Summary
In the past 3 years, Education awarded an average of $4.8 billion annually in discretionary grants through its competitive awards process and through consideration of unsolicited proposals. GAO assessed Education's policies and procedures for both competitive awards and unsolicited proposals awarded by its Office of Innovation and Improvement in 2003 and 2004 and determined whether it followed them in awarding grants in those years. GAO also reviewed Education's grant award decisions for several 2001 and 2002 grants to determine whether the department followed its own policies.
In 2003 and 2004, Education took steps to improve its procedures for awarding discretionary grants through competitions but certain procedures were not always followed. During this time, after Education introduced some new management controls to its competitive grants procedures, we found it generally adhered to these new policies. For example, GAO did not find evidence that Education reduced any applicant's request without first conducting a budget analysis, as required, or that Education rescored applications after they had been peer reviewed. However, certain procedures were not always followed; for example, Education frequently did not finalize its plans for conducting competitions before starting the competitions--a step that would help ensure transparency in making awards. In addition, many files lacked documentation that the department screened the applicants, as required, to identify incompetent applicants, ineligible grantees, or unallowable expenditures. Since 2003, Education has also taken steps to reform its process for awarding grants based on unsolicited proposals, but it based its screening decisions on proposals that vary greatly and frequently provided extensive technical assistance. Following a departmental reorganization, Education established a centralized process for reviewing unsolicited proposals. However, these proposals, which Education used as a basis to certify that there is a substantial likelihood that the application will meet regulatory requirements, varied greatly in content and detail. GAO also found that Education provided extensive technical assistance to applicants, in some instances, providing applicants with the notes of peer reviewers and allowing applicants to revise and resubmit applications. Specifically, in 2004, 10 of the 27 applicants did not get reviewers' support and were provided a chance to re-apply. Of those 10 applicants, 8 revised their proposals, received favorable recommendations, and were subsequently funded. Prior to 2003, Education made exceptions to some of its policies in awarding three grants, totaling about $12.3 million, where particular allegations were raised. Two of the grants were awarded through a competitive process, but GAO found that Education reduced funding to all of the grantees to expand the number of grantees funded and to accommodate awards to lower rated grantees. In doing so, Education altered its selection methodology after it developed and recommended a list of grantees. In one case, Education rescored and reversed the order of selected grantees after the peer reviewers had completed their assessments. Education awarded the third grant based on an unsolicited proposal and regulations require that the department seek recommendations from peer reviewers prior to funding. In this case, the peer reviewers could not agree on a recommendation. GAO found that Education lacked a process to reconcile disagreements among reviewers and awarded a grant that two of three reviewers did not recommend. Moreover, Education awarded four grants in 2001 for unsolicited proposals that had not been recommended for funding by any one of the three reviewers.
Recommendations
Our recommendations from this work are listed below with a Contact for more information. Status will change
from "In process" to "Implemented" or "Not implemented" based on our follow up work.
Director:
Team:
Phone:
Marlene S. Shaul
Government Accountability Office: Education, Workforce, and Income Security
(202) 512-6778
Recommendations for Executive Action
Recommendation: To address certain shortcomings in the department's grant-making policies through a variety of executive actions designed to promote fairness, enhance transparency, and provide greater access to funding opportunities and to improve the process for selecting and awarding grants based on unsolicited proposals, the Secretary of Education should develop a more systematic format to select unsolicited proposals for further consideration by peer reviewers.
Agency Affected: Department of Education
Status: In process
Comments: Education disagreed with our recommendation and said that implementing it would not help the agency select high-quality applications from the pool of unsolicited proposals it receives each year. Education said that it had recently developed more specific guidance for determining whether an unsolicited proposal should be considered for funding. The agency maintains that this guidance, which is based on the regulations for funding such proposals, has resulted in a strengthened process.
Recommendation: To ensure fairness and improve transparency in the competitive grants process, the Secretary of Education should ensure that all competition plans are finalized before competitions begin and if a plan needs to be amended during a competition, the Secretary should provide assurances that any such amendment is justified in writing and has been approved by a senior department official.
Agency Affected: Department of Education
Status: Implemented
Comments: Education agreed with this recommendation and revised its "Handbook for the Discretionary Grant Process" to include more specific guidance about when competition plans should be developed and the requirements for amending such plans. The Handbook now specifies that if there is a need to amend the plan the program officer must provide a written justification for doing so and that the officer cannot proceed until the relevant Assistant Secretary approves the amendment.
Recommendation: To ensure fairness and improve transparency in the competitive grants process, the Secretary of Education should implement departmental policy to screen all applicants for compliance with audit requirements before the award, and ensure that outstanding audit issues--if there are any--are addressed before making an award.
Agency Affected: Department of Education
Status: In process
Comments: Education agreed with this recommendation and is strengthening its procedures to determine prospective discretionary grantees' ability to administer grants, including enhanced scrutiny of applicants' fiscal management histories and, as applicable, audit histories. Education will also supplement basic training for grants monitors to focus on federal audit issues and risk management.
Recommendation: To ensure fairness and improve transparency in the competitive grants process, the Secretary of Education should take appropriate steps to ensure that program officers better document required checks such as budget analyses and eligibility screening.
Agency Affected: Department of Education
Status: In process
Comments: Education agreed with this recommendation. The agency is reinforcing the requirements regarding budget analyses and appropriate documentation through required training on monitoring for all program officers. Education will develop an improved course on reviewing grant budgets. Importantly, at least once a year, Education staff will conduct and document random checks of official grant files to ensure that program officers are including the appropriate documentation in the files.
