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Chapter 1: Electronic Government
Establish an Electronic Grants System
Summary
At least 35 state agencies distribute state or federal grants to various programs and organizations, largely through paper processes. A statewide electronic grants management system could streamline this process, saving time and paper, increasing data accuracy, and improving the allocation of state and federal funding.
Background
In Texas, at least 35 state agencies distribute state-funded or federal pass-through grants, or both, largely through paper-driven processes.[1] These grants support programs in state and local government, university research, nonprofits, and other organizations.
Paper-driven processes consume large amounts of paper and are subject to more problems with inconsistency and data entry errors, than electronic processes. The US Environmental Protection Agency (EPA) addressed problems with its paper-driven processes with a streamlined, automated system, the Integrated Grants Management System/Partnership 2000 (IGMS/P2000).[2] Fully funded by the EPA—including development, design, and testing—and federally owned, IGMS/P2000 lets grant customers such as the Texas Natural Resource Conservation Commission (TNRCC) complete all the steps electronically, from grant application to the receipt of funds. A pilot participant for three years, TNRCC applies annually for about 90 (or 60 percent) of its EPA grants electronically.[3]
Toward a Grants Management System in Texas
Texas took an initial step toward an electronic grants management system when the Governor’s office created the Electronic Grants Technical Assistance Workgroup (EGTAW). EGTAW intends to create a single site on the Internet to accept applications from Texas’ grant customers. This initiative could involve reengineering and automating the grants processes of several state agencies and developing a single grants management system for applications, approval, payment, and management processes.
EGTAW members include information technology (IT) staff from state agencies as well as agency grants staff who are knowledgeable about IT issues. The group met for the first time in July 2000 to discuss barriers to the creation of an electronic grants system, outline an implementation plan for such a system, and share information. The group will present a concept paper to agency heads to get their approval for development of an electronic grants system and will report on its work to the 2001 Legislature.
For example, the US Department of Justice’s Local Law Enforcement Block Grant requires that applications be submitted online. Electronic access for states applying for this grant is not a problem. However, if a small, non-profit organization were applying for a particular grant where electronic submittal was required and the non-profit entity didn’t have electronic access, they would need to go to a library or some other community center to obtain access.[4]
Electronic Grants Management: Federal Efforts
Several state and federal electronic grants management projects are already underway. For instance, the federal Chief Financial Officers Council Grants Management Committee (GMC) is leading government-wide implementation of Public Law 106-107, the Federal Financial Assistance Management Improvement Act of 1999.
The GMC is made up of federal chief financial officers and other financial personnel, with oversight by the Office of Management and Budget. The GMC includes several subcommittees:
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The Pre-Award Workgroup, which examines the grant application process.
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The Post-Award Workgroup, which examines agencies’ grant monitoring and reporting policies.
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The Audit Oversight Workgroup, which works to improve and streamline various audit-related requirements and services.
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Interagency Electronic Grants Committee (IAEGC), an electronic work group intended to coordinate, promote, and facilitate the effective use of electronic commerce throughout the federal grants community.[5] The IAEGC is working to bring federal grant processes together in a one-stop Internet portal. Major goals are to eliminate multiple application forms and to establish a single Web site that grant-seekers can use to check on the status of multiple grant proposals.
Federal grants amount to a hefty sum. In fiscal 1998, the federal government awarded more than $250 billion to 100,000 or more recipients. But traditional paper processes make grants administration lengthy and cumbersome. Moreover, agencies use different forms for the grants process, making paperwork confusing and unnecessarily costly for grant-seekers pursuing multiple grants.
To address these problems, the federal government is developing the US Electronic Grants System (USEGS), a cooperative effort between the IAEGC and other federal projects. The system will replace the paper-based grant process with paperless transactions. Software applications will eventually allow any customer to conduct grant business with any federal agency using a common user interface, consistent data requests, and tight electronic security including the use of digital signatures, encryption, and key recovery technologies. Grant-seekers will be able to exchange data and files with federal agencies over the Internet, entering data just once for use in grant transactions with all participating agencies.
The phases completed so far, and their costs, are:
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Phase I: designed, developed and tested USEGS pilot, September 1996–April 1998 (complete). Cost, $155,000.
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Phase II: developed and tested security features including digital signatures, March 1997–May 1998 (complete). Cost, $350,000.
