat Waste Project, April 2017. This study found that none of
the 100 press releases were in compliance with all of the requirements of the Stevens
Amendment, and three of the 100 complied with one of the Stevens Amendment
requirements (for the dollar amount of the project financed by federal funds).
5
  HHS has 11 operating divisions that administer a wide variety of health and human
services as well as conduct research. These operating divisions are: the Agency for
Healthcare Research and Quality, Office of the National Coordinator for Health
Information Technology, the Office of the Assistant Secretary for Health, the Substance
Abuse and Mental Health Services Administration, the Food and Drug Administration,
Centers for Medicare and Medicaid Services, Administration for Children and Families,
Health Resources and Services Administration, National Institutes of Health, Centers for
Disease Control and Prevention, and the Indian Health Service. HHS noted that the
Consolidated Appropriations Act of 2018, appropriated funds for HHS in Division H of the
Act, which includes the Stevens Amendment provision, and separately appropriated funds
for the Indian Health Service (IHS) in Division G, under the Department of the Interior
appropriation which included a subsection for related agencies under HHS. Division G
does not contain the Stevens Amendment provision. Despite the appropriation under
Interior, for organizational purposes, IHS is an agency within HHS, which is responsible
for providing federal health services to American Indians and Alaska Natives. HHS
officials stated that IHS was not subject to Division H of the Consolidated Appropriations
Act of 2018. The same is true for the appropriations for 2019. For Interior’s appropriation
which includes IHS, see, Consolidated Appropriations Act, 2019, Pub. L. No. 116-6, div. E,
tit. III, 133 Stat. 13, (Feb. 15, 2019), and for the Stevens Amendment provision applicable
to Labor, HHS, and Education see, Department of Defense and Labor, Health and Human
Services, and Education Appropriations Act, 2019, and Continuing Appropriations Act,
2019, Pub. L. No. 115-245, div. B, tit. V, Sec. 505, 132 Stat. 2981 (Sept. 28, 2018).




Page 3                                                    GAO-19-282 Grants Management
             and Education to clarify their written responses and determine whether
             the agencies had any supporting documentation. We also asked all three
             agencies what their grants management efforts, including any monitoring,
             showed with regard to the extent of grantee compliance with the
             requirements of the Stevens Amendment.

             We asked each of the subagencies and operating divisions that said or
             indicated that they conducted monitoring for compliance with the Stevens
             Amendment for six examples of grantee documents showing compliance
             or noncompliance with the amendment. For any instances of
             noncompliance, we asked whether the agency determined appropriate
             corrective actions and whether the grantees implemented those
             corrective actions. We also asked the agencies that provided examples
             whether they tracked the number of instances of compliance or
             noncompliance.

             For the third objective we requested any available information regarding
             how grantees calculated Stevens Amendment percentages and dollar
             amounts and whether they factored indirect costs into their calculations.
             We asked whether the subagencies and operating divisions that stated
             they conducted monitoring of the Stevens Amendment were aware of the
             methods grantees used to calculate percentages and dollar amounts of
             federal funding, and whether grantees factored indirect costs into their
             calculation of federal spending used in their Stevens Amendment
             disclosures.

             We conducted this performance audit from January 2018 to March 2019
             in accordance with generally accepted government auditing standards.
             Those standards require that we plan and perform the audit to obtain
             sufficient, appropriate evidence to provide a reasonable basis for our
             findings and conclusions based on our audit objectives. We believe the
             evidence obtained provides a reasonable basis for our findings and
             conclusions based on our audit objectives.


             Originally the Stevens Amendment was part of appropriations acts for the
Background   Departments of Defense (DOD) and Agriculture (USDA), as well as DOL,
             HHS, and Education. The provision was dropped from the DOD
             appropriations act in 1990 and from the USDA appropriations act in




             Page 4                                         GAO-19-282 Grants Management
                                                                 1993. 6 For the version of this requirement that applied to DOL, HHS, and
Stevens Amendment                                                Education, the Stevens Amendment has appeared in all but one of the full
When issuing statements, press releases,                         appropriations acts passed in Congress since 1993. 7 In proposing the
requests for proposals, bid solicitations and
other documents describing projects or                           amendment in 1988, Senator Ted Stevens described the role of states,
programs funded in whole or in part with                         local governments, and the federal government in forging a partnership to
Federal money, all grantees receiving
Federal funds included in this Act, including                    share in the costs of many projects and said that the federal contribution
but not limited to State and local governments                   should be identified as a matter of taxpayer concern. Further, Senator
and recipients of Federal research grants,
shall clearly state                                              Stevens said that taxpayers “ought to be informed how much money
1.    the percentage of the total costs of the                   comes from Federal sources in any program, project, or grant activity.” 8
      program or project which will be                           More recently, the Consolidated Appropriations Act of 2018 and the
      financed with Federal money;                               appropriations for these agencies in 2019 renewed this requirement for
2.    the dollar amount of Federal funds for                     DOL, HHS, and Education (see sidebar). 9
      the project or program; and
3.    percentage and dollar amount of the
      total costs of the project or program that                 The combined amount of grant funding that went to state and local
      will be financed by non-governmental                       governments from these three departments in federal fiscal year 2017
      sources.                                                   amounted to approximately $504 billion, or almost 75 percent of the $675
Consolidated Appropriations Act of 2018, Pub. L. No. 115-
141, 132 Stat. 348, div. H, Title V, Sec. 505 (Mar. 23, 2018).   billion total distributed by all federal grant-making agencies to state and
                                                                 local governments that year. HHS had the largest amount of grant outlays
                                                                 to state and local governments with about $455 billion (67.4 percent of


