What every state and local CIO should know about grant management

It’s clear that elected officials and senior leadership across the board are recognizing that the CIO is not just a technology guru, but also an individual essential to enabling the very business of government itself.

Because grant funding has become imperative as a source of revenue for government services, the research, application and management process for grants has become a much higher priority for many CIOs.

Grant management, however, is highly complex, tedious and carries high administrative burden, which is exacerbated by the incoming waves of federal funding in addition to CARES Act grants that governments already have to manage. Thus, more CIOs are becoming laser-focused on finding the right grant management solutions to help automate these processes and alleviate administrative burden.

At the same time, CIOs must find the right GMS to fit within their existing IT infrastructure and enterprise resource planning (ERP) systems -- without getting locked-in to a model that will prevent future digital transformation. To achieve this important balance, CIOs must be aware of the implementation approaches for a GMS.

According to Gartner’s “Market Guide for State and Local Grant Management Solutions,” grant management solutions are primarily being implemented by three ways: stand-alone, built-to-purpose commercial off-the-shelf (COTS) applications, ERP modules or application platforms.

Each approach offers a way to automate the grant management process and produce efficiencies for workforces as well as cost savings in terms of ROI.

Stand-alone, built-to-purpose COTS applications: A purpose-built COTS GMS has one purpose only: grant management. These are typically marketed as software-as-a-service or hosted solutions with the possibility of on-premise implementation if necessary. Gartner notes that these applications are the dominant delivery method for modern grant management solutions as they are highly scalable for both small organizations (two to five users in a local department) to large-scale enterprise implementations, such as a state government with hundreds of users.

ERP modules: In this case, these grant management modules are deployed as part of ERP solutions and contain strong financial costing and budgeting data for compliance reporting and financial management. However, these modules don’t always support the full breadth of programmatic-oriented grant activities without supplemental modules.

Application platforms: Application platforms are highly configurable alternatives to COTS solutions and can be customized to grant management process workflows. While these are more popular in non-profit and higher education circles, they can require significant upfront investments to meet unique workflows.

Modernizing the full grant management lifecycle

The grants process has grown more complex over time, primarily because of the increasing number of data integration points required to properly meet the tracking and reporting requirements of each grant. Grants management used to be putting all of an agency’s grant funds into one account in the financial system, tracking the transactional data against that one fund and using spreadsheets to associate those transactions with the appropriate grant. Systems have evolved, but rarely do they capture the full picture or manage all the program and financial requirements for all grants in one place.

This is especially true when considering pass-through grants (when an entity receives federal funds which it “passes on” to recipients). Recipients that receive funds from a pass-through entity then become subrecipients. Consequently, grantors have to worry not only about their own management of grants but also the grant performance of the subrecipients.

That’s why for state and local governments in particular, the availability of full lifecycle GMS is critical for incorporating appropriate data and workflows for both grantors who need subrecipient management capabilities and grantees (receiving entities) that need to find and acquire grant funding and/or manage grant awards.

A full lifecycle GMS has the ability to address separately or altogether each phase of the grant lifecycle including:

• Pre-award: The steps from project conception to submission of a grant application.
• Post-award: The steps from being awarded a grant to closeout.
• Subrecipient management: The workflows needed for grantors to ensure subrecipients are meeting targets and objectives of grant projects.

Key considerations when selecting a GMS

As the GMS market continues to expand and evolve, state and local CIOs will have more options when it comes to choosing which best serves their department or agency’s needs. Knowing that a purpose-built COTS application will be the dominant implementation approach for grant management solutions, CIOs should look for the following capabilities when making a selection:

• Efficient tracking and reporting of budget, expenditure and performance data by grant.
• Ability to integrate with any ERP module.
• Ability to streamline and automate the needs and processes of both grantors and grantees (recipients of grant awards) into enterprise workflows.
• User-centered design driven by public-sector practitioners and certified grant management specialists.
• Experience implementing all of the capabilities above.

For CIOs who are now more essential to the business of government than ever, choosing the right GMS can make every bit of difference in alleviating short-term administrative burden for workforces, promoting long-term economic recovery for governments hurting on revenue and future-proofing digital transformation efforts.