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Phase III: developed and tested production of registration and application modules (partially complete). Allocated funding, $350,000.[6]
National Oceanic and Atmospheric Administration
The National Oceanic and Atmospheric Administration (NOAA), which awards grants to Texas’ General Land Office (GLO), allows its customers to apply for grants electronically (although they must use paper for documents needing signatures). Once NOAA approves a grant, customers may request the deposit of funds through an automated telephone system. The funds then are transferred to the recipient within two working days. Customers can check grant balances and most recent transactions by telephone.[7]
Pennsylvania Department of Education
The Pennsylvania Department of Education put its grant application process online in late 1998. The project took two years to complete. All of the state’s 567 school districts now use the electronic system to apply for state grants. The $2.5 million total cost covered contractor and consultant fees, systems development, and computer coding. Salary and benefits for in-house personnel were accounted for separately. The system had three phases: design ($500,000); implementation, involving the transfer of the 26 largest grants online ($1.6 million); and refinements ($400,000). An additional $500,000 will pay for enhancements and upgrades in fiscal 2001. The Department of Education’s goal is to eventually handle the system entirely in house.[8]
Grant-tracking Software
The Texas Governor’s office maintains a database of state-owned software that can be accessed through the Internet. This software includes a grant-tracking system that allows grant applications to be submitted and tracked through the approval process on the Internet. Previously purchased with state tax dollars, the code for this software is available at no cost to state agencies if it is used without modification, or at a minimal cost if it is modified.[9]
In addition, the state currently owns a license giving all state agencies unlimited use of grant-tracking software created by PeopleSoft.[10] PeopleSoft’s support services include software maintenance, such as error fixes, updates, and enhancements to the modules included in the license, and telephone support. Maintenance costs, however, can be high for financial modules such as grants management and must be borne by user agencies.[11]
TexasOnline Portal
One way to make an electronic grants management system available to the public is through a “portal”—a Web site offering access to a variety of different government services, such as TexasOnline. Placing the grants management system on the TexasOnline portal could increase the speed and accuracy of transactions, reduce processing time, and reduce or eliminate paper usage.
Leveraging Agency Resources
The intent of the following recommendation is for agencies to improve their grants management by leveraging their resources through the state’s Department of Information Resources (DIR). Agencies may find they can enhance their grant processes by contributing resources to a statewide grants system managed by the proposed Program Management Office in DIR rather than creating separate systems on their own. Agencies that decide to take advantage of a statewide grants management system could do so through an interagency contract with DIR.
Recommendation
The Program Management Office (PMO) in the Department of Information Resources (DIR), as recommended elsewhere in this report, should determine the costs and benefits of establishing a statewide electronic grants management system.
Such a system should, to the fullest extent possible within appropriated resources:
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Increase the awareness of grant availability.
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Provide a single point of entry for accessing all grant information.
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Allow searching for grant opportunities by factors such as topic, customer group, funding amount or other criteria.
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Allow electronic submission of grant applications.
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Shorten and simplify grant applications and management processes.
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Improve tracking and monitoring of pending and awarded grants.
In determining costs and benefits, the PMO should assume the system will have the capabilities listed above. The PMO should identify state agencies that offer grants and customer groups that are affected by the grants, including those who apply for them and those who may ultimately be served by the grant funds.
The PMO should also consider the extent to which the grant-tracking software can be adapted for electronic grants management system in Texas. Where possible, electronic grants processing should take place through the TexasOnline portal.
In determining costs and benefits, the PMO should consider that Texas’ electronic grants system should make the fullest possible use of public-private partnerships or other innovative options to help pay vendors. The PMO should also consider options for cost-reimbursement.
The Electronic Grants Technical Assistance Workgroup (EGTAW) should provide input to the PMO about opportunities for improving grants management through new technology and by sharing state-owned information resources.
In the event that the Legislature chooses not to create the PMO, DIR should determine the costs and benefits of establishing an electronic grants management system and move forward with its design to the extent that its funding for the biennium allows.
Fiscal Impact
The benefits of an electronic grants system could outweigh its costs. Therefore, after completing its cost-benefit analysis, the PMO should move forward with designing and implementing an electronic grants system to the extent that funds appropriated for the 2002-03 biennium allow.
The estimate for the PMO’s development of an electronic grants management system assumes that a $2 million appropriation for fiscal 2002-03 would be sufficient “seed money.” This includes the salary and benefits for one full-time PMO employee at an approximate annual cost of $100,000 for a project manager. This salary is in line with comparable existing positions.
Initially, the project manager would work to determine the costs and benefits of an electronic grants management system. The remainder of the funding for fiscal 2002-03 then could be used for designing and implementing the system to the extent that this funding allows.
