Rethinking Federal Grants Management: From Oversight to Insight

Taxpayers should get a better return on their $600 billion annual investment.

Grants are among the most important tools the federal government uses to accomplish its objectives. At $600 billion, they comprise over 15 percent of annual outlays, forty percent higher than federal contract spending.

Sadly, the way federal grants are managed gets woefully little attention. To achieve higher returns on the taxpayer’s dollar, that needs to change. Both the mindset and the skill sets of federal grant managers need to evolve from primarily thinking about “conducting oversight” to figuring out instead how to generate insights that help grantees and others learn from experience and find new ways to improve performance along multiple dimensions, including outcomes, cost-effectiveness, customer experience (or, for regulated parties, interaction and transaction quality), fairness and unwanted side effects. That is not to suggest that persistently weak grantee performance is acceptable, but rather that attention to improvement should be the priority.

Last month, the Volcker Alliance joined with three other organizations – an evidence-based policy advocate, a policy area expert, and a grantees’ network – to urge changes in the way one federal grant program, Head Start, collects, analyzes, reports, shares, and uses performance and other data grantees submit. These recommendations, grounded in lessons from both the public and private sectors, should be embraced not just by Head Start but by federal grant programs generally. 

Both the private and public sectors offer valuable lessons about data collection, analysis, dissemination, and, as I described in a previous blog, measured trials. For example, the United Parcel Service (UPS), as reported on public radio, regularly uses data and tests new practices to increase, continually, its productivity, profits, driver pay, and safety levels. Analyzing data from drivers, their handheld devices, and their trucks helps drivers find faster routes, anticipate dangerous dogs and avoid lost packages. In addition, UPS constantly observes, brainstorms and then tests to find better equipment and practices such as smart key fobs, redesigned doors and adjustments to driving practice.

The Annie E. Casey Foundation has similarly worked to improve data systems and data used to help children in foster care. Reaching out to frontline social workers and state program managers to understand their information needs and work problems, it saw a problem ripe for fixing. Caseworkers often write out their case notes in notebooks; if they move on, the notebooks go with them and their successors are left without the child’s case history. Even when caseworkers stay, though, the state cannot look across caseworkers’ notes to detect serious or common problems or find promising practices worth testing and promoting for broader adoption. Working closely with frontline workers as well as state program managers in Indiana, the Foundation launched Case Commons to design, test and refine an electronic notebook and data system that caseworkers like and that also generates information useful to supervisors, program managers and, eventually, researchers and policy makers.

The harsh reality is that federal grants programs tend to give insufficient attention to data system design, data use, and data users. Programs tend to focus on compliance rather than helping people across the delivery system get good information they can use to make better decisions and take smarter actions that improve performance. The lack of attention to making data useful has long been the real impediment to progress, not data cost.

The National Highway Traffic Safety Administration demonstrated decades ago the value of emphasizing improvement over compliance, long before Moore’s Law kicked into logarithmic overdrive, slashing the costs of generating, analyzing and sharing information. NHTSA built an outcomes-focused data system and routinely analyzes and broadly shares traffic fatality information, with root cause analysis, in various formats that anyone interested can easily find and use. It also helps frontline workers and others learn from their own and others’ experience (regarding safety belt use, for example); test new practices to achieve unprecedented performance gains (such as to reduce distracted driving); and sometimes even supplies “campaign” materials that help grantees adopt and adapt effectively replicated high-return practices.  

Former Justice Louis D. Brandeis’s opinion referring to states as the “laboratories of democracy” is often quoted. Yet state, local, and non-profit grantee laboratories can generate little value if no one studies the lessons from them. It is time for federal grant managers to assume a much stronger leadership role encouraging better data collection, analysis and dissemination as well as the creation of networks that regularly bring frontline workers and others in the delivery system together with strong researchers and policy makers to learn from experience and discover new paths for improvement.

Shelley H. Metzenbaum is senior advisor at the Volcker Alliance. She served as associate director for performance and personnel management at the Office of Management and Budget during the first term of the Obama administration.

(Image via bleakstar/