Terry Gerton Today, we’re diving into grants management—a recurring theme in GAO reports. You’ve examined it across multiple administrations and various crises, and you’ve just released another report highlighting ongoing challenges in this area. Before we explore the findings of this latest report, could you first explain what makes federal grants management so inherently complex. Can you set the stage for us?
Jeff Arkin Certainly. There are several factors at play. When we discuss grants management across the federal government, we’re referring to dozens of agencies overseeing more than a thousand distinct grant programs. Each program has unique objectives and aims to distribute funds to different types of recipients. This creates a highly intricate landscape with numerous moving pieces. Additionally, agencies must adhere to a wide array of requirements—federal laws, regulations, guidance from the Office of Management and Budget, and their own internal policies. So, there’s a significant amount of compliance and coordination involved.
Terry Gerton The report highlights that the federal government distributed $1.2 trillion in grants in 2024—exceeding the rest of the appropriations budget combined. It’s clearly not something that can be neatly categorized.
Jeff Arkin Exactly. It’s an enormous sum. In some years, it approaches 20% of total federal spending. This is something many people might not realize. A vast amount of money flows through agencies, which then allocate it to recipients—states, local governments, universities, and nonprofit organizations—to carry out policies and achieve the federal government’s objectives.
Terry Gerton When the federal government has attempted to reform grants management, it often seems to approach it from a financial perspective, treating it as an accounting issue. However, your report emphasizes that there are numerous operational challenges that need to be addressed. Is the government perhaps asking the wrong questions about grants management? Are we focusing on the wrong areas?
Jeff Arkin I agree that it’s fundamentally an operational challenge. While financial and accounting measures are certainly necessary, grants involve much more. Agencies must ensure that grants and grantees comply with the law, verify that the entities receiving funds are the intended recipients, and navigate a selection process for discretionary or competitive grants. They also need to work to prevent improper payments and fraud. There are countless operational hurdles that agencies must carefully manage throughout the grants management process.
Terry Gerton Perhaps one of the most significant operational challenges is staffing. Your report points to shortages of trained grant personnel and inconsistent levels of experience across agencies, likely exacerbated by recent personnel transitions. When you assessed the overall system, did you find that much of it relies on individual expertise rather than standardized, repeatable processes?
Jeff Arkin I’d say it’s a combination of both. Agencies do have established processes, some of which have been in place for a long time. These processes also evolve to keep up with changing laws, requirements, and regulations. However, it’s crucial that agencies ensure their staff possess the skills needed to administer and oversee grant programs effectively. A key way to achieve this is through training. In the past, we’ve identified areas where agencies can improve how they manage and train their grants workforce—even basic steps like understanding who within the agency works on grants to ensure they receive proper training. There are also challenges in evaluating training effectiveness to confirm it’s genuinely helping individuals meet agency goals and fulfill the statutory purposes of the programs.
Terry Gerton I’m speaking with Jeff Arkin, Director of Strategic Issues at GAO. Jeff, the report ultimately focuses on government-wide collaboration and discusses the Council on Federal Financial Assistance, or COFFA, at length. How is that organization functioning these days?
Jeff Arkin COFFA is the latest in a long line of federal efforts to foster collaboration on grants, enabling the various agencies that issue grants to come together, share best practices, and address challenges that affect all agencies. It’s only been operational for a couple of years, so it’s still in its early stages, but we’re optimistic. We believe efforts like this are important and hopeful that it will help tackle some of these challenges. It was established to improve coordination, transparency, and accountability of federal grants, provide strategic direction across the government, make policy recommendations, and set priorities for government-wide grants-related activities. From what we’ve observed so far—again, it’s still getting started—we’ve received positive feedback from agencies about how it’s functioning and how it has enabled collective input on guidance issued by the Office of Management and Budget. It will be an interesting development to monitor in the coming years to see how effective it truly becomes.
Terry Gerton One of COFFA’s key purposes is to serve as a shared forum for lessons learned. Has that function survived the recent administration transition?
Jeff Arkin From what we’ve seen, COFFA is still active and continues to hold meetings. Each of the CFO Act agencies sends one representative, and there’s also a representative who voices the perspectives of smaller agencies. They’ve continued to meet and discuss lessons learned. While we don’t attend the meetings ourselves, we’ve reviewed various materials—seminars, webcasts, and other outputs—that have emerged from these efforts. I should note that this initiative is co-led by the Office of Management and Budget and the Department of Health and Human Services, which is the largest grant-making agency in the federal government. The feedback we’ve received from HHS in particular suggests that progress is being made.
Terry Gerton Another issue that GAO frequently raises in its reports is incentives. Are programs designed with the right incentives to encourage compliance and improvement? When it comes to grants management, are there sufficient incentives for agencies to take the time to coordinate, or is it more of a
Is there pressure to distribute funds quickly, or does collaboration and coordination take priority?
Jeff Arkin It’s a bit of both. During the COVID-19 pandemic, there was a clear push to get money out fast. Some programs have specific timelines—like those for K-12 schools, where funding is most useful at the start of the school year, not halfway through. So yes, there’s pressure to move quickly. Ideally, though, the systems should be ready beforehand to manage these programs properly, meet all requirements, and ensure the money reaches the right recipients.
Terry Gerton The Trump administration has emphasized cracking down on waste, fraud, and abuse in benefit and grant programs. Given the different structures of grant programs, do you see a conflict between making grants easy for recipients to access versus adding oversight and compliance steps to prevent misuse?
Jeff Arkin That question touches on one of the biggest challenges in grants management: balancing oversight and burden. You could place a federal employee at every grant-receiving institution to ensure everything goes as planned, but that would be extremely costly and burdensome. On the other hand, just sending money without oversight invites fraud. The key is finding a middle ground—having processes to detect fraud early, ensuring funds don’t go to ineligible entities, and letting agencies manage fraud risk, while also allowing recipients to focus on the grant’s main goal: achieving the intended outcome. It’s a tough balance to strike.
Terry Gerton In the near term, where do you see the best chances to improve grant management for better results and oversight?
Jeff Arkin One area with a lot of activity is the initial stage—the notice of funding opportunity. Agencies use these to announce a grant program, the available funds, and the goal. In the past, these were often complex. Large organizations, like states, may have many staff who know how to navigate these and write proposals. Smaller groups without those resources may struggle. Recently, there’s been a push to make it easier for less-resourced organizations to compete for grants on equal footing with larger, better-funded ones.
Terry Gerton I’m sure you’ll keep investigating this, and we’ll see more reports.
Jeff Arkin Absolutely.
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