                                                                 6
                                                                  Although the provision was dropped from USDA’s annual appropriations acts, a different
                                                                 two-part formulation of the Stevens Amendment was subsequently included in USDA’s
                                                                 general permanent statutory authority at 7 U.S.C. § 2209d.
                                                                 7
                                                                  While we have previously reported on grantee monitoring practices of DOL, HHS, and
                                                                 Education, we have not done so with regard to the Stevens Amendment. Our prior work
                                                                 on grants monitoring includes: GAO-17-266, Discretionary Grants: Education Needs to
                                                                 Improve Its Oversight of Grants Monitoring, (Washington, D.C.: Apr. 18, 2017);
                                                                 GAO-14-832, International Labor Grants: DOL’s Use of Financial and Performance
                                                                 Monitoring Tools Needs to be Strengthened (Washington, D.C.: Sept. 24, 2014);
                                                                 GAO-14-800, Health Resources and Services Administration: Action Taken to Train and
                                                                 Oversee Grantee Monitoring Staff, but Certain Guidance Could Be Improved (Washington,
                                                                 D.C.: Sept. 23, 2014). See also GAO’s Key Issues page on Federal Grants to State and
                                                                 Local Governments.
                                                                 8
                                                                  Specifically, Senator Stevens stated that his amendment proposed “that any
                                                                 announcement or publication of these programs specifically and fully identify the Federal
                                                                 contribution. I believe that this approach respects the roles of all participants in such
                                                                 projects, while insuring that the beneficiaries of these activities can perceive the
                                                                 cooperative role of all levels of government.” 134 Cong. Rec. S20831-32 (1988)
                                                                 (Statement of Sen. Stevens).
                                                                 9
                                                                  Consolidated Appropriations Act of 2018, Pub. L. No. 115-141, 132 Stat. 348, div. H, Title
                                                                 V, § 505, and Department of Defense and Labor, Health and Human Services, and
                                                                 Education Appropriations Act, 2019, and Continuing Appropriations Act, 2019, Pub. L. No.
                                                                 115-245, div. B, tit. V, § 505, 132 Stat. 2981 (Sept. 28, 2018).




                                                                 Page 5                                                     GAO-19-282 Grants Management
                         the total), Education distributed about $42 billion (6.2 percent), while
                         Labor distributed about $7 billion (1.1 percent). 10


                         Generally, agencies or their subdivisions provided grantees with the exact
DOL, HHS, and            text of the Stevens Amendment, paraphrased its language, or in some
Education Generally      cases referred grantees to other guidance containing the Stevens
                         Amendment. Figure 1 summarizes what we found at each of the three
Provide Grantees         agencies we reviewed with regard to the Stevens Amendment guidance
with the Exact Text of   they provide to grantees.
the Stevens
Amendment or a
Paraphrased
Equivalent




                         10
                            Because these figures were calculated using the table of outlays and budget authority in
                         Chapter 14 of the 2019 Analytical Perspectives, “Aid to State and Local Government,”
                         they only represent grant outlays to state and local governments and do not include grants
                         to other entities such as universities and nonprofit institutions. Consequently, the dollar
                         figures cited likely understate the total grant amounts distributed by these departments.




                         Page 6                                                    GAO-19-282 Grants Management
Figure 1: Written Stevens Amendment Guidance Provided By DOL, HHS, and Education to Grantees, 2018




                                       Note: The Department of Labor (DOL) subagencies listed are the Employment and Training
                                       Administration (ETA), the Occupational Safety and Health Administration (OSHA), the Mine Safety
                                       and Health Administration (MSHA), the Bureau of Labor Statistics (BLS), the Chief Evaluation Office
                                       (CEO), the Bureau of International Labor Affairs (ILAB), Veterans’ Employment and Training Service
                                       (VETS), the Women’s Bureau (WB), and the Office of Disability Employment Policy (ODEP). The
                                       Department of Health and Human Services (HHS) operating divisions listed are the Agency for
                                       Healthcare Research and Quality (AHRQ), the Office of the National Coordinator for Health
                                       Information Technology (ONC), the Office of the Assistant Secretary for Health (OASH), the
                                       Substance Abuse and Mental Health Services Administration (SAMHSA), the Food and Drug
                                       Administration (FDA), Centers for Medicare and Medicaid Services (CMS), Administration for
                                       Children and Families (ACF), Health Resources and Services Administration (HRSA), National
                                       Institutes of Health (NIH), and the Centers for Disease Control and Prevention (CDC).



                                       Page 7                                                           GAO-19-282 Grants Management
                           a
                            DOL does not publish grantee guidance at the departmental level, and DOL’s subagencies have
                           their own guidance, as shown in this figure.
                           b
                            According to BLS officials, documents produced by their grantees do not fall within the scope of the
                           Stevens Amendment; therefore they do not include a reference to the Stevens Amendment in their
                           guidance.
                           c
                           ETA disseminates its standard terms and conditions template to grantees on behalf of these five
                           DOL grant-making subagencies.




DOL Instructed Grantees    According to ETA officials, grants from DOL’s ETA comprised more than
to Follow Stevens          95 percent of DOL’s $22.1 billion in active grant awards as of October 1,
                           2018. 11 ETA’s Office of Grants Management (OGM) developed standard
Amendment Requirements
                           terms and conditions that serve as a template for written agreements for
by Providing a Template    grant awards. The terms and conditions template includes language
for Language in            largely similar to the Stevens Amendment, with one instance of
Subagencies’ Grant Terms   paraphrasing, which is permissible under the relevant regulations. 12
and Conditions             ETA’s paraphrased language states that the Stevens Amendment
                           requirements apply to “all non-federal entities receiving federal funds,”
                           whereas the actual Stevens Amendment wording is that the requirements
                           apply to “all grantees receiving federal funds in this Act, including but not
                           limited to state and local governments and recipients of federal research
                           grants.” 13 The Stevens Amendment has been in the agency’s terms and
                           conditions library for grant awards since fiscal year 2014. ETA officials
                           said they added the Stevens Amendment requirements to the terms and
                           conditions because they wanted to ensure that grantees knew about the
                           Stevens Amendment’s existence.

                           ETA also disseminates its standard terms and conditions template to
                           grantees on behalf of five other DOL grant-making subagencies, including
                           the Veterans Employment and Training Service, the Chief Evaluation
                           Office, the Bureau of International Labor Affairs, the Women’s Bureau,
                           and the Office of Disability Employment Policy. According to ETA officials,
                           OGM administers the front-end application processing for grants awarded
                           by these subagencies, while the subagencies are responsible for any
                           post-award grantee oversight. OGM also administers the final grant
                           closeout for these subagencies. According to DOL officials, together with


                           11
                             ETA officials said that their active grant awards include fiscal year 2018 grants as well
                           as multi-year grant funds.
                           12
                               2 C.F.R. § 200.300(a).
                           13
                               DOL/ETA Standard Federal Award Terms & Conditions – FY2018, at 23 (2018).




