Best laid plans: Here are a few steps cities and counties should take when a federal grant comes their way

Part 1 of this report on managing federal grants and funds appeared in the June 2023 issue of Government Procurement.

In recent years, Congress has approved legislation giving local governments access to new sources of federal grants and funds. The laws include: American Rescue Plan Act (APRA), Coronavirus Aid, Relief, and Economic Security Act (CARES), Infrastructure Investment and Jobs Act (IIJA) and IRA-Inflation Reduction Act (IRA).

“The legislation saturated our world with hundreds of billions in federal funds, and by saturated, I mean Congress and federal officials got the funds into every nook and cranny,” says Emily Brock, director, Federal Liaison Center at the Government Finance Officers Association (GFOA). She points to the $560 billion in funds allocated in the IIJA as an example of the legislation’s deep impact. “That legislation was drafted specifically to be, not just additive to current and typical infrastructure programs. Congress really thought outside the box when it comes to infrastructure in the IIJA. They, for instance, looked at broadband, and concluded that broadband should be a part of it.”

The GFOA’s more than 23,000 members are finance officials at all levels of government involved in planning, financing and implementing thousands of governmental operations in each of their jurisdictions. The group offers professional education that covers sound management of government financial resources, including federal funds.

The recent big boost in federal funds available to local governments has greatly increased the need for qualified grants managers, says Tip Tucker Kendall, CAE, executive director for the National Grants Management Association(NGMA). She notes that there is a long on-ramp for someone to become highly proficient in grants administration.

And yes, more grants administrators have been hired. “We have seen a wave of new professionals entering the field in the last three years. In fact, our NGMA membership has more than doubled,” Tucker Kendall explains. She notes that cities and counties seeking federal grants for the first time will have the additional challenge of finding and onboarding personnel.

There are consequences to not properly administering federal grants and funds. “The stakes are quite high. Failure to manage the grant properly could result in their city or county not receiving future funds, having to return the money or even prosecution,” Tucker Kendall cautions.

The NGMA supports more than 4,000 professionals across grants management, including supervisory, support, accounting and compliance roles. The group also provides education, tools and resources to its members.

Cities and counties need to reach out to facilitators, initiators and enablers after they have won a federal grant or funding, says Amy Fenstermacher, senior manager, government & public sector at Ernst & Young LLP, and EY Americas grants and relief funds management leader. “About 80 percent of grant funding goes to recipients who receive more than one grant from more than one organization. This means that most of the available dollars keep following the same channels of distribution. Meanwhile, study after study demonstrates the efficacy of local implementers in achieving long-term results.”

Fenstermacher says for local officials to reach those implementers, they need to refocus on making grant programs accessible. “This requires strong public communications campaigns, robust networks of technical assistance partners to teach applicants the ropes, and efficient distribution mechanisms to help reduce administrative costs (which also helps make room for these other additional expenditures).”

Fenstermacher notes that the sharp increase in grant funding during the pandemic led to the growth of industry providers who offer various services to grant winners. These providers include professional services firms and industry partners. “As a result, many professional services firms have published a tremendous volume of thoughtful podcasts, white papers and articles introducing new ideas and recommending leading practices based on their observations with government agencies across the country.”

When city and county officials find out their jurisdiction has won a federal grant, they have several steps to complete at the start, says Gail Lalla, a business development representative, and grants manager for T&M Associates, a national consulting, engineering, environmental and technical services company that works with a number of public and private clients. These steps include bringing together all stakeholders involved in the grant administration and implementation process; ensuring agreement on the mission and timeline; determining responsibility for compliance with the grant scope; and accounting for all work performed under the grant, including hours, labor, invoicing, receipts and meeting times.

Lalla says technology, including an enterprise resource planning (ERP) system or grants management platform, can be helpful for managing federal grants. “It helps outline key aspects of the grant program and manage research for funding options. In these unprecedented times with a high number of grant resources available, it can be cumbersome to manage the workload without an ERP system.”

She adds that an ERP system is particularly helpful for complex grant programs that have multiple layers of funding sources, including state, local, county and federal. “It can also track in-kind contributions such as consultant time or donations from community nonprofits. An ERP system provides a one-stop solution for managing grant-funding guidelines and deadlines, making it an ideal tool for federal grant management.”

In 2023, there’s pressure to perform, says Jason Adolf, industry vice president, global public sector at Appian, a software company that automates business processes and offers the Appian AI-Powered Process Platform that includes everything needed to design, automate and optimize complex processes.

“Grant managers face numerous challenges developing and implementing effective systems to run and manage grants programs. Two of the biggest pain points for government agencies are a lack of performance reporting and multiple disparate systems.” Adolf adds that complex data sets in silos and lack of communication between inputs add to the challenges that administrators face.

He explains how things get complicated: “While city and county officials may be able to get by using Excel or a home-grown technology for a single grant, it is not a long-term solution. If their city or county gets awarded several grants, in a handful of disparate domains, it exponentially heightens the difficulty of tracking those reporting requirements. It can also create an enormous amount of pressure if these officials happen to encounter an influx of grants due to a major natural disaster hitting their town.”

Adolf notes that as recently as 2020, 35 percent of grantees had no database for reporting and still relied on email reporting. “In order to create a seamless program, agencies need to improve the ability to track and report outcomes and measure the performance of grant programs, which is achievable in a few simple steps.”

He says grants managers can achieve success by doing the following: They can implement automated performance reporting leveraging robotic process automation (RPA) and artificial intelligence (AI) solutions, such as intelligent document processing (IDP). “With IDP in place, agencies are able to automate document workflows by quickly and accurately extracting data from different document types. Automating this process allows grant managers to easily produce reports in real time using data from multiple systems, as well as enable agencies to create performance graphics and dashboards for grant programs. As a result, agencies can track overall usage of grant money, funds remaining, performance metrics and reporting schedules.”

Adolf notes that grant makers can no longer solely measure themselves by how quickly they get grant funding out the door or by a perfect record of grantee financial compliance. “Federal grant facilitators now have to be more serious about achieving mission goals and producing research results. Capturing performance data across all grantees—and sharing it openly online—will be a key step toward the accountability that the government is seeking.”

Bloomberg Philanthropies and the National League of Cities (NLC) recently opened registration for small- and mid-sized cities to participate in specialized training courses that aim to help local governments take advantage of some of the first grant opportunities that will be available as part of the Bipartisan Infrastructure Investment and Jobs Act. The training program is part of the recently announced Local Infrastructure Hub. The courses will be led by the NLC, featuring subject matter experts.

Indeed, federal grants management is becoming more important in local government, says Emily Brock at the GFOA. “We are a pretty popular organization, in particular, because a lot of our grants management resources are free and accessible.” She notes that group’s “Best Practices Grants Administration”  resource is the second most-clicked page that the GFOA has on its site. “People like the resource and it is useful because administrators can show the page to their elected officials in their jurisdiction.”

Michael Keating is senior editor for American City & County. Contact him at [email protected].