Estimated costs for fiscal 2004 through 2006 include the salary and benefits for the new FTE only. If the 2001 Legislature establishes the PMO, the 2003 Legislature could fund the cost of additional FTEs for the electronic grants management system with amounts the PMO charges agencies for managing their information technology projects.
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Fiscal
Year
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Savings/(Cost) to the
General Revenue Fund
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Change in FTEs
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2002
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($1,000,000)
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+1
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2003
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($1,000,000)
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+1
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2004
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($100,000)
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+1
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2005
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($100,000)
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+1
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2006
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($100,000)
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+1
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In the event the Legislature does not create the PMO, DIR could perform the work needed to establish an electronic grants management system. To do this, DIR would require an additional FTE in fiscal 2002 through 2006 at the same annual cost for salary and benefits mentioned above.
Endnotes
[1 ]Memorandum from Denise Francis, group director of the State Grants Team, Governor’s office, Austin, Texas, October 11, 2000. The 35 agencies are the Children’s Trust Fund of Texas Council, Department of Agriculture, Department of Human Services, General Land Office, General Services Commission, Health and Human Services Commission, Interagency Council on Early Childhood Intervention, Texas Department of Mental Health and Mental Retardation, Office of the Attorney General, Office of the Governor (Trusteed Programs), Texas Parks and Wildlife Department, Railroad Commission of Texas, Texas Commission for the Blind, Texas Commission of the Deaf and Hard of Hearing, Texas Commission on Alcohol and Drug Abuse, Texas Commission on Fire Protection, Texas Commission on the Arts, Texas Department of Economic Development, Texas Education Agency, Texas Department of Health, Texas Higher Education Coordinating Board, Texas Historical Commission, Texas Department of Housing and Community Affairs, Texas Juvenile Probation Commission (Title IV-E), Texas State Library and Archives Commission, Texas Natural Resource Conservation Commission, Texas Department of Protective and Regulatory Services, Texas Department of Public Safety, Texas Rehabilitation Commission, Soil and Water Conservation Board, Telecommunications Infrastructure Fund Board, Texas Department of Transportation, Texas Water Development Board, Texas Workforce Commission, and Texas Youth Commission.
[2] US Environmental Protection Agency, The Integrated Grants Management System/Partnership 2000, by TROY Systems, Inc. (Washington, DC, September 17, 1999), executive summary.
[3] Interview with Court Thielman, Texas Natural Resource Conservation Commission, Austin, Texas, August 17, 2000; US Environmental Protection Agency, “IGMS/P2000,” Washington, DC (Pamphlet); and US Environmental Protection Agency, Executive Summary, The Integrated Grants Management System/Partnership 2000 (Washington, DC, September 17, 1999).
[4] Telephone interview with Luther Isaac, Response Center, Community-Oriented Policing, US Department of Justice, Washington, DC, October 6, 2000; and interview with Chris Johnson, administrative director, Texas Court Appointed Special Advocate, Austin, Texas, October 6, 2000.
[5] Chief Financial Officers Council, “Grants Management Committee (GMC)” (http://www.financenet.gov/financenet/fed/cfo/grants/grants.htm), and The White House, “Office of Management and Budget” (http://www.whitehouse.gov/OMB/grants/reform.html). (Internet documents.)
[6] US Department of Transportation, Federal Railroad Administration, US Electronic Grants Project: Final Report to the National Partnership for Reinventing Government, by Brad Smith (Washington, DC, March 12, 1999), pp. 1-17.
[7] Interview with Melissa Porter, Texas General Land office, Austin, Texas, August 30, 2000.
[8] Telephone interviews with Cindy Rhoads, Department of Education, Harrisburg, Pennsylvania, August 17, 2000 and October 11, 2000.
[9] Interview with Paul Gulick, Office of the Governor, Austin, Texas, August 17, 2000.
[10] Texas Department of Information Resources, “Annual Cost of PeopleSoft Software Support Services (Software Maintenance)” (http://www.dir.state.tx.us/busops/service_contracts/peoplesoft/ps_maint.htm). (Internet document.); and interview with Bill Monroe, Texas Education Agency, Austin, Texas, August 31, 2000.
[11] Texas Department of Information Resources, “Annual Cost of PeopleSoft Software Support Services (Software Maintenance)” and interview with Regina Rousseau, Texas Department of Information Resources, Austin, Texas, September 5,
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