                           Page 8                                                            GAO-19-282 Grants Management
                            ETA, these subagencies awarded more than 99.8 percent of DOL’s active
                            grant funds as of October 2018.

                            According to DOL officials, three other DOL grant-making subagencies,
                            the Mine Safety and Health Administration (MSHA), the Occupational
                            Safety and Health Administration (OSHA), and the Bureau of Labor
                            Statistics (BLS), administer their sub-agencies’ grant award processes
                            themselves. Officials said that two of these agencies, MSHA and OSHA,
                            disseminate their own separate grant award terms and conditions, and
                            have their own separate guidance for grantees regarding compliance with
                            the Stevens Amendment. For example, OSHA paraphrased the Stevens
                            Amendment language in its terms and conditions. OSHA officials told us
                            that instead of stating the amendment’s requirements in three parts,
                            OSHA broke them out into four requirements that reflect the full content of
                            the Stevens Amendment’s original language. MSHA also had its own
                            terms and conditions that contain the exact language of the Stevens
                            Amendment’s requirements, according to officials. The third agency, BLS,
                            told us that its grantees only produce narrowly focused press releases
                            and that these documents do not fall within the Stevens Amendment
                            description of documents “describing projects or programs funded in
                            whole or in part with Federal money.” BLS officials said that since none of
                            the other qualifying public statements mentioned in the Stevens
                            Amendment are part of BLS grantee operations, BLS cooperative
                            agreements do not produce public statements that qualify for Stevens
                            Amendment compliance.


Most HHS Grant Guidance     At the department level, HHS publishes a Grants Policy Statement that
Restated, Paraphrased, or   contains language equivalent to the Stevens Amendment, but it does not
                            quote the amendment verbatim. 14 Consistent with the Stevens
Referenced the Stevens
                            Amendment, the Grants Policy Statement provision directs grantees to
Amendment                   disclose information on the percentage and dollar amount of federal
                            contributions to grantees’ programs or projects in addition to the same

                            14
                              HHS Grants Policy Statement, U.S. Department of Health and Human Services, Office
                            of the Assistant Secretary for Resources and Technology, Office of Grants, Jan. 1, 2007.
                            The HHS Grants Policy Statement states in part, “Acknowledgment of Federal Funding:
                            As required by HHS appropriations acts, all HHS recipients must acknowledge Federal
                            funding when issuing statements, press releases, requests for proposals, bid invitations,
                            and other documents describing projects or programs funded in whole or in part with
                            Federal funds. Recipients are required to state (1) the percentage and dollar amounts of
                            the total program or project costs financed with Federal funds and (2) the percentage and
                            dollar amount of the total costs financed by nongovernmental sources.”




                            Page 9                                                    GAO-19-282 Grants Management
information for nongovernmental sources, but collapses the three Stevens
Amendment requirements into two requirements with slight wording
changes. Officials told us that HHS expects its operating divisions to
follow the Grants Policy Statement together with the relevant HHS
regulations, but does not instruct operating divisions on what to include in
their grant award terms and conditions. 15

A number of HHS operating divisions provide grantees with grant award
terms and conditions that contain the exact language of the Stevens
Amendment. Examples include:

•     Centers for Disease Control and Prevention (CDC) - Provides
      grantees with general terms and conditions for both research and
      non-research grants and cooperative agreements that include a
      requirement for an “Acknowledgement of Federal Support” that is an
      exact re-statement of the Stevens Amendment.
•     Health Resources and Services Administration (HRSA) - Provides
      grantees with the Standard Form 424 Application Guide (grants
      application guide), which includes a section that quotes the exact
      language of the Stevens Amendment.
•     Office of the National Coordinator for Health Information Technology
      (ONC) - Added a section in 2018 to the terms and conditions section
      for every Funding Opportunity Announcement that specifically
      references the Stevens Amendment verbatim. 16

One operating division, the Centers for Medicare and Medicaid Services
(CMS) provides grantees with a section of its terms and conditions titled
“Public Reporting” that shows the language of the Stevens Amendment,
but with the addition of tribal governments to the list of applicable grant
recipients. Another operating division, the National Institutes of Health
(NIH), publishes its own grants policy statement separate from the one
published by HHS. The NIH grants policy statement contains the standard
terms and conditions for all NIH grant awards. It uses the same Stevens
Amendment guidance language HHS uses, with the same paraphrasing


15
    The regulations which are specific to HHS are found at, 45 C.F.R. Pt. 75.
16
  Before ONC added a section in its terms and conditions in 2018 that specifically
referenced and restated the Stevens Amendment, it incorporated the Stevens Amendment
by reference to the HHS Grants Policy Statement in its Notice of Funding Opportunity
Announcements.




Page 10                                                     GAO-19-282 Grants Management
                         of the language that collapses the three Stevens Amendment
                         requirements into two requirements.

                         Four relevant HHS operating divisions told us that they relied solely on a
                         reference to the HHS Grants Policy Statement to instruct grantees with
                         regard to the Stevens Amendment requirements. This reference made no
                         specific mention of the Stevens Amendment and did not include either the
                         exact or paraphrased Stevens Amendment language in the agencies’
                         grant agreement terms and conditions or funding opportunity
                         announcement. 17


HHS’s HRSA Provided      HRSA’s “Acknowledgement of Federal Funding” provision in its grants
Additional Guidance to   application guide contains the exact language of the Stevens Amendment
                         and its requirements. Further, HRSA’s application guide provides
Help Grantees Comply
                         grantees with what HRSA officials stated was a sample
with the Stevens         acknowledgement and disclaimer paragraph written in “plain language”
Amendment                that the operating division developed to assist HRSA grantees in
                         complying with the Stevens Amendment. HRSA officials said that they
                         consulted with HHS’s Office of General Counsel to simplify the language,
                         while ensuring that it met the requirements of the Stevens Amendment.
                         HRSA’s sample acknowledgement and disclaimer paragraph reads,

                                   “This [project/publication/program/website] [is/was] supported by
                                   the Health Resources and Services Administration (HRSA) of the
                                   U.S. Department of Health and Human Services (HHS) as part of
                                   an award totaling $XX with xx percentage financed with
                                   nongovernmental sources. The contents are those of the author(s)
                                   and do not necessarily represent the official views of, nor an
                                   endorsement, by HRSA, HHS or the U.S. Government.”

