OMB unveils changes to funding

The Office of Management and Budget late last week presented federal chief financial and chief information officers with guidelines on upcoming changes to the funding structure of, a popular e-government initiative.

The initiative, launched in December 2003, is moving from a development to a utilization phase, OMB officials wrote in a June 18 memorandum. As part of this transition, agencies will have to make funding adjustments for the remainder of fiscal 2004 through fiscal 2006. managers worked on the site's "find and apply" search feature in the first half of fiscal 2004 and are now preparing for a transition to a fee-for-service funding model. Under the new model, 26 agencies will help fund the site based on the value of grants they award. Until now, 11 agencies have sponsored the initiative.

Because development is nearly complete, funding will shift to cover operational and maintenance costs, the OMB memo stated. In preparation for the change, the memo presented a new funding formula for fiscal 2005 and fiscal 2006. For the remainder of fiscal 2004 agencies will return to the funding fomula used February 2002 and February 2004.

OMB urged agencies to get ready for these changes now and "plan to transfer their fiscal 2005 funding within a month after the enactment of their fiscal 2005 appropriation."

The formula divides the agencies into three groups based on the value of grants they disburse. In each of fiscal 2005 and fiscal 2006, agencies issuing the least in grants are asked to pay $226,340. Agencies in the middle group must pay $452,680 and the highest group will pay $754,467.

While these changes are unlikely to affect users, they do send an important message, said Rebecca Spitzgo, a program manager at the Health and Human Services Department. "The biggest impact is that it does lay the groundwork for continuing," she said. "It will have a source for funding in the foreseeable future. It sends the message, 'here to stay.'"

The agencies do not expect any significant barriers during the transition, an OMB official said. "In fact, has a strong record for anticipating future obstacles and having responsive contingency plans. This success is a testament to the strong support of the 26 agencies that are supporting partners of" is one of two e-government initiatives that have reached their original goals, according to the General Accounting Office. During a House Government Reform subcommittee on technology hearing on March 24, Linda Koontz, director of information management issues at GAO, called the grants site a "simple, unified way to find grant opportunities via the Web."

Three thousand grant announcements have been posted on the site and more than 115 grant programs were available for electronic application as of May 21. has had almost 8 million visitors, and more than 340 grant applications have been submitted through it.

The only other e-government initiative praised by GAO and OMB for meeting its goals was the Internal Revenue Services' e-file project, which allowed 8.8 million people to file their 2003 taxes online.

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