How local governments can overcome federal grant roadblocks

As the nation begins to recover from the pandemic and prepares for the possibility of another harmful variant, it’s critical that local governments access all available federal grant funds they’re eligible for to meet community needs.

For the past two years, many local governments shifted budgets to combat COVID-19. Federal grants like those outlined in the American Rescue Plan Act (ARPA) can provide important financial assistance to support and supplement necessary government services that suffered as governments shifted their attention. These grants can go a long way to help governments dealing with scarce resources for items such as education and health programs, infrastructure and jobs programs.

So, why aren’t more local governments securing ARPA and other grant funding?

Common challenges: Staffing, reporting, regulatory uncertainty

As ARPA and infrastructure grants ramp up, some state and local governments struggle with how to secure these funds. Some don’t have the grants management experience on staff while others have questions about stimulus eligibility requirements and how they can be used. Many worry about fulfilling seemingly strenuous compliance requirements and the time it takes to provide accurate information.

One of the larger challenges is a lack of staff and grants knowledge. There’s been a significant increase in early retirements in the public sector, with states like California reporting that state employee retirements increased by 15 percent last year. With the loss of institutional knowledge, some governments now simply don’t have the needed grants experience on staff and don’t always know the best way to go about managing and applying for grants let alone running the compliance required.

Even among experienced managers, there can be uncertainty around whether their existing programs are eligible for federal funding, while others don’t want to navigate the process of establishing a new program that meets the criteria. Shifting ARPA guidance has also created confusion around appropriating and spending the funding in accordance with regulations. To avoid the cost disallowance some governments experienced after implementing CARES Act funded programs, some state and local governments are delaying spending funds to ensure compliance.

Others have delayed applications fearing they don’t have the staff to manage what appears to be a significant undertaking: making sure each report is completed with sufficient evidence that it adheres to all the evaluation criteria.

Overcoming the most common grant challenges

The good news is that by investing in training and using technology designed to help manage grants, states and local governments can overcome these challenges while ensuring they’re maximizing accountability and transparency.

Those with new or junior staff should prioritize grants management training to their staff. This may include online or in-person learning about grants management or grants management software. Many federal agencies offer online courses specific to the grants they offer including the CDC, OPM, FEMA and others. Another place to start is the National Grants Management Association.

Those worried about the compliance issues, shifting regulations and a possible audit should make sure the grants staff understands and keeps up to date with all grant compliance requirements. Those could include:

• Authorizing legislation for the grant
• Uniform Guidance 2 CFR Part 200
• OMB issued memos, guidance and FAQs
• Treasury issued memos, guidance and FAQs
• Specific compliance requirements within the grant award agreement

To help manage grants, state and local governments may also want to invest in purpose-built grants management systems that include specific tool to track and manage programs, expenditures, performance and administrative requirements. These platforms can help governments identify eligibility status and address their most pressing needs. Some curate grant research and deliver grant opportunities automatically via email. These systems also support real-time collaboration and offer mobile-enabled platforms so everyone can access grants information and tools easily.

Federal grants can close community funding gaps

Now more than ever, states and localities who understand and apply for ARPA and other federal funds can help close gaps in their budgets from the past two years of upheaval. Enterprise grants management systems can help those dealing with staff retirements and tight budgets. Agencies can even use grant funds to purchase grant management platforms without dipping into existing overstretched budgets. While local government still faces challenges in applying for and managing federal grants, the path forward is clear. By committing to increased training and technology, governments can help their citizens and their budgets, get back on track.

Merril Oliver, CGMS, is the chief customer officer at grants management company eCivis.