                         Later in the section, HRSA further defines the Stevens Amendment’s
                         “other documents describing projects or programs” as including, among
                         other things, HRSA-supported documents such as manuals, toolkits,
                         resource guides, case studies, and issues briefs.

                         In addition to HRSA’s efforts to interpret the Stevens Amendment, HRSA
                         posted a web page in October 2018 that provided grantees with additional

                         17
                           These HHS operating divisions include the Administration for Children and Families,
                         Agency for Healthcare Research and Quality, the Food and Drug Administration, and the
                         Office of the Assistant Secretary for Health.




                         Page 11                                                 GAO-19-282 Grants Management
                           written guidance and a list of “frequently asked questions” about
                           communicating and acknowledging federal funding. 18 The HRSA web
                           page provided examples of HRSA disclosure statements to show
                           grantees how disclosure language should be drafted to comply with the
                           Stevens Amendment. The web page also featured frequently asked
                           questions, one of which clarified that the disclosure should reflect the
                           overall amount of the grant rather than the cost of developing the
                           publication where the acknowledgement appears. The other frequently
                           asked question directed grantees to consult with HRSA officials if they
                           intend to use language that differs from the examples provided to ensure
                           that their alternative wording complies with the Stevens Amendment
                           requirements.

                           HRSA officials also instructed their grantees on compliance with grant
                           award terms and conditions, including the Stevens Amendment, through
                           informal discussions during workshops and conference calls. HRSA
                           officials provided examples of Stevens Amendment discussions such as a
                           May 2018 Healthy Grants Workshop presentation to grantees, as well as
                           a July 2018 question and answer period during an HRSA conference call
                           with grantees. The grantee conference call featured several HRSA
                           presenters, including one representing the Division of Grants Policy.
                           Officials said that during these technical assistance calls, HRSA wanted
                           to ensure that grantees were made aware of legislative mandates, but the
                           calls were not tailored to focus on a specific mandate.


Education’s Grant Awards   Education grantees that receive discretionary and formula grants are
Terms and Conditions       provided with information on the Stevens Amendment through a Grant
                           Award Notification attachment. The attachment is included with the terms
Contain Paraphrased
                           and conditions of the grant award and has the exact language of the
Stevens Amendment          Stevens Amendment’s requirements, but paraphrases with regard to the
Language                   types of entities to which the Stevens Amendment applies. Instead of
                           applying the requirements to “all grantees receiving federal funds
                           included in this act including but not limited to state and local
                           governments and recipients of federal research grants” as noted in the
                           Stevens Amendment, Education’s phrasing applies the requirements
                           specifically to “U.S. Department of Education grantees.” According to
                           Education officials, the grant notification process involves providing

                           18
                             For HRSA’s webpage on Communicating and Acknowledging Federal Funding see,
                           https://www.hrsa.gov/grants/manage/acknowledge-hrsa-funding, accessed October 24,
                           2018.




                           Page 12                                               GAO-19-282 Grants Management
                      guidance to grantees and ensuring that they are made aware of various
                      statutory requirements, including the Stevens Amendment. Education
                      officials told us that another way that their agency communicates
                      information about the Stevens Amendment to grantees is through
                      Education’s required post-award conference call, during which the
                      program offices reinforce grant recipients’ need to be aware of the
                      requirements.


                      The regulations that govern DOL, HHS, and Education’s management of
DOL’s ETA Managed     grant awards state that “the Federal awarding agency must manage and
Compliance with the   administer the federal award in a manner so as to ensure that Federal
                      funding is expended and associated programs are implemented in full
Stevens Amendment     accordance with U.S. statutory and public policy requirements.” 19 The
through Its Grantee   Stevens Amendment is a statutory requirement that these federal
                      agencies must ensure is implemented by their grantees. Agencies’
Monitoring            management of the grant award so as to ensure implementation of the
Processes, Though     Stevens Amendment can be accomplished by various means, including
                      the monitoring of grantees, through processes such as reviews of grantee
Most HHS Operating    reports and correspondence, desk audits, and grantee site visits. In our
Divisions and         review of Stevens Amendment grants management practices at DOL,
                      HHS, and Education, we found that DOL’s ETA had processes in place
Education Did Not     that were able to identify instances of grantee noncompliance with the
                      Stevens Amendment and demonstrate that noncompliance was being
                      remedied. 20 ETA’s grants management processes took the form of
                      grantee monitoring. Figure 2 below summarizes the Stevens Amendment
                      monitoring practices of DOL, HHS, and Education.




                      19
                       45 C.F.R. § 75.300(a); 2 C.F.R. § 200.300(a)
                      20
                        As of October 2018, according to DOL officials, active grant awards for their agency
                      totaled approximately $22.1 billion. The remaining DOL grant dollars, almost 5 percent,
                      were divided between DOL’s eight other subagencies. These grant making subagencies
                      are Bureau of Labor Statistics, Chief Evaluation Office, Bureau of International Labor
                      Affairs, Mine Safety and Health Administration (MSHA), Occupational Safety and Health
                      Administration (OSHA), Office of Disability Employment Policy, Veterans’ Employment
                      and Training Service, and Women’s Bureau.




                      Page 13                                                  GAO-19-282 Grants Management
                        Figure 2: Stevens Amendment Monitoring Practices at DOL, HHS, and Education




ETA Had Processes for   ETA officials told us that their subagency’s active grants represented
Managing Grantee        more than 95 percent of DOL’s total active grant dollars, or approximately
                        $21.1 billion. According to ETA officials, their operating plan for grant
Compliance with the
                        oversight targets 26 percent of the active ETA grants universe for
Stevens Amendment       monitoring each fiscal year, representing approximately 2,100 grants in
                        fiscal year 2019. The regional office staff in each of ETA’s six regional
                        offices conduct a risk analysis of the grants within their regions and
                        assign a risk rating to each grant indicating its risk level. The grant’s risk
                        level, which includes factors such as the dollar amount of the grant award
                        and whether the grantee is on track to meet the grant’s performance
                        goals, determines which grants ETA selects for monitoring and inclusion
                        in its regional monitoring plans for that fiscal year.

                        Each annual regional monitoring plan consists of a list of grants and
                        schedule of ETA staff monitoring reviews. According to ETA, monitoring
                        reviews are used to measure grantee progress toward achieving project
                        goals, identify areas of grantee compliance, offer opportunities for
                        technical assistance to help resolve compliance issues, and ensure that
                        federal funds are used responsibly. ETA conducts these reviews either
                        through an on-site monitoring visit or an “Enhanced Desk Monitoring
                        Review” that is conducted remotely. ETA officials stated the regional



                        Page 14                                           GAO-19-282 Grants Management
monitoring plans are designed to be flexible management tools, and are
updated throughout each fiscal year to ensure that ETA meets its
operating plan’s goal to monitor 26 percent of its grants annually.

According to ETA’s Grantee Handbook, upon completion of the
monitoring review, ETA drafts a monitoring report to each of the grantees
reviewed. The monitoring report includes, among other things,
compliance findings and the required grantee corrective action for any
noncompliance with the findings, along with the due date for the
corrective action. In response to our request for examples of grantee
noncompliance with the Stevens Amendment requirements, ETA officials
from each of the agency’s six regional offices conducted a manual search
of monitoring reports from fiscal years 2016 and 2017.

ETA officials in four of the six ETA regional offices located monitoring
reports with a finding stating that grantees’ public materials did not
include the Stevens Amendment’s required language or information to
properly identify the project’s federal funding dollar amount and the
project’s percentage of federal and nongovernmental funding. Three of
the four monitoring reports provided the grantee with the exact language
of the Stevens Amendment and instructed the grantee to ensure that
statements, such as brochures, promotional materials, and other public
announcements, contain a statement that identifies the project’s funding
sources in accordance with the three requirements of the Stevens
Amendment.

In the fourth monitoring report, while finding that the grantee did not
include the required funding source statement in its documents, ETA’s
comments in the monitoring report did not provide the grantee with the full
language of the Stevens Amendment and had omitted the requirement to
provide the percentage and dollar amount of costs financed by
nongovernmental sources. For each of these examples, ETA officials
showed that the grantees subsequently corrected their documents to
bring them into compliance with the Stevens Amendment requirements.
In the fourth example, the grantee’s subsequent inclusion of the required
funding source statement in its documents showed that the program was
100 percent funded by federal dollars.

In August 2018, ETA also created a “Core Monitoring Guide” that
references the Stevens Amendment requirements as an element to be
monitored by ETA officials when speaking with grantees. ETA intended
this guide to be used as a tool in the on-site review of a grantee’s
activities, and it provides officials with a series of checklists as well as the


Page 15                                             GAO-19-282 Grants Management
steps to take when conducting monitoring. For Stevens Amendment
compliance, the guide includes a “Question for Review and Discussion”
that uses the exact language of the Stevens Amendment. However, the
Stevens Amendment is only one issue among many addressed in the
guide, and ETA officials said they do not have the resources to audit all of
the elements included in the guide. ETA officials said that their grant
reviewers select from one to four sections of the guide to use when
conducting monitoring, depending on the nature of the grant, and that the
choice of which items to monitor is based on a risk analysis of the grantee
and the grant projects’ quarterly financial reports. ETA officials
acknowledged that the scope of their monitoring overall is limited to 26
percent of their grant universe for a given fiscal year, therefore the extent
of noncompliance among ETA grantees cannot be determined.

Of the eight DOL subagencies we spoke to other than ETA, two, OSHA
and BLS, stated that they did not monitor grantees for compliance with
Stevens Amendment requirements. These subagencies’ officials said
they did not monitor for Stevens Amendment compliance because
monitoring is not explicitly required under the statute and, in the case of
BLS, because it believes that the type of press releases generated by
their grantees do not fall within the scope of the Stevens Amendment. Six
of the eight DOL subagencies told us that they conducted grantee
compliance monitoring. However, based on the information and
documents provided by officials from these six subagencies, they have
not demonstrated that they have processes to manage grantees’
compliance with the Stevens Amendment. For example, the Chief
Evaluation Office, the Bureau of International Labor Affairs (ILAB), and
the Veterans’ Employment and Training Service stated that they do not
track the extent of grantee compliance; and the Mine Safety and Health
Administration said that it does not maintain records of grantee
compliance with the Stevens Amendment. In addition, both ILAB and the
Women’s Bureau, while stating that they conducted monitoring of grantee
compliance with the Stevens Amendment, provided examples of grantee
disclosures that did not meet all of its requirements. Further, the Office of
Disability and Employment Policy (ODEP) said that all of its grantees
were fully compliant with the Stevens Amendment, but produced no
examples of grantee disclosures.

The Uniform Administrative Requirements that govern certain federal
agencies, including DOL, state with regard to the management of grants
that “the Federal awarding agency must manage and administer the
Federal award in a manner so as to ensure that Federal funding is
expended and associated programs are implemented in full accordance


Page 16                                           GAO-19-282 Grants Management
                          with U.S. statutory and public policy requirements.” 21 Other than ETA,
                          DOL’s subagencies have not developed the processes needed to
                          manage and administer grantees’ compliance with the Stevens
                          Amendment. Without these processes, these DOL subagencies are not
                          able to ensure that grant programs are being implemented by grantees in
                          full accordance with the statutory requirements of the Stevens
                          Amendment.


Most HHS Operating        At the department level, HHS officials said that they have no knowledge
Divisions Said They Did   about whether their operating divisions conduct monitoring and
                          enforcement of the Stevens Amendment, and they did not collect
Not Review Grantees for
                          information from their operating divisions on grantee compliance with the
Compliance with Stevens   Stevens Amendment’s requirements. According to HHS officials, any
Amendment Requirements    efforts to manage grant awards for adherence to Stevens Amendment
                          requirements would be carried out by staff at the agency’s 10 relevant
                          operating divisions. HHS officials said that operating divisions have an
                          obligation to monitor their grantees for compliance with all of the agency’s
                          standard grant award terms and conditions, which includes the Stevens
                          Amendment.

                          Of the 10 relevant HHS operating divisions we spoke with in our review,
                          officials from eight of them—the Administration for Children and Families
                          (ACF), the Agency for Healthcare Research and Quality (AHRQ), the
                          Centers for Disease Control and Prevention (CDC), the Food and Drug
                          Administration, the Health Resources and Services Administration
                          (HRSA), the National Institutes of Health (NIH), the Office of the Assistant
                          Secretary for Health (OASH), and the Substance Abuse and Mental
                          Health Services Administration—told us that they did not monitor
                          grantees’ compliance with Stevens Amendment requirements. Two of
                          these operating divisions, ACF and AHRQ, further stated that the Stevens
                          Amendment did not require them to monitor for grantee compliance.
                          These operating divisions maintained the position that they are not
                          required to monitor for grantee compliance despite HHS policy regarding
                          operating division monitoring of grants that states “…to fulfill their role in
                          regard to the stewardship of Federal funds, OPDIVs monitor their grants
                          to identify potential problems and areas where technical assistance might
                          be necessary. This active monitoring is accomplished through review of
                          reports and correspondence from the recipient, audit reports, site visits,

                          21
                           2 C.F.R. § 200.300(a).




                          Page 17                                           GAO-19-282 Grants Management
and other information available to the OPDIV.” 22 As mentioned earlier in
this report, agencies are required to manage grant awards and have a
number of possible means available to do so—including grant monitoring.
However, grant monitoring is not explicitly required by the Stevens
Amendment.

NIH officials stated that they do not specifically monitor for Stevens
Amendment compliance and that NIH officials have not received any
reports of noncompliance with the Stevens Amendment. They said they
would address any non-compliance issues if they were raised. Similar to
NIH, HRSA officials told us that they conduct grantee monitoring, but do
not specifically review grantee documents for compliance with Stevens
Amendment requirements unless there is a cause for concern regarding
noncompliance. Similarly, CDC officials said that their grantee monitoring
practices do not specifically target Stevens Amendment compliance. CDC
officials further explained that while grant program officers may find
instances of noncompliance during a grant review, it would be tangential
to other issues more central to the focus of the grant review, such as
grantee financial performance and goal accomplishment.

Officials from OASH stated that while they do not specifically review
grantees’ written statements for Stevens Amendment compliance, they
provide grantees with guidance regarding how to comply with its
requirements. For example, a grantee asked whether a Stevens
Amendment acknowledgement statement had to be included on
billboards the recipient rented to promote their program’s services. OASH
determined that the grantee did not need to include the statement on the
billboards.

ONC officials told us that all of their grantees were in compliance with the
Stevens Amendment. ONC officials stated that while they do not
specifically look for Stevens Amendment compliance, it was their belief
that ONC monitoring practices would identify instances of noncompliance
for their small number of grantees. 23 ONC officials told us their belief is
based on interactions with a wide range of grantees’ employees during


22
  HHS Grants Policy Statement, U.S. Department of Health and Human Services, Office
of the Assistant Secretary for Resources and Technology, Office of Grants, Jan. 1, 2007.
The term “OPDIV” is an abbreviation used by HHS to refer to its operating divisions.
23
 ONC had 13 active grants as of April 2018.




Page 18                                                   GAO-19-282 Grants Management
monitoring visits that seek to ensure that all compliance issues among
their grantees are addressed.

The remaining HHS operating division in our review, CMS, told us that its
monitoring processes include reviews for Stevens Amendment
requirements and that CMS had a process for reviewing grantee
documents. According to HHS policy, the results and accomplishments of
the activities CMS funds should be made public and CMS requires
grantees to make the results and accomplishments of their activities
available to the research community and to the public at large. The
grantee must submit any materials to CMS in advance of publication,
including brochures, recruitment materials, informational materials,
advertisements, website copy, website pages, videos, and op-ed articles
that report results from or describe information obtained through the grant
award. CMS officials told us they reviewed for Stevens Amendment
compliance, and provided us with examples of materials they said were
from grantees that were in compliance. However, in our analysis of the
sample grantee materials from CMS, we found that the grantees were not
in compliance with the cost requirements of the Stevens Amendment.

Despite the claims and efforts of some HHS operating divisions with
regard to monitoring for Stevens Amendment compliance, none of HHS’s
operating divisions could demonstrate that they had a process to manage
and administer grantees’ compliance with the Stevens Amendment
requirements. In addition to the previously-mentioned Uniform
Administrative Requirements applicable to all grant awards, HHS
regulations that govern the agency’s grant making state that, “The
Federal awarding agency must manage and administer the Federal
award in a manner so as to ensure that Federal funding is expended and
associated programs are implemented in full accordance with U.S.
statutory and public policy requirements.” 24 Further, these regulations
also state, “The Federal awarding agency must communicate to the non-
Federal entity all relevant public policy requirements, including those in
general appropriations provisions, and incorporate them either directly or
by reference in the terms and conditions of the Federal award.” 25

Neither HHS, nor its operating divisions, had developed processes to
manage and administer grantees’ Stevens Amendment compliance.

24
 45 C.F.R. § 75.300(a).
25
 45 C.F.R. § 75.300(a).




Page 19                                         GAO-19-282 Grants Management
                      Without having processes to manage and administer their grantees’
                      compliance with the Stevens Amendment, which is included in HHS’s
                      appropriations provisions, there is no way for HHS or its operating
                      divisions to ensure that grantees are in full accordance with the statutory
                      requirements of the Stevens Amendment appropriations provision and the
                      agency-communicated conditions of the federal award. 26 Further, without
                      monitoring grants in accordance with their Grants Policy Statement, HHS
                      and its operating divisions are not able to identify potential problems
                      related to grantees’ Stevens Amendment compliance.


Education Does Not    Education officials stated that its program offices do not explicitly track
Monitor for Grantee   individual grantees for Stevens Amendment compliance. Education
                      officials told us that their grant review process does not collect Stevens
Compliance with the
                      Amendment documentation nor do they gather information regarding the
Stevens Amendment     extent of grantee compliance with the appropriations provision. As a
                      consequence, Education cannot determine the extent of their grantees’
                      compliance with the requirements of the Stevens Amendment. 27

                      Representatives from Education’s Office of General Counsel stated that
                      Education has an “obligation to correct” instances of Stevens Amendment
                      noncompliance, but does not have an “obligation to monitor” its grantees
                      to determine whether they are in compliance. Education officials told us
                      that due to limited resources, they use risk assessment results to identify
                      and prioritize which items among their standard terms and conditions they
                      will monitor during the course of a grant review. Officials told us they had
                      not received any complaints related to the Stevens Amendment.

                      The uniform regulations that govern federal agencies, including
                      Education’s management of grants, state that “the Federal awarding
                      agency must manage and administer the federal award in a manner so as
                      to ensure that Federal funding is expended and associated programs are
                      implemented in full accordance with U.S. statutory and public policy
                      requirements.” 28 Education has not developed the processes it needs to
                      26
                       For example, Consolidated Appropriations Act, 2018, Pub. L. No. 115-141, div. H, title V,
                      Sec. 505, 132 Stat. 348 (Mar. 23, 2018).
                      27
                        In our prior work we found that Education grant staff did not consistently document key
                      required monitoring activities in the agency’s official grant files. GAO-17-266,
                      Discretionary Grants: Education Needs to Improve Its Oversight of Grants Monitoring,
                      (Washington, D.C.: Apr. 18, 2017).
                      28
                       2 C.F.R. § 200.300(a).




                      Page 20                                                   GAO-19-282 Grants Management
                       manage and administer grantees’ compliance with the Stevens
                       Amendment which is included in Education’s appropriations provisions.
                       Without these processes, Education is not able to ensure that grant
                       programs are being implemented by grantees in full accordance with the
                       statutory requirements of the Stevens Amendment appropriations
                       provision and the agency-communicated conditions of the federal award.


                       With two exceptions, the subagencies and operating divisions we
Most Subagencies       reviewed that stated they conducted monitoring had no information on the
and Operating          methods used by grantees to calculate the federal funding dollar amounts
                       or funding percentage figures required by the Stevens Amendment. As an
Divisions Monitoring   example, DOL’s ETA officials told us that they do not know how the dollar
Stevens Amendment      amounts reported by grantees were calculated, and they have not
                       inquired about the level of detail factored into indirect costs involving the
Compliance Did Not     grantee organization’s structure and the percentage of funds spent on
Gather Information     salaries. In addition, officials at DOL’s ILAB said that it is not always clear
                       how grantees calculate these costs, and the Stevens Amendment does
about Grantees’ Cost   not provide specific guidance on how costs should be determined.
Calculations           Officials also noted that some grantees expressed confusion regarding
                       the requirements and how to calculate the total federal funds, including in
                       cases where there may be collaboration across federally-funded
                       programs. Similarly, officials from HHS’s NIH operating division noted that
                       calculations can be difficult given that research programs can have
                       multiple funding streams that feed into a grant project and grantees’
                       research portfolios are now more complex than they have been in the
                       past.

                       Officials at one DOL subagency, ODEP, said that grantees calculate the
                       total funds received in the grant awarding document and that these funds
                       include negotiated indirect cost rates. The remainder of the DOL
                       subagencies and HHS operating divisions that produced examples of
                       either compliance or noncompliance with the amendment did not have
                       information on how grantees made their disclosure calculations. In
                       addition, officials at one HHS operating division, HRSA, said the HRSA
                       Notice of Award lists the total federal and non-federal amounts for the
                       grant project or program. Grantees can use this information to calculate
                       the percentage of federal funding and nongovernmental funding.
                       However, in the Stevens Amendment compliance examples that HRSA
                       provided to us, this calculation was not necessary because these projects
                       were 100 percent funded by the HRSA grant award. In addition, HRSA
                       officials told us that they are not aware of any other methods that
                       grantees would need to use to arrive at the percentage. With regard to


                       Page 21                                            GAO-19-282 Grants Management
                      indirect costs, HRSA officials said that these costs are already included in
                      the federal award amount and, therefore, any calculation of funding
                      percentage should already account for the inclusion of both direct and
                      indirect costs.


                      Congress has repeatedly taken action to include the Stevens Amendment
Conclusions           requirements with agencies’ appropriations. Ensuring grantee compliance
                      with accountability requirements is achieved through investment of
                      federal agency resources that reflect decisions regarding how best to
                      ensure efficient and effective use of grant funds while reinforcing statutory
                      requirements.

                      DOL’s largest grant making subagency, ETA, showed that its grantee
                      review processes were, to some extent, actively monitoring for Stevens
                      Amendment compliance and that when ETA found compliance issues, it
                      was able to provide grantees with the technical assistance needed to
                      correct them. While a couple of HHS operating divisions showed some
                      evidence that they were enhancing their guidance to grantees with regard
                      to the Stevens Amendment, none of the operating divisions could
                      demonstrate that they had a process to manage and administer grantees’
                      compliance with the Stevens Amendment requirements. Education
                      officials stated that while their agency does not have an “obligation to
                      monitor” its grantees to determine whether they are in compliance with
                      the Stevens Amendment, they do have an “obligation to correct”
                      instances of noncompliance if brought to their attention. While none of the
                      agencies in this review can determine the extent of their grantees’
                      compliance with the Stevens Amendment, DOL’s ETA has monitored
                      grantee compliance with the provision, and when noncompliance is found,
                      has taken steps to bring their grantees into compliance. However, with no
                      such processes in place, the remaining DOL subagencies, HHS’s
                      operating divisions, and Education are not able to manage or administer
                      grantee compliance with the Stevens Amendment appropriation provision
                      so as to ensure that grant funds are being expended in full accordance
                      with these statutory and regulatory requirements.


                      We are making a total of three recommendations, one to each of the
Recommendations for   three agencies in our review, to take steps to manage grantees’
Executive Action      compliance with the Stevens Amendment. Specifically:

                      The Secretary of Labor should direct its subagencies, other than ETA, to
                      design and implement a process to manage and administer grantees’


                      Page 22                                          GAO-19-282 Grants Management
                     compliance with the Stevens Amendment, including determining to what
                     extent to provide guidance to grantees on calculations. (Recommendation
                     1)

                     The Secretary of Health and Human Services should direct its operating
                     divisions to design and implement processes to manage and administer
                     grantees’ compliance with the Stevens Amendment, including
                     determining to what extent to provide guidance to grantees on
                     calculations. (Recommendation 2)

                     The Secretary of Education should design and implement a process to
                     manage and administer grantees’ compliance with the Stevens
                     Amendment, including determining to what extent to provide guidance to
                     grantees on calculations. (Recommendation 3)


                     We provided a draft of this report to DOL, HHS, and Education for review
Agency Comments      and comment. We received written concurrence from DOL, and written
and Our Evaluation   comment letters from DOL’s OSHA, HHS, and Education. The comment
                     letters are reprinted in appendixes I, II, and III, respectively and are
                     summarized below.


DOL                  DOL stated that it concurs with our recommendation. OSHA provided
                     written comments and stated that it generally agreed with GAO’s
                     recommendation. OSHA said it will take steps to establish processes to
                     monitor grantee compliance with Stevens Amendment requirements, to
                     include reviewing what assistance the agency can provide to grantees on
                     how to calculate funding percentages. OSHA further stated that it has
                     begun updating its grant and cooperative agreement instructions to
                     include the Stevens Amendment language verbatim, rather than
                     paraphrasing the language, and is adding guidance to grant monitoring
                     guidelines to assist OSHA’s Regional Offices in reviewing compliance
                     with the Stevens Amendment.

                     DOL subagencies ILAB, BLS, ETA, and ODEP also provided technical
                     comments, which we incorporated into the report where appropriate.


HHS                  In its written comments, HHS stated that it concurs with our
                     recommendation and would implement the recommendation to the fullest
                     extent feasible. HHS officials said they would direct all operating divisions
                     to design a process for implementing and monitoring the Stevens


                     Page 23                                           GAO-19-282 Grants Management
            Amendment and would update HHS grants policy to reflect this new
            process.

            HHS also provided technical comments, which we incorporated into the
            report where appropriate.


Education   Education provided written comments stating that it did not concur with
            our recommendation, but would consider enhancing its existing approach
            to compliance with the Stevens Amendment. We reiterate our
            recommendation that Education should design and implement a process
            to manage and administer grantees’ compliance with the Stevens
            Amendment, including determining to what extent to provide guidance to
            grantees on calculations.

            Education had three concerns regarding the recommendation. First,
            Education said that our recommendation is not based on any evidence of
            noncompliance with the Stevens Amendment by Education grantees. As
            noted in our report, we found that Education lacks information regarding
            whether its grantees are, or are not, complying with the requirements of
            the Stevens Amendment. As indicated in this report, Education officials
            told us that they do not collect documentation from grantees to monitor
            their compliance with the Stevens Amendment, nor do they analyze
            information regarding the extent of grantee compliance with the Stevens
            Amendment. As a consequence, Education does not know the extent to
            which its grantees are or are not complying with the statutory
            requirements of the Stevens Amendment. Without this knowledge,
            Education does not have assurance that its grant awards are managed
            and administered in accordance with federal regulations.

            Second, Education referred to its tiered risk-based approach to grantee
            monitoring that balances compliance requirements with limited monitoring
            resources in alignment with the President’s Management Agenda.
            According to Education, implementation of the recommendation would
            require them to devote limited resources to managing and administering
            grantee compliance with the Stevens Amendment when there is no
            evidence of grantee noncompliance. We acknowledge that the cross-
            agency priority goal in the President’s Management Agenda refers to
            maximizing the value of grant funding by applying a risk-based, data-
            driven framework that balances compliance requirements with
            demonstrating successful results. However, because Education does not
            collect information or documentation on this aspect of grantee
            compliance, it lacks the data needed to make an informed risk-based


            Page 24                                        GAO-19-282 Grants Management
assessment with regard to monitoring for Stevens Amendment
compliance. The recommendation could be implemented within the
context of Education’s risk-based approach to grantee monitoring as long
as Education gathers the grantee compliance information needed to apply
their risk-based, data-driven framework.

Third, Education said that it has already taken numerous steps to make
its process for awarding and overseeing grant funds transparent to the
public. However, these steps do not eliminate the legal requirements that
grantees must comply with the Stevens Amendment, and that federal
agencies, including Education, must manage and administer the federal
award in a manner that is fully in accordance with statutory requirements.
Education did state that it would consider enhancing its existing approach
to Stevens Amendment compliance with actions that further explain the
requirements to grant recipients. While such efforts could enhance
grantees’ understanding of the Stevens Amendment, they would not give
Education the grantee compliance information it needs to apply to a risk-
based, data-driven framework or to manage and administer its grant
awards in accordance with federal regulations. For all of these reasons
we continue to believe that our recommendation to Education is valid and
that Education should fully implement it.


We are sending copies of this report to the Secretaries of Labor, Health
and Human Services, and Education, as well as interested congressional
committees and other interested parties. In addition, the report is
available at no charge on the GAO website at http://www.gao.gov.

If you or your staff have any questions about this report, please contact
me at (202) 512-6806 or sagerm@gao.gov. Contact points for our offices
of Congressional Relations and Public Affairs may be found on the last
page of this report. GAO staff who made key contributions to this report
are listed in appendix IV.




Michelle Sager
Director, Strategic Issues




Page 25                                         GAO-19-282 Grants Management
Appendix I: Comments from the Department
             Appendix I: Comments from the Department of
             Labor’s Occupational Safety and
             Health Administration


of Labor’s Occupational Safety and
Health Administration




             Page 26                                       GAO-19-282 Grants Management
Appendix II: Comments from the Department
             Appendix II: Comments from the Department
             of Health & Human Services



of Health & Human Services




             Page 27                                     GAO-19-282 Grants Management
Appendix II: Comments from the Department
of Health & Human Services




Page 28                                     GAO-19-282 Grants Management
Appendix III: Comments from the
              Appendix III: Comments from the Department
              of Education



Department of Education




              Page 29                                      GAO-19-282 Grants Management
Appendix III: Comments from the Department
of Education




Page 30                                      GAO-19-282 Grants Management
Appendix III: Comments from the Department
of Education




Page 31                                      GAO-19-282 Grants Management
Appendix IV: GAO Contact and Staff
                  Appendix IV: GAO Contact and Staff
                  Acknowledgments



Acknowledgments


                  Michelle Sager, (202) 512-6806 or sagerm@gao.gov
GAO Contact
                  In addition to the contact named above, Tom James (Assistant Director),
Staff             Anthony Bova (Analyst-in-Charge), Jacqueline Chapin, Jehan Chase,
Acknowledgments   Robert Robinson, Wesley Sholtes, and Walter Vance made key
                  contributions to this report.




(102526)
                  Page 32                                       GAO-19-282 Grants Management
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